Document:

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                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                                  APTIMUS, INC.

                                       AND

                               XMARKSTHESPOT, INC.

                                   DATED AS OF
                                NOVEMBER 22, 2000

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                            ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of November
22, 2000 by and among APTIMUS, INC., a Washington corporation ("Purchaser"), and
XMARKSTHESPOT, INC., a California corporation ("Seller").

                                    RECITALS

        A. Purchase and Seller are each engaged in the business of providing
on-line direct marketing services to marketers of consumer goods and services.

        B. Seller desires to sell certain assets and assign certain liabilities
to Purchaser, and Purchaser desires to purchase such assets and assume such
liabilities from Seller, all upon the terms and conditions set forth in this
Agreement.

        C. As a condition to the willingness of, and an inducement to, Purchaser
to enter into this Agreement, contemporaneously with the execution and delivery
of this Agreement, certain holders of Shares (as defined herein), are entering
into an agreement dated as of the date hereof (the "Stockholders Voting
Agreement"), in the form of Exhibit C attached hereto, providing for certain
actions relating to the transactions contemplated by this Agreement;

                                   AGREEMENTS

        For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser and Seller hereby agree as follows:

        1. Definitions. For the purposes of this Agreement:

                "Accounts Payable Schedule" shall have the meaning given it in
Section 2.5.1 hereof.

                "Assets" shall have the meaning given it in Section 2.1 hereof.

                "Assumed Liabilities" shall have the meaning given it in Section
2.2 hereof.

                "Assumed Promissory Note Debt" shall have the meaning given it
in Section 2.2 hereof.

                "Balance Sheets" shall mean the unaudited balance sheets of
Seller, which shall include unaudited income statements of Seller, as of
December 31, 1998 and 1999 and September 30, 2000.

                "Business" shall mean the business as a going concern of Seller
as conducted through the Closing Date and that portion of Purchaser's business
attributable to the Assets subsequent to the Closing Date.

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                "Closing" shall mean consummation of the transactions
contemplated in Section 3 hereof with respect to the purchase of the Purchased
Assets.

                "Closing Date" shall mean the date on which Closing is to occur,
determined as provided in Section 3.1 hereof.

                "Code" shall mean the Internal Revenue Code of 1986, as amended.

                "Contracts" shall have the meaning given it in Section 2.2
hereof.

                "Environmental Laws" shall have the meaning given it in Section
4.19 hereof.

                "Escrow" shall have the meaning given it in Section 2.5.2
hereof.

                "Escrow Agreement" shall have the meaning given it in Section
2.5.2 hereof.

                "Excluded Liabilities" shall have the meaning given it in
Section 2.3 hereof.

                "GAAP" shall mean generally accepted accounting principals,
consistently applied.

                "Indemnitee" shall have the meaning given it in Section 9.1.3
hereof.

                "Indemnitor" shall have the meaning given it in Section 9.1.3
hereof.

                "Indemnity Amount" shall have the meaning given it in Section
9.2 hereof.

                "Intellectual Properties" shall have the meaning given it in
Section 4.13 hereof.

                "Lease" shall have the meaning given it in Section 4.12 hereof.

                "Person" shall mean any natural person, corporation,
partnership, joint venture, association, organization, other entity or
governmental or regulatory authority.

                "Promissory Note" shall mean that certain Promissory Note, dated
October 31, 2000, in the principal sum of up to $210,000, with Seller as Maker
and Purchaser as Holder.

                "Property" shall mean all property, of whatever kind or
description, owned by, used or to which Seller has rights in connection with its
business, including, without limitation, all patents, trademarks, service marks,
copyrights and applications for any of the foregoing; all trade secrets,
software programs, code and licenses, and other proprietary rights and
information; computer hardware, structures; trade fixtures; equipment;
machinery; contract rights and general intangibles; cash, bank deposits and
similar cash or cash equivalent items existing as of the Closing Date (whether
or not arising from the operation of Seller's business), trade and other
accounts receivable, net of any credit balances, accrued in accordance with GAAP
arising from the operation of Seller's business, records, documents, inventory,
finished goods, raw materials and good will.

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                "Purchase Price" shall have the meaning given it in Section 2.4
hereof.

                "Purchased Assets" shall have the meaning given it in Section
2.2 hereof.

                "Purchaser" shall mean Aptimus, Inc., a Washington corporation.

                "Real Estate" shall mean that certain parcel of improved real
property, situate in San Francisco, San Francisco County, California, subject to
the Lease.

                "Reports" shall have the meaning given it in Section 4.25.3
hereof.

                "Restricted Period" shall have the meaning given it in Section
6.3 hereof.

                "Retained Shares" shall have the meaning given it in Section 2.5
hereof.

                "Securities Act" shall have the meaning given it in Section
4.25.1 hereof.

                "Seller" shall mean XMarkstheSpot, Inc., a California
corporation.

                "Seller Disclosure Schedule" shall mean the Disclosure Schedule
delivered by Seller to Purchaser identifying the matters described herein.

                "Seller Receivables" shall have the meaning given it in Section
6.4 hereof.

                "Settlement Date" shall mean the date 120 days after the Closing
Date.

                "Shares" shall have the meaning given it in Section 2.4 hereof.

                "Taxes" shall mean all taxes, charges, fees, levies, or other
assessments, including without limitation, income, excise, gross receipts,
personal property, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, severance, stamp, occupation,
windfall profits, social security and unemployment or other taxes imposed by the
United States, or any agency or instrumentality thereof, any state, county,
local or foreign government, or any agency or instrumentality thereof, and any
interest or fines, and any and all penalties or additions relating to such
taxes, charges, fees, levies or other assessments.

        2. The Acquisition.

                2.1 Purchase of the Assets. Subject to the terms and conditions
of this Agreement, Purchaser hereby agrees to purchase from Seller, and Seller
hereby agrees to sell to Purchaser, on the Closing Date, all Property, including
without limitation, the assets set forth on Schedule 2.1 of the Seller
Disclosure Schedule (together, the "Assets").

                2.2 Assumed Liabilities. Subject to the terms and conditions of
this Agreement, Seller hereby assigns, transfers and sets over to Purchaser all
of its right, benefits, duties and obligations, and Purchaser hereby agrees to
assume, pay, perform and fully discharge all of the liabilities of Seller
(together, the "Assumed Liabilities"), arising from and after the Closing Date
under the leases, contracts and other agreements and undertakings listed on

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Schedule 2.2 of the Seller Disclosure Schedule (together, the "Contracts") and
no others. In addition, the Assumed Liabilities shall include one-half (1/2) of
the total liability of Seller ("Assumed Promissory Note Debt") arising under the
Promissory Note for payments of ordinary course liabilities of the Business
arising from and after October 31, 2000 through the Closing Date, that payment
for which has received the prior written approval of Purchaser's Chief Financial
Officer; provided, that such ordinary course liabilities not exceeding $300 in
each instance shall require only the prior written notice to, but not the prior
written approval of, Purchaser's Chief Financial Officer; and provided, further,
that the Assumed Promissory Note Debt shall not exceed $105,000. The Assets and
the Contracts are collectively referred to herein as the "Purchased Assets."

                2.3 Excluded Liabilities. Purchaser shall not assume any
liabilities other than the Assumed Liabilities and the Assumed Promissory Note
Debt, and specifically shall not assume and expressly disclaims any and all
other obligations of Seller, accrued, absolute or contingent, known and unknown,
including without limitation, any of the following obligations and liabilities
(all obligations and liabilities not specifically assumed by Purchaser herein
are defined as the "Excluded Liabilities"):

                        2.3.1 Taxes. Any and all Taxes not specifically
identified as an Assumed Liability, either accruing on or relating to periods
prior to the Closing Date, or accruing to Seller as a result of the transactions
and undertakings contemplated by this Agreement, and any penalties or interest
thereon.

                        2.3.2 Litigation. Any claim, judgment, penalty,
settlement agreement or other obligation to pay damages, penalties or
assessments, including without limitation attorneys' fees and costs, in respect
of any action or proceeding that is pending or threatened prior to the Closing
Date, including without limitation, those listed on Schedule 4.17 of the Seller
Disclosure Schedule.

                        2.3.3 Claims. Any claims and liabilities that relate to
actions, omissions, injuries, practices or events that occurred on or before the
Closing Date whether based on any act, obligation or omission of Seller or
others, including without limitation, claims based on contract, statute,
accidents, workers' compensation, product liability, negligence, strict
liability or infringement.

                        2.3.4 Hazardous Materials. Any claims, suits,
liabilities, fines, judgments or assessments arising under applicable
Environmental Laws arising from or in any way connected with Seller's operation
of the Business.

                        2.3.5 Employment Obligations; Severance. All claims,
liabilities and obligations (whether based on tort, contract, statute or
otherwise) from whatever source such obligations and costs arise, including
without limitation, contractual obligations, notice to employees, employment
manuals, course of dealings, past practices, obligations relating to applicable
tax code provisions, or otherwise, relating to the employment of any Person by
Seller, including matters pertaining to existing and past employment practices
of Seller and all severance obligations and other costs of termination of
employees of Seller wherever located resulting from the termination or cessation
of employment, for any period occurring on or prior to the Closing Date.

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                        2.3.6 Indebtedness. Any loan, note, advance, credit,
payable, intracompany allocation or other form of indebtedness of any kind or
nature owing by Seller as of the Closing Date not otherwise specifically
identified as an Assumed Liability or the Assumed Promissory Note Debt.

                        2.3.7 Transaction Costs. Any cost, fee, charge, Tax, or
other obligation of Seller incurred or arising as a result of the transactions
and undertakings contemplated by this Agreement, including without limitation,
attorneys' fees, brokers' fees and all related costs and charges.

                        2.3.8 Shareholder Rights. Any obligations or liabilities
owing to holders of Seller's equity securities, or holders of rights, options or
warrants to purchase or convert to such securities, including without
limitation, any rights to payment, distribution, conversion, indemnification,
participation, allocation, registration or accounting.

                2.4 Purchase Price. Subject to the terms and conditions of this
Agreement, in full consideration for the Assets, and in addition to Purchaser's
assumption of the Assumed Liabilities, Purchaser shall pay to Seller the sum of
Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Purchase Price")
consisting of: (a) One Million Five Hundred Thousand Dollars ($1,500,000) cash;
(b) the Assumed Promissory Note Debt; and (c) that number of shares of
unregistered Aptimus, Inc. common stock ("Shares") obtained by dividing that
portion of the Purchase Price remaining after subtracting the cash and Assumed
Promissory Note Debt components thereof by Two Dollars ($2.00).

                2.5 Method of Payment. The Purchase Price shall be paid as
follows:

                        2.5.1 On the Closing Date. Not later than two business
days prior to the Closing, Seller shall deliver to Purchaser a complete and
final schedule ("Accounts Payable Schedule") of all debt and payment obligations
of Seller then outstanding, secured and unsecured, whether arising in the
ordinary course of business or otherwise, which debt and payment obligations
Seller acknowledges are Excluded Liabilities. The Accounts Payable Schedule
shall include the identity of the creditor, the full invoiced amount owing to
such creditor, the final, compromised amount owing, if different, and any
comments Seller may have in connection with such obligation. Purchaser shall
reserve from the cash portion of the Purchase Price an amount equal to the sum
of all debts and obligations identified on the Accounts Payable Schedule and,
with the reasonable assistance and oversight of Scott Rozic, shall promptly
following the Closing satisfy each of the identified debts and obligations for
and on behalf of Seller with such reserved cash proceeds; provided, that
Purchaser may, in its sole discretion and only with the written agreement of the
subject creditor, elect to assume sole liability with respect to certain of the
obligations of Seller identified on the Accounts Payable Schedule and, in lieu
of the immediate payment of cash therefor, retain from Seller's cash an amount
equal to the principal obligation so assumed and satisfy each such obligation in
a manner and pursuant to a schedule as each such creditor may agree, and
Purchaser shall defend, indemnify and hold Seller harmless from any such
obligations so assumed. The balance of the cash portion of the Purchase Price
remaining after deducting the sum of all debts and liabilities identified on the
Accounts Payable Schedule, if any, shall be paid to Seller at Closing pursuant
to wire instructions provided by Seller to Purchase at least two business days
prior to Closing. Two Hundred Sixty Thousand

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(260,000) Shares of the total number of Shares comprising the Share portion of
the Purchase Price shall be delivered by Purchaser to Seller at the Closing,
registered on the books of Purchaser in such names as Seller shall provide to
Purchaser no later than two business days prior to the Closing; provided that in
the event the cash portion of the Purchase Price is insufficient to satisfy all
of the debts and liabilities identified on the Accounts Payable Schedule,
Purchaser shall satisfy the excess liabilities and deduct from the Share portion
of the Purchase Price to be delivered at Closing that number of Shares equal to
the quotient of the difference between aggregate Accounts Payable Schedule
liability and $1,500,000 divided by $2.00. In addition to the foregoing, the
Assumed Promissory Note Debt shall be assumed by Purchaser as of the Closing
Date.

                        2.5.2. On the Settlement Date. The remaining One Hundred
Eighty-Seven Thousand Five Hundred (187,500) Shares ("Retained Shares") shall be
registered in the name of Seller and held in escrow through the Settlement Date
by ChaseMellon Shareholder Services (the "Escrow") pursuant to an escrow
agreement ("Escrow Agreement") in such form as Purchaser and Seller may agree
prior to Closing, and such additional instruments as Escrow may require. On the
Settlement Date, that number of Shares equal to the Indemnity Amount, if any,
shall be deducted from the Retained Shares, and the Retained Shares, as so
adjusted, shall be delivered to Seller at the address set forth in Section 11
hereof registered in such names as Seller shall provide to Purchaser no later
than two business days prior to the Settlement Date.

        3. Closing.

                3.1 Time and Place of Closing. The Closing shall occur at the
offices of Purchaser, 95 South Jackson Street, Seattle, WA 98104, at 12:00 noon
local time no later than three (3) business days following the date all
third-party consents, approvals and related agreements to the transactions
contemplated by this Agreement have been obtained, or such other time and place
as the parties may otherwise agree in writing but in no event later than
December 15, 2000.

                3.2 Obligations to Be Performed at Closing. At Closing:

                        3.2.1 Bill of Sale. Seller shall deliver title to the
Assets and control thereof to Purchaser. Seller shall execute and deliver a Bill
of Sale substantially in the form attached hereto as Exhibit 3.2.1.

                        3.2.2 Further Assurances. Each of the parties shall
execute all other documents and take such other actions as are required by other
covenants contained in this Agreement or which are otherwise reasonably
necessary to carry out the terms of this Agreement and consummate the
transactions contemplated hereby.

        4. Representations and Warranties of Seller. To induce Purchaser to
enter into and perform this Agreement, and subject to the exceptions set forth
in the Seller Disclosure Schedule (which exceptions shall specifically identify
a Section, Subsection or clause of a single Section or Subsection hereof, as
applicable, to which such exception relates), Seller represents and warrants to
Purchaser as follows that:

                4.1 Legal Status of Seller. Seller is a corporation duly
organized, validly

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existing and in good standing under the laws of the State of California, and it
has all requisite power and authority to own, lease and operate its properties
and assets and carry on the business as it is now conducted. Seller is duly
qualified to transact business as a corporation and is in good standing in all
jurisdictions in which the failure to be so qualified would result in a material
liability to Seller or have a material adverse effect upon the business of
Seller. Seller has full power and authority to execute, deliver and perform this
Agreement.

                4.2 Due Authorization and Execution. This Agreement has been
duly authorized, executed and delivered by Seller and is a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms, except
as enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally or (ii) general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or at law).

                4.3 Subsidiaries and Affiliates. Seller does not own, directly
or indirectly, any capital stock or other equity securities of, or otherwise
control, any corporation, partnership, limited liability corporation or
partnership, joint venture or other business association.

                4.4 No Approvals or Notices; No Conflicts. The execution,
delivery and performance of this Agreement and the consummation of the
transactions by Seller contemplated hereby will not (a) conflict with or
constitute a default or material violation (with or without the giving of
notice, or the lapse of time, or both) of any provision of law or any judgment,
decree, order, regulation or rule of any court or other governmental authority,
or of any permit, authorization, status, concession, franchise, license,
statute, law, ordinance, rule or regulation applicable to Seller or Seller's
assets; (b) require any consent, approval or authorization of, or declaration,
filing or registration with, any Person as relates to Seller other than as
listed on Schedule 4.4 of the Seller Disclosure Schedule, (c) result in a
default (with or without the giving of notice, or the lapse of time, or both)
under, acceleration or termination of, or the creation in any party of the right
to accelerate, terminate, modify or cancel, or give rise to an acceleration of
any obligation or to loss of a material benefit under, any agreement, lease,
note, bond, mortgage, indenture or other restriction, encumbrance, obligation or
liability to which Seller is a party or by which Seller is bound or to which
Seller's Assets are subject; (d) result in the creation of any lien or
encumbrance upon any of the Assets of Seller, or (e) conflict with or result in
a breach of or constitute a default under any provision of the articles of
incorporation or bylaws of Seller.

                4.5 Title to the Purchased Assets. Seller has good and
marketable title to the Purchased Assets, free and clear of any liens,
mortgages, pledges, encumbrances, security interests, restrictions, covenants,
adverse claims and charges of any kind other than those set forth on Schedule
4.5 of the Seller Disclosure Schedule.

                4.6 Balance Sheets. The Balance Sheets delivered to Purchaser by
Seller have been prepared in accordance with GAAP, except that such Balance
Sheets do not include the footnotes and statements of cash flow required by
GAAP, and they fairly present, subject to the foregoing exception, the assets,
liabilities and shareholders' equity of Seller (or any predecessor entity) as of
the dates thereof and the results of its operations for the indicated periods,
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved.

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                4.7 Absence of Undisclosed Liabilities. Except for its
obligations arising under this Agreement, its obligations under the Contracts
described on Schedule 2.2 hereof (correct and complete copies of which have been
provided to Purchaser), the obligations described on Schedule 4.7 of the Seller
Disclosure Schedule and the Excluded Liabilities, Seller has no material
liabilities, obligations or commitments of any nature (whether accrued, absolute
or contingent, known or unknown, and whether matured or unmatured), including,
without limitation, any indebtedness for borrowed money and all tax liabilities
due or to become due.

                4.8 Absence of Certain Changes or Events. Except as specifically
provided in this Agreement or as otherwise disclosed on Section 4.8 of the
Seller Disclosure Schedule, Seller has not, since the date of the most recent
Balance Sheet, and will not through and including the Closing Date:

                        4.8.1 entered into or agreed to enter into any material
transaction, agreement or commitment other than in the ordinary course of
business;

                        4.8.2 forgiven or canceled any indebtedness or waived
any claims;

                        4.8.3 entered into any contract with or commitment to
any individual regarding such person's employment as an employee or engagement
as an independent contractor (including any salary, bonus, pension,
profit-sharing, severance, or other plan or commitment for compensation);

                        4.8.4 entered into any transaction, agreement or
commitment that, individually or in the aggregate, has or have interfered or
reasonably could be expected to interfere materially with the normal and usual
operations of the Business;

                        4.8.5 suffered any material adverse change in its
working capital, financial condition, assets, earnings, reserves or operations;

                        4.8.6 borrowed or agreed to borrow any funds, assumed or
become subject to, whether directly or by way of guarantee or otherwise, any
debt obligation, except debt obligations incurred in the ordinary course of the
Business;

                        4.8.7 paid, discharged or satisfied any material claims,
liabilities or obligations (absolute, accrued or contingent) other than the
payment, discharge, and satisfaction in the ordinary course of the Business of
liabilities and obligations reflected or reserved against in the Balance Sheets
or incurred in the ordinary course of business;

                        4.8.8 permitted or allowed any of the Property to be
subjected or subordinate to any mortgage, pledge, lien, security interest or
encumbrance;

                        4.8.9 sold, transferred or otherwise disposed of any of
the Property other than in the ordinary course of business;

                        4.8.10 declared, paid or set aside for payment any
dividend or other distribution in respect of Seller's capital stock or redeemed,
purchased or otherwise acquired, directly or indirectly, any shares of capital
stock or other securities of Seller, or otherwise

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permitted the withdrawal by any Person from Seller of any cash or other assets
(real, personal or mixed, tangible or intangible), in compensation, payment of
indebtedness, or otherwise, other than payments of compensation in the ordinary
course of business;

                        4.8.11 paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement with,
any Person, except as described on Schedule 4.8.11 of the Seller Disclosure
Schedule;

                        4.8.12 entered into any power of attorney or any
obligations or liabilities (whether absolute, accrued, contingent or otherwise)
with Seller as guarantor, surety, cosigner, endorser, comaker or indemnitor in
respect of the obligation of any other Person; or

                        4.8.13 agreed, whether in writing or otherwise, to take
any action described in this Section 4.8.

                4.9 Leasehold Interest. Seller has a valid leasehold interest
(arising from the lease(s) described on Schedule 4.12 of the Seller Disclosure
Schedule) in certain real property described on Schedule 4.9 of the Seller
Disclosure Schedule, including all improvements, fixtures and appurtenances
thereto. Seller does not hold any interest in real property not described on
Schedule 4.9 of the Seller Disclosure Schedule.

                4.10 Nature and Condition of Assets. The description of the
Assets set forth on Schedule 2.1 of the Seller Disclosure Schedule is an
accurate and complete description of all material Assets used in the conduct of
the Business. The Assets are in good condition and repair, except for normal
wear and tear, and are adequate for the uses to which each is being put by
Seller. All equipment, computer hardware, fixtures, parts and supplies are of
good and merchantable quality, useable in accordance with customary business
practices in the ordinary course of business.

                4.11 Contracts. All material contracts, agreements, commitments
and instruments to which Seller is subject or by which it is bound are listed on
Schedule 4.11 of the Seller Disclosure Schedule. True and complete copies of all
such contracts and agreements (and all amendments thereto) have been delivered
to Purchaser. Seller has performed all material obligations imposed upon it
under each contract to be performed prior to the Closing Date. Neither Seller
nor to the knowledge of Seller (including Seller's actual knowledge and such
knowledge as should have been obtained by Seller in the reasonable conduct of
the Business) any other party to any such contract has entered into any course
of dealing or course of performance contrary in any material respect to the
express terms of such contract. Neither Seller nor to the knowledge of Seller
(including Seller's actual knowledge and such knowledge as should have been
obtained by Seller in the reasonable conduct of the Business) any other party to
any such contract is in default thereunder, nor is there any event which with
notice or lapse of time, or both, would constitute a default by Seller
thereunder. Except as set forth on Schedule 4.11 of the Seller Disclosure
Schedule, no consent is required from any party under any such contract in
connection with the consummation of the transactions contemplated by this
Agreement.

                4.12 Leases. The lease ("Lease") creating Seller's leasehold
interests in the Real Estate is described on Schedule 4.12 of the Seller
Disclosure Schedule. Other than the

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Lease, there are no leases, subleases, tenancies or licenses of any portion of
the Real Estate. The Lease is valid, in full force and effect and there are no
existing defaults by Seller, or to Seller's knowledge the landlord, and Seller
has not received notice of default with respect to the Lease, nor has there been
any event which with the giving of a notice, or the lapse of time, or both,
would constitute a default thereunder. Except as set forth on Schedule 4.12 of
the Seller Disclosure Schedule, no consent is required from any party under the
Lease in connection with the consummation of the transactions contemplated by
this Agreement, and Seller has not received notice nor has any knowledge that
any party to the Lease intends to cancel, terminate or refuse to renew same or
to exercise or decline to exercise any option or other right thereunder.

                4.13 Proprietary Rights. Schedule 4.13 of the Seller Disclosure
Schedule sets forth a true and complete list of all patents, patent
applications, trademark and service mark rights and registrations, applications
for trademark and service mark registration, copyrights and registrations,
applications for copyright registration, assignments, license agreements
(whether written or oral) and other registrations, applications, documents and
other instruments evidencing proprietary rights, domestic and foreign, or
evidencing any patent, copyright, trademark, trade name, service mark, trade
dress, trade secret or other intellectual property rights that are necessary or
desirable in the conduct of the Business (together, the "Intellectual
Properties"). Except as set forth in Schedule 4.13 of the Seller Disclosure
Schedule, Seller possesses full right and authority to use all know-how,
proprietary information, copyrights, trademarks, patent rights and other
proprietary and intellectual properties necessary to the conduct of the Business
as presently conducted without infringing the rights of others, including the
Intellectual Properties, all of which are transferred to Purchaser pursuant to
this Agreement, free and clear of all liens, claims, options, charges,
encumbrances, security interests or claims of ownership of any person or of any
obligation to pay royalties, license fees or other payments. Except for any
agreements with Purchaser, Seller has not entered into any agreement pursuant to
which it has agreed not to compete with any person. The operations of Seller as
currently conducted do not infringe any copyright, trademark, service mark,
trade name, patent rights or any other right of any Person, whether registered
or unregistered, nor do they involve the misappropriation of any trade secret of
any Person. Seller has not received notice from any Person alleging that such
infringement or misappropriation has occurred or is continuing.

                4.14 Licenses, Permits, Authorizations, Etc. Seller has received
and currently holds all required governmental approvals, authorizations,
consents, licenses, orders, registrations and permits of all agencies, whether
federal, state or local, the failure to obtain which would have a material
adverse effect on the assets, liabilities or financial condition of Seller or
the operation of the Business.

                4.15 Condemnation and Similar Proceedings. Neither the whole nor
any portion of the Assets or any other asset of Seller is subject to any
governmental decree or order to be sold or is being condemned, expropriated or
otherwise taken by any governmental or quasi-governmental entity, with or
without payments of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed or threatened.

                4.16 Taxes. Seller has duly and timely filed with the
appropriate governmental agencies (domestic and foreign), or obtained extensions
for filing, all tax returns, information returns and reports for all Taxes
required to have been filed by Seller. Seller has paid in full all taxes
(domestic and foreign and including, without limitation, withholding
obligations), interest

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and other governmental charges and penalties that have become due pursuant to
such returns that have been filed or for which extensions have been obtained,
and all other Taxes, interest and other governmental charges and penalties that
have become due and payable. Seller has not filed nor entered into any election,
consent, extension agreement or waiver that extends any applicable statute of
limitations. Seller is not a party to any action or proceeding, pending or
threatened, by any governmental authority, domestic or foreign, for assessment
or collection of Taxes, no unresolved claim for assessment or collection of such
taxes has been asserted against Seller; and no audit or investigation by
foreign, federal, state or local governmental authorities is under way with
respect to Seller. There are no liens for current taxes not yet due (other than
personal property taxes relating to the Property) with respect to Seller or the
Property.

                4.17 Legal Proceedings. Except as described on Schedule 4.17 of
the Seller Disclosure Schedule, there are no claims, actions, suits,
arbitrations, proceedings or investigations pending or, to the best knowledge of
Seller, threatened against Seller before or by any court or governmental or
non-governmental department, commission, board, bureau, agency, instrumentality,
or any other Person. There are no outstanding or unsatisfied judgments, orders,
decrees or stipulations naming Seller which would alone or in the aggregate have
or would be expected to have any material adverse effect upon the business,
business prospects, assets or financial condition of Seller.

                4.18 Compliance With Laws.

                        4.18.1 Generally. Seller has complied, and is in
compliance, with all federal, state and local laws, rules, regulations,
ordinances, decrees and orders applicable to the operation of the business, or
to its owned or leased properties, the failure to comply with which would have a
material adverse effect on the business or the assets or operations of the
Business.

                        4.18.2 Building Codes, Zoning, Etc. Without limiting the
provisions of Section 4.18.1 hereof, Seller is not in violation of any
applicable building, zoning, fire or other similar law, ordinance or regulation
in respect of the Real Estate or any of its plants, structures or facilities or
its operations, the failure to comply with which would have a material adverse
effect on the Business. Seller has not received notification that Seller is in
violation of any such law, ordinance or regulation, and no proceeding or inquiry
has been initiated or threatened with respect to any alleged violation (against
Seller or in any way relating to the Property) of any such laws, ordinances or
regulations. No such law, ordinance or regulation currently restricts, or based
upon the Business as currently conducted, may reasonably be expected to
restrict, the use in the business of all or any portion of the Real Estate or
the conduct thereon of the Business.

                4.19 Environmental Matters. The Real Estate and the Property and
their existing uses by Seller complies and has at all times in the past complied
with, and Seller is in compliance with and have not violated, any applicable
federal, state, county or local statutes, laws, regulations, guidelines, rules,
ordinances, codes, licenses, permits, judgments, writs, decrees, injunctions, or
orders of any governmental agency relating to environmental (including without
limitation air, water, groundwater, soil, sediments, noise and odor) matters
(together, the "Environmental Laws"), including without limitation local, state
and federal clean air laws and regulations, including but not limited to the
federal Clean Air Act, 42 U.S.C. Sections 7401 et seq.; local, state and federal
water pollution control laws and regulations, including but not limited to the
federal Clean Water Act, 33 U.S.C. Sections 1251 et seq. and the Porter-Cologne
Act; the Resource

<PAGE>   13

Conservation and Recovery Act (as amended by the Hazardous Waste and Solid Waste
Amendments of 1984 and 1991), 42 U.S.C. Sections 6901 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act (as amended by the
Superfund Amendments and Reauthorization Act of 1986)("CERCLA"), 42 U.S.C. 9601
et seq.; and all other applicable federal, state, county, local and foreign
environmental requirements. Without limiting the generality of the foregoing:

                        4.19.1 Seller possesses valid and current permits,
licenses, authorizations and/or registrations for all activities that require a
permit, license, authorization and/or registration, including but not limited to
water discharges, air emissions, hazardous waste generation, storage and
disposal, and use of underground storage tanks;

                        4.19.2 there has not been any "release," "threatened
release" or "disposal" of "Hazardous Substances," "Pollutants" or "Contaminants"
(as defined in CERCLA or such applicable state and local laws that may exist),
petroleum products or hazardous or solid wastes on or from the Real Estate or
the Property, or any other asset owned, leased or used by Seller including,
without limitation, release of Hazardous Substances, Pollutants or Contaminants,
petroleum products or hazardous or solid wastes that could subject Seller, the
Real Estate or the Property to material liability under the Environmental Laws;

                        4.19.3 there is no work, repair, or construction in a
material amount, material capital expenditure, or materially increased operating
cost with respect to the Real Estate or the Property that is required in order
for Seller to obtain all the permits, licenses and authorizations necessary
under the Environmental Laws for Seller to carry on the Business as currently
conducted, or to attain or maintain compliance under the Environmental Laws; and

                        4.19.4 neither Seller nor any predecessor entity has
ever received notification of any violation of any Environmental Laws relating
to the Business or the Real Estate or the Property or their use; there are no
writs, injunctions, decrees, orders or judgments outstanding, and no actions,
claims, proceedings or investigations pending or threatened under the
Environmental Laws relating to the ownership, use, maintenance or operation of
the business, the Real Estate or the Property; and Seller has no knowledge of
any basis for any such actions, claims, proceedings or investigations being
instituted or filed.

                4.20 Labor Relations; Employment. Seller is not a party to any
collective bargaining contracts nor any other contracts or understandings with
any labor unions or any other representative of the Seller's employees and no
collective bargaining agreement is currently being negotiated by Seller. Except
as disclosed on Schedule 4.20 of the Seller Disclosure Schedule, Seller is not a
party to any written employment agreement with any of its officers, directors,
employees, consultants, agents or other persons, and any such agreement is
terminable by Seller at will without penalty or cost to such Person, except as
prohibited by applicable law.

                Seller is in compliance in all material respects with all
federal and state laws respecting employment and employment practices, terms and
conditions of employment and wages. No grievance which might have a material
adverse effect on Seller in the conduct of its business nor any arbitration
proceeding arising out of or under collective bargaining agreements is pending
and no claim therefor has been asserted. Seller has no present or threatened
labor disturbances or pending arbitration, unfair labor practice, grievance or
other proceedings nor

<PAGE>   14

litigation which materially and adversely affects or may materially or adversely
affect the financial condition of Seller with respect to its employees and has
had no such labor disturbance, proceedings or litigation for the past eighteen
(18) months and which remains unresolved on the date hereof. Seller does not
know of any present or threatened walkout, strike or any similar occurrence
which materially or adversely affects or may materially or adversely affect the
assets, properties, business, condition or prospects of Seller.

                Seller acknowledges that the individuals identified on Schedule
4.20 of the Seller Disclosure Schedule are deemed by Purchaser to be key
technology employees, the loss of any one of which in the six month period
following the Closing Date would have a material adverse effect on the Business
and Purchaser, and Seller agrees that the remedy for any such loss shall be as
specified in Schedule 4.20 of the Seller Disclosure Schedule.

                4.21 Relations with Partners and Clients. To the best knowledge
of Seller, the relationships of Seller with its partners and clients, taken as a
whole, are good commercial working relationships and within the last twelve (12)
months no material partner or client of Seller has canceled or otherwise
terminated, or threatened in writing to cancel or otherwise terminate, its
relationship with Seller or has during the last twelve (12) months decreased
materially, or threatened to decrease or limit materially, its services,
supplies or materials to Seller or its usage of the services or products of
Seller. Seller has no knowledge: (i) of any material adverse condition affecting
the services available to Seller; or (ii) that any such partner or client
intends to cancel or otherwise modify its relationship with Seller or to
materially decrease or limit its services to Seller or its usage of the services
or products of Seller. The parties recognize that the nature of Seller's
Business is that engagements are often on a campaign-by-campaign basis, and that
some clients complete their current campaigns (until the client wishes to do
another campaign); accordingly the parties agree that any such non-continuance
or non-renewal shall not be deemed to constitute "cancellation" , "termination",
"decreased", or "modified" as such concepts are used in this Section 4.21.

                4.22 Employee Benefit Plans. Seller maintains no "employee
welfare benefit plan" or "employee pension benefit plan" as such terms are
defined under the Employee Retirement Income Security Act of 1974, as amended.

                4.23 Brokerage. Neither Seller nor any director, officer, agent
or employee acting on behalf of Seller has retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fees due in violation of the foregoing representation shall be paid
by Seller.

                4.24 Information Furnished. Neither this Agreement, the Sellers
Disclosure Schedule, nor the information and reports furnished by Seller to
Purchaser in connection with this Agreement, taken as a whole, contain any
material misstatement of fact or omit to state any material fact necessary to
make such statements, in the light of the circumstances under which they were
made, not misleading.

<PAGE>   15

                4.25 Securities Laws.

                        4.25.1 Seller and each of its shareholders who shall be
receiving the Shares are accredited investors for purposes of Rule 501 under
Regulation D of the Securities Act of 1933, as amended (the "Securities Act")
and, accordingly, each has sufficient experience in evaluating and investing in
private placement transactions of securities and companies similar to Purchaser
so that it is capable of evaluating the merits and risks of its investment in
Purchaser and has the capacity to protect its own interests.

                        4.25.2 Seller and each of its shareholders acknowledges
that the Shares will not be registered under the Securities Act or the
securities laws of any state of the United States and that Purchaser has offered
and is issuing and selling the Shares to Seller in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act and similar
exemptions under the securities laws of all applicable jurisdictions. Seller and
each of its shareholders who shall be receiving the Shares are acquiring all the
Shares for investment for their own account and not with a view to the resale or
distribution of any of the Shares, in whole or in part and of record or
beneficially, to any other Person. Seller and each of its shareholders who shall
be receiving the Shares acknowledge that the Shares are not being purchased as a
result of any general solicitation or general advertising.

                        4.25.3 Seller and each of its shareholders who shall be
receiving the Shares have had an opportunity to review a copy of Purchaser's
Annual Report on Form 10-K, for the fiscal year ending December 31, 1999, and
Purchaser's Quarterly Report on Form 10-Q, for the quarters ending March 31,
2000, June 30, 2000, and September 30, 2000 (together, the "Reports"). Seller
and each of Seller's shareholders who shall be receiving the Shares has
carefully reviewed such Reports and has made inquiry concerning Purchaser, its
business, its personnel and its prospects. Seller and each shareholder who shall
be receiving the Shares has had an opportunity to discuss Purchaser's business,
management and financial affairs with its management. Seller and each
shareholder who shall be receiving the Shares has also had an opportunity to ask
questions of officers of Purchaser concerning the business of Purchaser, which
questions were answered to the satisfaction of Seller or such shareholder, as
the case may be.

                        4.25.4 Seller and each shareholder who shall be
receiving the Shares acknowledges that the Shares must be held indefinitely
unless subsequently registered under the Securities Act and the securities laws
of every jurisdiction applicable to such resale or unless exemptions from such
registration requirements are available. Seller and each shareholder who shall
be receiving the Shares further acknowledges that Purchaser has no obligation to
register the Shares under the Securities Act or the securities laws of any state
of the United States; provided, that Purchaser may, in its sole discretion,
elect to register the Shares at some time in the future, if, in Purchaser's
reasonable business judgement, such registration is in the best interests of
Purchaser and its shareholders, taken as a whole.

                        4.25.5 Seller and each shareholder who shall be
receiving the Shares consents to the placement of the following legend on the
certificates representing the Shares and the placement of a stop-transfer order
in the stock records of Purchaser to prohibit the recording of a transfer of the
Shares other than in compliance with such legend:

<PAGE>   16

        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
        UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
        OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND SUCH
        SECURITIES MAY NOT BE OFFERED FOR RESALE, SOLD, ASSIGNED OR OTHERWISE
        HYPOTHECATED FOR VALUE (INCLUDING BY ANY PLEDGEE) UNLESS (A) THE
        SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND THE SECURITIES
        LAWS OF ALL APPLICABLE STATES OF THE UNITED STATES, OR (B) THE
        SECURITIES ARE OFFERED AND SOLD IN COMPLIANCE WITH AN EXEMPTION FROM
        SUCH REGISTRATION REQUIREMENTS AND, AT THE OPTION OF THE COMPANY, THE
        HOLDER PROVIDES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY TO SUCH
        EFFECT.

        5. Representations and Warranties of Purchaser. To induce Seller to
enter into this Agreement, Purchaser represents and warrants to Seller as
follows:

                5.1 Legal Status of Purchaser. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington, has all requisite corporate power and authority to acquire the
Assets, to assume the Assumed Liabilities and to carry on its business as it is
now being conducted. Purchaser has full power and authority to execute, deliver
and perform this Agreement.

                5.2 Due Authorization and Execution. This Agreement has been
duly authorized, executed and delivered by Purchaser and is a legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except as enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors' rights generally or (ii) general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law).

                5.3 No Approvals or Notices; No Conflicts. The execution,
delivery and performance of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby will not (a) conflict with or constitute a
default or violation (with or without the giving of notice, or the lapse of
time, or both) of any provision of law or any judgment, decree, order,
regulation or rule of any court or other governmental authority, or of any
permit, authorization, status, concession, franchise, license, statute, law,
ordinance, rule or regulation applicable to Purchaser or to Purchaser's
properties or assets; (b) require any consent, approval or authorization of, or
declaration, filing or registration with, any Person as relates to Purchaser;
(c) result in a default (with or without the giving of notice, or the lapse of
time, or both) under, acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, or give rise to
an acceleration of any material obligation or to loss of a material benefit
under, any material agreement, lease, note, bond, mortgage, indenture or other
restriction, encumbrance, obligation or liability to which Purchaser is a party
or by which Purchaser is bound or to which Purchaser's assets are subject; (d)
result in the creation of any material lien or encumbrance upon any of the
assets of Purchaser; or (e) conflict with or result in a breach of or constitute
a default under any provision of the articles of incorporation or bylaws of
Purchaser.

                5.4 The Shares. Upon delivery of stock certificates by Purchaser
representing

<PAGE>   17

the Shares and Retained Shares, receipt by Purchaser of the Purchased Assets,
and satisfaction of such conditions as may apply under this Agreement, the
Shares will be duly authorized, validly issued, fully paid and nonassessable
outstanding shares of common stock of Purchaser.

                5.5 Legal Proceedings. There are no claims, actions, suits,
arbitrations, proceedings or investigations pending or, to the best knowledge of
Purchaser after due inquiry, threatened against Purchaser before or by any court
or governmental or non-governmental department, commission, board, bureau,
agency, instrumentality, or any other Person which if resolved adverse to
Purchaser would preclude Purchaser from satisfying any material obligation under
this Agreement. There are no outstanding or unsatisfied judgments, orders,
decrees or stipulations naming Purchaser which restrict or prohibit the
transactions contemplated herein. There is no material litigation required to be
reported by Purchaser to the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, except as set forth in the Reports.

                5.6 Brokerage. To the extent Purchaser has retained a broker or
other investment advisor to assist in the negotiation and consummation of this
Agreement, any brokerage or finder's fee due such Person shall be paid by
Purchaser.

                5.7 No Adverse Change. Since the date of the most recent Report
filed by Purchaser with the Securities and Exchange Commission and the date of
such additional business information provided by Purchaser to Seller, there has
been no material adverse change in the business, prospects, assets, or results
of operations, or in the condition, financial or otherwise, of Purchaser and its
subsidiaries, taken as a whole.

        6. Covenants of the Parties.

                6.1 Covenants of Seller. Seller covenants and agrees with
Purchaser to perform and observe the following:

                        6.1.1 Inspection. From the date of this Agreement to and
including the Closing Date, Seller will grant to Purchaser, its representatives,
employees, accountants, agents and attorneys full access to, and the opportunity
to examine, and make copies of, all books, records, documents, instruments and
papers of Seller, and the right during normal business hours to inspect all of
Seller's properties, assets and operations; and Seller will cause its agents,
employees, managers, attorneys and accountants to furnish such additional
information as Purchaser shall from time to time reasonably request.

                        6.1.2 Cooperation. Seller will fully cooperate with
Purchaser and with Purchaser's counsel and accountants in connection with any
steps required to be taken as part of Seller's obligations under this Agreement.
Seller will use its best efforts to cause all conditions to the parties'
obligations to effect the Closing under this Agreement to be satisfied as
promptly as reasonably possible and to obtain all consents and approvals
necessary for the due performance of this Agreement and for the satisfaction of
the conditions hereof.

                        6.1.3 Advice of Claims. From the date of this Agreement
to and including the Closing Date, Seller will promptly advise Purchaser in
writing of the commencement or notice of any claims, litigation or proceedings
against or affecting Seller.

<PAGE>   18

                        6.1.4 Conduct Prior to the Closing. From the date of
this Agreement to and including the Closing Date, except as specifically
provided in this Agreement or otherwise specifically approved in each instance
in writing by Purchaser:

                                (a) Seller will not knowingly take any action
or, insofar as it is able to do so, suffer to be taken any action that will
cause any representation, warranty or schedule to this Agreement to be untrue at
the Closing Date;

                                (b) Seller will carry on the Business in the
ordinary course, and Seller shall not institute any materially new methods of
distributing, purchasing, selling, leasing, management, developing, accounting
or operation or engage in any transaction or activity, enter into any agreement
or make any commitment, except in the ordinary course of business;

                                (c) Seller will not organize any new subsidiary
or acquire any capital stock or other equity or ownership interest in any
business;

                                (d) Seller will preserve its existence and use
its best efforts to preserve its relationships with suppliers, customers,
clients, partners and others having business relations with it;

                                (f) Seller shall not do any act or omit to do
any act, or, insofar as it is able to do so, permit any act or omission to act,
which will cause a breach of any material contract or commitment of Seller; and

                                (g) Seller shall not make any payment or
distribution to, or otherwise engage in any transaction of any kind with, any
shareholder or creditor of Seller, except as otherwise provided herein.

                        6.1.5 Additional Information. Seller will promptly
furnish Purchaser with copies of Seller's unaudited balance sheets and
statements of income or earnings prepared for any periods subsequent to the date
of the Balance Sheets and prior to the Closing Date in the form customarily
prepared by Seller.

                        6.1.6 Delivery of Purchased Assets. Commencing on the
Closing Date and continuing thereafter, Seller shall cause to be delivered into
the possession or control of Purchaser all of the Purchased Assets, which shall
include, without limitation, the original copies of Contracts and the original
copies of all records, files, documents, correspondence and papers pertaining to
the Purchased Assets.

                        6.1.7 Use of Names. As of the Closing, Seller will
refrain from using "XMarkstheSpot," or any similar names as a trade name,
trademark or service mark in connection with any business or activity, and
within ten (10) days of the Closing Date, Seller will change its corporate name
to a name the parties mutually agree upon.

                        6.1.8 Further Actions. Seller shall, at any time and
upon the request of Purchaser, do, execute, acknowledge and deliver or shall
cause to be done, executed, acknowledged and delivered all such further acts,
assignments, transfers, conveyances,

<PAGE>   19

assurances and other instruments and actions as may be reasonably required for
the transferring, conveying, assigning, delivering, assuring and assisting in
collecting and reducing to the possession of Purchaser of any and all of the
Purchased Assets. Without limiting the generality of the foregoing, Seller will
use its best efforts to provide to Purchaser any financial statements or other
information that may be required by the Securities and Exchange Commission or
other regulatory authority. Seller further agrees to perform or cause to be
performed at and after the Closing Date hereof any and all further acts as may
be reasonably necessary to consummate the transactions contemplated hereby.

                        6.1.9 Income and Other Taxes. Seller shall in a timely
manner file all income, sales, use, franchise and other tax returns and pay
related required taxes associated with the operations of Seller through and
including the Closing Date and those arising from the transactions contemplated
hereby, including capital gains tax, if any, except the parties intend that
Purchaser shall receive the benefit of all of Seller's operating loss carry
forward tax credits applicable to Seller's operation of the Business for all
periods prior to the Closing Date pursuant to Section 381 of the Code, subject
to the provisions of Section 382 of the Code.

                        6.1.10 Employees. As of Closing, Seller shall have
terminated all of its employees and independent contractors. At the request of
Purchaser, Seller shall assist Purchaser in hiring any former employees and
retaining any independent contractors of Seller. Except for the individuals
identified on Schedule 6.1.10 of the Seller Disclosure Schedule who each have
accepted a conditional offer of employment from Purchaser that is subject to the
consummation of the transactions contemplated hereunder, Purchaser is under no
obligation to hire any employee or retain any independent contractor of Seller
but is free to do so in its sole discretion. Seller shall remain solely liable
for all liabilities and obligations of Seller in its capacity as employer,
including all benefits, severance, medical, dental and optical claims,
disability payments, insurance claims of any type or nature, and retirement and
vacation benefits relating to Sellers' past and present employment of, all
current and former employees arising or accruing through the Closing Date. With
respect to such employees, Seller shall have sole responsibility for complying
with, and shall retain all liabilities and obligations resulting from any
noncompliance with, the requirements of COBRA, the WARN Act and any termination
of employment caused by reduction in work force, shutdown, plant closure, or
other employment termination or practice in connection with Seller's past
practices or the transactions contemplated by this Agreement.

                6.2 Covenants of Purchaser.

                        6.2.1 Cooperation; Best Efforts. Purchaser covenants and
agrees with Seller to fully cooperate with Seller and with its counsel in
connection with any steps required to be taken as part of Purchaser's
obligations under this Agreement. Purchaser will use its best efforts to cause
all conditions to the parties' obligations to effect the Closing under this
Agreement to be satisfied as promptly as possible and to obtain all consents and
approvals necessary for the due and punctual performance of this Agreement and
for the satisfaction of the conditions hereof. Upon Closing, Purchaser shall
assume and perform the Assumed Liabilities.

                        6.2.2 Delivery of Shares. Purchaser shall deliver the
Shares, other than the Retained Shares, in accordance with Section 2.3 hereof.

<PAGE>   20

                        6.2.3 Hiring of Employees. Subject to the Closing and
consummation of the transactions contemplated under this Agreement, Purchaser
shall honor the terms of the respective offer letters extended to and executed
by the individual employees of Seller identified on Schedule 6.1.10 of the
Seller Disclosure Schedule.

                6.3 Non-Competition and Non-Solicitation.

                        6.3.1 Non-Competition. For a period of one year from the
Closing Date (the "Restricted Period"), neither Seller nor such employees of
Seller as Purchaser may designate shall, unless released from such prohibition
in writing by Purchaser (and consistent with such conditions as Purchaser may
impose on any such release), anywhere in the world, directly or indirectly, be
employed by, own, manage, operate, join, control or participate in the
ownership, management, operation or control of or be connected in any manner
with any business engaged in the internet-based delivery of third-party
promotional offers over a network of third-party internet sites. Seller and any
Person subject to the restrictions of this Section 6.3.1 shall be deemed to be
connected with a business if such business is carried on by a partnership in
which Seller or such Person is a general or limited partner, consultant or
employee or by a corporation or association of which Seller or such Person is a
shareholder, officer, director, employee, member, consultant or agent; provided
that nothing contained in this Section 6.3 shall prevent the purchase or
ownership by Seller or any such Person of five percent (5%) or less of the
outstanding shares of any corporation.

                        6.3.2 Non-Solicitation. During the Restricted Period,
neither Seller nor such employees of Seller as Purchaser may designate shall,
directly or indirectly, solicit, influence or entice any employee, consultant,
or independent contractor of Purchaser to cease his or her relationship with
Purchaser or solicit, entice or in any way divert any customer or supplier of
Purchaser to do business with Seller, or any entity in which a Person restricted
by the provisions of section 6.3.1.hereof is an employee, owner, officer,
director, shareholder, partner, joint venturer or agent.

                        6.3.3 Reasonableness and Equitable Relief. Seller and
Purchaser each agree that adequate consideration has been given for Seller to
enter into this Section 6.3 and assume the obligations contained in this Section
6.3. Seller recognizes that (i) the provisions of this Section 6.3 are
reasonable and necessary for the protection of Purchaser in light of the
consideration paid and payable by Purchaser to Seller under this Agreement, (ii)
Purchaser would not have entered into this Agreement or consummated the
transactions contemplated hereunder without Seller and the Persons subject to
the provisions hereof having agreed to be bound by the provisions of this
Section 6.3, (iii) damages that would be sustained by Purchaser as a result of a
breach of this Section 6.3 cannot be adequately remedied by money damages and
(iv) notwithstanding any other provision of this Agreement, in addition to any
other remedy Purchaser may have under this Agreement or at law, Purchaser shall
be entitled to injunctive and other equitable relief to prevent or curtail any
breach of any provision of this Section 6.3.

                6.4 Seller Receivables. On the Closing Date, Seller will provide
Purchaser a schedule, which will set forth the list of the trade accounts
receivable as of the Closing Date accrued on the books of Seller arising from
Seller's operation of the Business and due Seller as of such date, and all other
payments, refunds and such other sums as may be due Seller from third parties as
of such date in connection with Seller's operation of the Business

<PAGE>   21

(collectively, "Seller Receivables"). Beginning on the first business day
following delivery of the referenced schedule, Purchaser shall commence
collection of the Seller Receivables with such assistance from Scott Rozic and
such other employees of Seller as Purchaser may request from time to time.
Purchaser shall have the right to endorse the name of Seller on any checks,
drafts or instruments received with respect to the Seller Receivables for
deposit to the account of Purchaser in accordance with Purchaser's customary
business practice.

                6.5 Meeting of Shareholders. Seller shall take all actions
necessary in accordance with its articles of incorporation, bylaws and the
California General Corporation Law to obtain from its shareholders the requisite
consent and approval to this Agreement and the transactions contemplated hereby
either by way of a duly called and convened special meeting of its shareholders
or a written consent in lieu of such meeting. The shareholder vote required for
the adoption and approval of the transactions contemplated by this Agreement
shall be the vote required by Seller's articles of incorporation, bylaws and the
California General Corporation Law. Seller will, through Seller's board of
directors, recommend to its shareholders to vote in favor of the approval and
adoption of this Agreement and the transactions contemplated hereunder.

        7. Conditions Precedent to Obligations of Purchaser. The obligations of
Purchaser to perform and observe the covenants, agreements and conditions hereof
to be performed and observed by it at the Closing shall be subject to the
satisfaction of the following conditions, any one or more of which may be waived
by Purchaser. If any one of the following conditions precedent is not fully
satisfied or waived by Purchaser, by the applicable dates set forth below,
Purchaser may elect to terminate this Agreement:

                7.1 Accuracy of Representations and Warranties; Compliance With
Covenants. The representations and warranties of Seller contained herein shall
have been true when made and shall be true on and as of the Closing Date with
the same force and effect as if again made on and as of such date, and Seller
and each Shareholder shall have performed all obligations and agreements and
complied with all covenants and conditions contained in this Agreement to be
performed and complied with by it on or prior to the Closing Date.

                7.2 Seller's Certificate. Purchaser shall have received a
certificate from Seller, dated the Closing Date, substantially in the form of
Exhibit 7.2, certifying that all of the conditions set forth in Section 7 to be
fulfilled by Seller have been fulfilled and the representations and warranties
of Seller herein are true and correct on and as of the Closing Date as if again
made on and as of the Closing Date.

                7.3 Consents; Governmental Filings. There shall have been
obtained, in writing, (a) all consents and approvals which the schedules to this
Agreement indicate are required to be obtained prior to or on the Closing Date,
and (b) estoppel certificates from the lessor(s) of the Real Estate, which
consents, approvals and estoppel certificates shall be in form and substance
acceptable to Purchaser. All expenses incurred in connection with the obtaining
of such consents, approvals and estoppel certificates shall be paid by Seller.
All filings and applications required by applicable law to be made with or to
any governmental entity in connection with the transactions contemplated by this
Agreement shall have been made, and all waiting periods specified by applicable
law shall have expired or been earlier terminated, without there being any
continuing objection to the transactions contemplated hereby.

<PAGE>   22

                7.4 Opinion of Counsel for Seller. Purchaser shall have received
an opinion of counsel for Seller, dated as of the Closing Date, addressed to
Purchaser, substantially in the form of Exhibit 7.4 hereto.

                7.5 Legal Proceedings. No order of any court or administrative
agency shall be in effect which enjoins, restrains, conditions or prohibits
consummation of this Agreement, and no litigation, investigation or
administrative proceeding shall be pending or threatened which would enjoin,
restrain, condition or prevent consummation of the transactions contemplated by
this Agreement.

                7.6 No Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the
business, prospects, assets or results of operation, or in the condition,
financial or otherwise, of Seller.

                7.7 Due Diligence. Purchaser and its representatives,
accountants and legal counsel shall have been afforded full and free access to
corporate books, financial statements, records, contracts, documents, title
reports and other information concerning Seller, the Purchased Assets, the Real
Estate and the Property, and to the offices and facilities of Seller, shall have
been afforded an opportunity to ask such questions of and receive answers from
Seller's officers, managers, agents, independent accountants and representatives
concerning the business, Seller's operations, prospects, financial condition,
assets, liabilities, its status under applicable or potentially applicable
Environmental Laws, and other relevant matters as they may have deemed
reasonably necessary or desirable, and shall have determined to Purchaser's
satisfaction, in its reasonable discretion, that the Real Estate, the Purchased
Assets and the Business are as represented herein.

                7.8 Employment Agreements. Purchaser shall have entered into an
employment agreement with Scott Rozic, Sarah Remy, Frank Yien, Keith Miscione
and such other key employees of Seller as Purchaser may elect in its sole
discretion.

                7.9 Escrow Agreement. Purchaser and Seller shall have entered
into the Escrow Agreement.

        8. Conditions Precedent to Obligations of Seller. The obligations of
Seller to perform and observe the covenants, agreements and conditions hereof to
be performed and observed by it at the Closing shall be subject to the
satisfaction of the following conditions, any one or more of which may be
expressly waived in writing by Seller. If any one of the following conditions
precedent is not fully satisfied, or waived by Seller, by the applicable dates
set forth below, Seller may elect to terminate this Agreement:

                8.1 Accuracy of Representations and Warranties; Compliance With
Covenants. The representations and warranties of Purchaser contained herein
shall have been true when made and shall be true on and as of the Closing Date
with the same force and effect as if again made on and as of such date.
Purchaser shall have performed all obligations and agreements and complied with
all covenants and conditions contained in this Agreement to be performed and
complied with by it on or prior to the Closing Date.

<PAGE>   23

                8.2 Purchaser's Certificate. Seller shall have received a
certificate from Purchaser, dated as of the Closing Date, substantially in the
form of Exhibit 8.2, certifying that all of the conditions set forth in Section
8.1 to be fulfilled by Purchaser have been fulfilled and the representations and
warranties of Purchaser herein are true and correct on and as of the Closing
Date as if again made on and as of the Closing Date.

                8.3 Governmental Filings. All filings and applications required
by applicable law to be made with or to any governmental entity in connection
with the transactions contemplated by this Agreement shall have been made and
all waiting periods specified by applicable law shall have expired or been
earlier terminated without there being any continuing objection to the
transactions contemplated hereby.

                8.4 Legal Proceedings. No order of any court or administrative
agency shall be in effect which enjoins, restrains, conditions or prohibits
consummation of this Agreement, and no litigation, investigation or
administrative proceeding shall be pending or threatened which would enjoin,
restrain, condition or prevent consummation of this Agreement.

                8.5 Escrow Agreement. Purchaser and Seller shall have entered
into the Escrow Agreement.

                8.6 Approval of Shareholders of Seller. The requisite number of
shareholders of Seller shall have approved this Agreement and the transactions
contemplated hereunder on or before the Closing Date.

        9. Indemnification and Survival of Warranties.

                9.1 Indemnification.

                        9.1.1 By Seller. Seller agrees to indemnify Purchaser
and to hold Purchaser harmless against and in respect of any and all losses,
damages, costs and expenses, including reasonable attorneys' and accountants'
fees incurred by Purchaser by (i) reason of a breach of any of the
representations, warranties, covenants or agreements made by Seller in this
Agreement, or in any other instrument or agreement related hereto or executed in
connection herewith, or in any written statement or certificate delivered to
Purchaser or any agent of Purchaser in connection with this Agreement or the
transactions contemplated hereby or (ii) operation of Article 6 of the Uniform
Commercial Code as codified in California. As used in this Section 9.1.1, the
term "Purchaser" shall include Purchaser and any affiliate company and each
officer and director of Purchaser or any affiliated company.

                        9.1.2 By Purchaser. Purchaser agrees to indemnify Seller
and each Shareholder, and to hold Seller and each Shareholder harmless against
and in respect of any and all losses, damages, costs and expenses, including
reasonable attorneys' and accountants' fees, incurred by Seller by reason of a
breach of any of the representations, warranties, covenants or agreements made
by Purchaser in this Agreement, or in any other instrument or agreement related
hereto or certificate delivered to Seller in connection with this Agreement or
the transactions contemplated hereby. As used in this Section 9.1.2, the term
"Seller" shall include each officer and director of Seller.

<PAGE>   24

                        9.1.3 Notice. The party entitled to indemnification
hereunder (the "Indemnitee") shall promptly notify in writing the party against
whom indemnification is sought hereunder (the "Indemnitor") of any matters which
may give rise to the right to indemnification hereunder.

                        9.1.4 Claims. If the Indemnitee is threatened with any
claim or any claim is presented to, or any action or proceeding commenced
against, the Indemnitee which may give rise to the right of indemnification
hereunder, the Indemnitee will promptly give written notice thereof to the
Indemnitor. The Indemnitor, by delivery of written notice to the Indemnitee
within twenty (20) days of receipt of written notice for indemnity from the
Indemnitee, may elect to contest such claim, action or proceeding, in which
event such contest shall be conducted in such manner as the Indemnitor deems
necessary or advisable; provided, however, that (a) such written notice shall be
accompanied by a written acknowledgment of the Indemnitor's liability for the
indemnified liabilities and any further loss, damage or expense which the
Indemnitee might suffer as a result of the election to contest such claim,
action or proceeding, (b) the counsel undertaking the defense of such claim,
action or proceeding shall be reasonably acceptable to the Indemnitee, and (c)
if the Indemnitee requests in writing that such claim, action or proceeding not
be contested, then it shall not be contested but shall also not be covered by
the indemnities provided herein. The Indemnitor shall not have the right to
settle an indemnifiable matter except with the consent of the Indemnitee which
shall not be unreasonably withheld, after delivering a written description of
the proposed settlement to, and receiving consent from, the Indemnitee and, if
the Indemnitor is able to achieve such settlement, the Indemnitor may satisfy
its obligations with respect to such indemnified liabilities by consummating
such settlement. If the Indemnitor does not elect to contest an indemnifiable
matter, the Indemnitee shall have the right to prosecute, defend, compromise,
settle or pay any claim, but the Indemnitee shall not be obligated to do so. The
Indemnitee and the Indemnitor shall cooperate with each other in connection with
any matter or claim for indemnification.

                        9.1.5 Effect of Failure to Give Notice. Failure to give
any notice shall not affect an Indemnitee's right to indemnity except to the
extent the Indemnitor has been materially prejudiced thereby.

                9.2 Indemnity Set-Off. From time to time beginning immediately
after the Closing Date and continuing until the Settlement Date, Purchaser shall
be entitled to set off against the balance of the Purchase Price any amount of
money for which Purchaser is entitled to be indemnified under this Section 9. In
the event that Purchaser exercises such set-off right, Purchaser shall give
written notice to Seller of such exercise setting forth a general description of
the grounds upon which Purchaser is entitled to indemnification. In addition to
its rights under this Section 9.2, Purchaser shall be entitled to pursue all
legal and equitable remedies for the indemnification provided by this Section 9
or to which Purchaser may otherwise be entitled under applicable law. The
aggregate sum that is set off pursuant to this Section 9.2 against the Purchase
Price shall be converted to and expressed as that number of Shares equal to the
quotient of such aggregate sum divided by $2.00. The resulting Share amount is
referred to herein as the "Indemnity Amount" and shall be applied against the
Retained Shares on the Settlement Date in accordance with Section 2.5.2 hereof.

                9.3 Survival. Notwithstanding any investigation made by Seller
or Purchaser, the representations and warranties of Seller and of Purchaser
contained in this Agreement and all

<PAGE>   25

statements contained in any certificate or other instrument delivered by Seller
or Purchaser pursuant to this Agreement or in connection with the transactions
contemplated hereby (which shall be deemed to be representations and warranties
of such party hereunder) shall survive the Closing only until the first
anniversary of the Closing Date.

                9.4 Minimum. Notwithstanding any other provision in this Section
9, an Indemnitee shall be entitled to indemnification for losses, damages, costs
and expenses only if and to the extent the aggregate indemnifiable amount (but
not as to each occasion) exceeds Twelve Thousand Five Hundred Dollars (U.S.
$12,500).

                9.5 Nonexclusive. The rights, powers and remedies of the parties
under this Agreement are cumulative and not exclusive of any other right, power
or remedy which such parties may have under any other agreement or law. No
single or partial assertion or exercise of any right, power or remedy of a party
hereunder shall preclude any other further assertion or exercise thereof.

                9.6 Dispute Resolution. In the event of a dispute between the
parties with respect to any claim for indemnification under this Section 9
hereof, such dispute shall be submitted to mediation for resolution before an
impartial mediator experienced in commercial matters generally mutually
agreeable to the parties. The mediation shall be held in Seattle pursuant to
Washington law, the decision thereof shall be binding and enforceable in a court
of competent jurisdiction, and the costs thereof shall be awarded to the
substantially prevailing party.

        10. Termination. This Agreement may be terminated at any time prior to
the Closing Date by the mutual written consent of Seller and Purchaser or by the
nonbreaching party in the event of a material breach of a representation,
warranty or covenant, and may be terminated at the election of either party if
the Closing has not occurred prior to December 15, 2000; provided, however, that
the right to terminate this Agreement under this clause shall not be available
to the party whose failure to fulfill any obligation under this Agreement has
been the cause or resulted in the failure of the Closing to occur on or before
the date specified in Section 3.1.

        11. Notices. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered, or
deposited in the mail, postage prepaid, sent certified or registered, or
delivered to an overnight carrier or sent by facsimile and addressed as
respectively set forth below or to such other address as any party shall have
previously designated by such a notice. Any notice so delivered personally, by
U.S. Postal Service by overnight carrier or by facsimile shall be deemed to be
received on the date of delivery. Notices shall be sent as follows:

TO PURCHASER:                                   TO SELLER:

     Aptimus, Inc.                              XMarkstheSpot, Inc.
     95 South Jackson St., Suite 300            657 Mission St., Suite 200
     Seattle, Washington  98104                 San Francisco, California 94105
     Attention:  David H. Davis                 Attention:  Scott Rozic
     (tel) 206-441-9100x1499                    (tel) 415-896-2123x201
     (fax) 206-441-9661                         (fax) 415-896-2561

<PAGE>   26

     (email) daved@aptimus.com                  (email) srozic@xmarksthespot.com

        12. General.

                12.1 Amendment. The parties hereto may amend, modify or
supplement this Agreement at any time, but only in writing duly executed on
behalf of all parties hereto.

                12.2 Entire Understanding. The terms set forth in this Agreement
supersede all previous discussions, understandings and agreements between them
with respect to the subject matter hereof, including, without limitation, that
certain letter of intent by and between the Seller and Purchaser, dated October
31, 2000, and are intended by the parties as a final, complete and exclusive
expression of the terms of their agreement and may not be contradicted,
explained or supplemented by evidence of any prior agreement, any
contemporaneous oral agreement or any additional terms.

                12.3 Waivers. Any terms, covenants, representations, warranties
or agreements of any party hereto may be waived at any time by an instrument in
writing executed by the party for whose benefit such terms exist. The failure of
any party at any time or times to require performance of any provisions hereof
shall in no manner affect its right at a later time to enforce the same. No
waiver by any party of any condition or of any breach of any terms, covenants,
representations, warranties or agreements contained in this Agreement shall be
effective unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or any breach of any other
terms, covenants, representations, warranties or agreements.

                12.4 Headings. The headings preceding the text of the Sections
of this Agreement are for convenience only and shall not be deemed parts
thereof.

                12.5 Applicable Law. This Agreement, including all matters of
construction, validity and performance, shall be governed by and construed and
enforced in accordance with the laws of the State of Washington, as applied to
contracts executed and to be fully performed in such State by citizens of such
State. The federal and state courts situated in King County, Washington shall be
the exclusive forum for the litigation of any dispute relating to this
Agreement. Each party hereto hereby consents to the jurisdiction and venue of
such courts and waives any defense of inconvenient forum.

                12.6 Bulk Sales. Purchaser hereby waives compliance with the
Bulk Sales laws of the State of California and Seller agrees to indemnify and
hold harmless Purchaser from, and reimburse Purchaser for, any and all claims,
liabilities or obligations that Purchaser may suffer or incur by virtue of such
noncompliance.

                12.7 Parties in Interest; Assignment. All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and permitted assigns of the
parties hereto, whether herein so expressed or not. Purchaser may without the
consent of Seller assign its rights hereunder to any corporation controlling,
controlled by or under common control with Purchaser or any general or limited
partnership in which Purchaser is a general partner, but no such assignment
shall relieve Purchaser from liability for breach of any of its obligations
hereunder, including without

<PAGE>   27

limitation, its indemnity obligations set forth in Section 9 hereof. Neither
this Agreement nor any of the rights, interests or obligations hereunder of any
party hereto shall otherwise be assigned without the prior written consent of
the other parties.

                12.8 Publicity. Prior to the closing of this Agreement, neither
of the parties hereto shall make or issue, or cause to be made or issued, any
announcement or written statement concerning this Agreement or the transactions
contemplated hereby for dissemination to the general public without the prior
consent of the other party, unless Purchaser determines on the advice of
securities counsel that disclosure is required by applicable securities laws in
which event Purchaser will give Seller reasonable advance notice of such
disclosure.

                12.9 Attorneys' Fees. In the event of any action to enforce any
provision of this Agreement, or on account of any default under or breach of
this Agreement, the prevailing party in such action shall be entitled to
recover, in addition to all other relief, from the other party all reasonable
attorneys' fees and costs incurred by the prevailing party in connection with
such action (including, but not limited to, any appeal thereof).

                IN WITNESS WHEREOF, the parties hereto have entered into and
signed this Agreement as of the date and year first above written.

APTIMUS, INC.,                              XMARKSTHESPOT, INC.,
a Washington corporation                    a California corporation

By  /s/ TIMOTHY C. CHOATE                   By  /s/ SCOTT ROZIC
   ------------------------------------        ---------------------------------
   Timothy C. Choate, President & CEO          Scott Rozic, President & CEO

<PAGE>   28

<TABLE>
<CAPTION>
Exhibits
--------
<S>               <C>
C                 Stockholders Voting Agreement
3.2.1             Bill of Sale
7.2               Form of Seller's Certificate
7.4               Form of Seller's legal opinion
8.2               Form of Purchaser's Certificate
</TABLE>

<PAGE>   29

                                    EXHIBIT C

                          SHAREHOLDER VOTING AGREEMENT

        THIS SHAREHOLDER VOTING AGREEMENT ("Voting Agreement") is entered into
as of November ____, 2000, by and between Aptimus, Inc., a Washington
corporation ("Purchaser"), and ______________________ ("Shareholder").

                                    RECITALS

A. Purchaser and XMarkstheSpot, Inc., a California corporation (the "Company"),
are entering into an Asset Purchase Agreement of even date herewith (the
"Purchase Agreement"), which provides (subject to the conditions set forth
therein) for the purchase of substantially all of the assets and the assumption
of certain liabilities of Company by Purchaser (the "Acquisition").

B. In order to induce Purchaser to enter into the Purchase Agreement,
Shareholder is entering into this Voting Agreement.

                                    AGREEMENT

        The parties to this Voting Agreement, intending to be legally bound,
agree as follows:

SECTION 1. CERTAIN DEFINITIONS

                For purposes of this Voting Agreement:

                (a) "COMPANY COMMON STOCK" shall mean the common stock, no par
value per share, of the Company.

                (b) "COMPANY PREFERRED STOCK" shall mean the preferred stock, no
par value per share, of the Company.

                (c) "EXPIRATION DATE" shall mean the earlier of (i) the date
upon which the Purchase Agreement is validly terminated, or (ii) the date upon
which the Acquisition becomes effective.

                (d) Shareholder shall be deemed to "OWN" or to have acquired
"OWNERSHIP" of a security if Shareholder: (i) is the record owner of such
security; or (ii) is the "beneficial owner" (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such security.

                (e) "PERSON" shall mean any (i) individual, (ii) corporation,
limited liability company, partnership or other entity, or (iii) governmental
authority.

                (f) "SUBJECT SECURITIES" shall mean: (i) all securities of the
Company (including all shares of Company Common Stock and Company Preferred
Stock and all options, warrants and other rights to acquire shares of Company
Common Stock and Company Preferred Stock) Owned by Shareholder as of the date of
this Agreement; and (ii) all additional securities of the Company (including all
additional shares of Company Common Stock and Company Preferred Stock and all
additional options, warrants and other rights to acquire shares of Company
Common Stock and Company Preferred Stock) of which Shareholder acquires
Ownership during the period from the date of this Agreement through the
Expiration Date.

<PAGE>   30

                (g) A Person shall be deemed to have a effected a "TRANSFER" of
a security if such Person directly or indirectly: (i) sells, pledges, encumbers,
grants an option with respect to, transfers or disposes of such security or any
interest in such security; or (ii) enters into an agreement or commitment
contemplating the possible sale of, pledge of, encumbrance of, grant of an
option with respect to, transfer of or disposition of such security or any
interest therein.

SECTION 2. TRANSFER OF SUBJECT SECURITIES

        2.1 TRANSFEREE OF SUBJECT SECURITIES TO BE BOUND BY THIS AGREEMENT.
Shareholder agrees that, during the period from the date of this Voting
Agreement through the Expiration Date, Shareholder shall not cause or permit any
Transfer of any of the Subject Securities to be effected unless each Person to
which any of such Subject Securities, or any interest in any of such Subject
Securities, is or may be transferred shall have: (a) executed a counterpart of
this Voting Agreement and a proxy in the form attached hereto as Exhibit A (with
such modifications as Purchaser may reasonably request); and (b) agreed to hold
such Subject Securities (or interest in such Subject Securities) subject to all
of the terms and provisions of this Voting Agreement.

        2.2 TRANSFER OF VOTING RIGHTS. Shareholder agrees that, during the
period from the date of this Voting Agreement through the Expiration Date,
Shareholder shall ensure that: (a) none of the Subject Securities is deposited
into a voting trust; and (b) no proxy is granted, and no voting agreement or
similar agreement is entered into, with respect to any of the Subject
Securities.

SECTION 3. VOTING OF SHARES

        3.1 VOTING AGREEMENT. Shareholder agrees that, during the period from
the date of this Voting Agreement through the Expiration Date:

                (a) at any meeting of stockholders of the Company, however
        called, Shareholder shall (unless otherwise directed in writing by
        Purchaser) cause all outstanding shares of Company Common Stock and
        Company Preferred Stock that are Owned by Shareholder as of the record
        date fixed for such meeting to be voted in favor of the approval and
        adoption of the Purchase Agreement and the approval of the Acquisition,
        and in favor of each of the other actions contemplated by the Purchase
        Agreement; and

                (b) in the event written consents are solicited or otherwise
        sought from stockholders of the Company with respect to the approval or
        adoption of the Purchase Agreement, with respect to the approval of the
        Acquisition or with respect to any of the other actions contemplated by
        the Purchase Agreement, Shareholder shall (unless otherwise directed in
        writing by Purchaser) cause to be executed, with respect to all
        outstanding shares of Company Common Stock and Company Preferred Stock
        that are Owned by Shareholder as of the record date fixed for the
        consent to the proposed action, a written consent or written consents to
        such proposed action.

        3.2 PROXY; FURTHER ASSURANCES.

                (a) Contemporaneously with the execution of this Voting
Agreement: (i) Shareholder shall deliver to Purchaser a proxy in the form
attached to this Voting Agreement as Exhibit A, which shall be irrevocable to
the fullest extent permitted by law, with respect to the shares referred to
therein (the "Proxy"); and (ii) Shareholder shall cause to be delivered to
Purchaser an additional proxy (in the form attached hereto as Exhibit A)
executed on behalf of the record owner of any outstanding

<PAGE>   31

shares of Company Common Stock and Company Preferred Stock that are owned
beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act
of 1934), but not of record, by Shareholder.

                (b) Shareholder shall, at his own expense, perform such further
acts and execute such further documents and instruments as may reasonably be
required to vest in Purchaser the power to carry out and give effect to the
provisions of this Voting Agreement.

SECTION 4. WAIVER OF APPRAISAL RIGHTS

        Shareholder hereby irrevocably and unconditionally waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal, any
dissenters' rights and any similar rights relating to the Acquisition or any
related transaction that Shareholder or any other Person may have by virtue of
the ownership of any outstanding shares of Company Common Stock or Company
Preferred Stock Owned by Shareholder.

SECTION 5. NO SOLICITATION

        Shareholder agrees that, during the period from the date of this Voting
Agreement through the Expiration Date, Shareholder shall not, directly or
indirectly, and Shareholder shall ensure that his agents, employees, attorneys,
and any other Person working, directly or indirectly, for or on behalf of
Shareholder (together "Representatives") do not, directly or indirectly: (i)
solicit, initiate, encourage or induce the making, submission or announcement of
the acquisition of Company, any merger or consolidation with or involving
Company, or acquisition of any material portion of the capital stock or assets
of Company (an "Acquisition Transaction") or any proposal therefor, or take any
action that could reasonably be expected to lead to an Acquisition Transaction
or any proposal therefor; (ii) furnish any information regarding the Company to
any Person in connection with or in response to an Acquisition Transaction or a
proposal therefor or a potential Acquisition Transaction or proposal therefor;
or (iii) engage in discussions with any Person with respect to any Acquisition
Transaction or proposal therefor. Shareholder shall immediately cease and
discontinue, and Shareholder shall ensure that his Representatives immediately
cease and discontinue, any existing discussions with any Person (other than
Purchaser) that relate to any Acquisition Transaction or proposal therefor.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER

        Shareholder hereby represents and warrants to Purchaser as follows:

        6.1 AUTHORIZATION, ETC. Shareholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Voting
Agreement and the Proxy and to perform his or its obligations hereunder and
thereunder. This Voting Agreement and the Proxy have been duly executed and
delivered by Shareholder and constitute legal, valid and binding obligations of
Shareholder, enforceable against Shareholder in accordance with their terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.

        6.2 NO CONFLICTS OR CONSENTS

                (a) The execution and delivery of this Voting Agreement and the
Proxy by Shareholder do not, and the performance of this Voting Agreement and
the Proxy by Shareholder will not: (i) conflict with or violate any law, rule,
regulation, order, decree or judgment applicable to Shareholder or by which he
or it or any of his or its properties is or may be bound or affected; or (ii)
result in or constitute (with or without notice or lapse of time) any breach of
or default under, or give to

<PAGE>   32

any other Person (with or without notice or lapse of time) any right of
termination, amendment, acceleration or cancellation of, or result (with or
without notice or lapse of time) in the creation of any encumbrance or
restriction on any of the Subject Securities pursuant to, any contract to which
Shareholder is a party or by which Shareholder or any of his or its affiliates
or properties is or may be bound or affected.

                (b) The execution and delivery of this Voting Agreement and the
Proxy by Shareholder do not, and the performance of this Voting Agreement and
the Proxy by Shareholder will not, require any consent or approval of any
Person.

        6.3 TITLE TO SECURITIES. As of the date of this Voting Agreement: (a)
Shareholder holds of record (free and clear of any encumbrances or restrictions)
the number of outstanding shares of Company Common Stock and Company Preferred
Stock set forth under the heading "Shares Held of Record" on the signature page
hereof; (b) Shareholder holds (free and clear of any encumbrances or
restrictions) the options, warrants and other rights to acquire shares of
Company Common Stock and Company Preferred Stock set forth under the heading
"Options and Other Rights" on the signature page hereof; (c) Shareholder Owns
the additional securities of the Company set forth under the heading "Additional
Securities Beneficially Owned" on the signature page hereof; and (d) Shareholder
does not directly or indirectly Own any shares of capital stock or other
securities of the Company, or any option, warrant or other right to acquire (by
purchase, conversion or otherwise) any shares of capital stock or other
securities of the Company, other than the shares and options, warrants and other
rights set forth on the signature page hereof.

        6.4 ACCURACY OF REPRESENTATIONS. The representations and warranties
contained in this Voting Agreement are accurate in all respects as of the date
of this Voting Agreement, will be accurate in all respects at all times through
the Expiration Date and will be accurate in all respects as of the date of the
consummation of the Acquisition as if made on that date.

SECTION 7. ADDITIONAL COVENANTS OF SHAREHOLDER

        7.1 FURTHER ASSURANCES. From time to time and without additional
consideration, Shareholder shall (at Shareholder's sole expense) execute and
deliver, or cause to be executed and delivered, such additional transfers,
assignments, endorsements, proxies, consents and other instruments, and shall
(at Shareholder's sole expense) take such further actions, as Purchaser may
request for the purpose of carrying out and furthering the intent of this Voting
Agreement.

        7.2 LEGEND. Immediately after the execution of this Voting Agreement
(and from time to time upon the acquisition by Shareholder of Ownership of any
shares of Company Common Stock or Company Preferred Stock prior to the
Expiration Date), upon the written request of Purchaser, Shareholder shall
ensure that each certificate evidencing any outstanding shares of Company Common
Stock, Company Preferred Stock or other securities of the Company Owned by
Shareholder bears a legend in the following form:

        THE SECURITY OR SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
        SOLD, EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN
        COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE VOTING AGREEMENT DATED
        AS OF NOVEMBER _____, 2000, BETWEEN THE HOLDER HEREOF AND APTIMUS, INC.,
        AS IT MAY BE AMENDED, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
        EXECUTIVE OFFICES OF THE ISSUER.

SECTION 8. MISCELLANEOUS

<PAGE>   33

        8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and agreements made by Shareholder in
this Voting Agreement shall survive (i) the consummation of the Acquisition,
(ii) any termination of the Purchase Agreement, and (iii) the Expiration Date.

        8.2 INDEMNIFICATION. Shareholder shall hold harmless and indemnify
Purchaser and Purchaser's affiliates from and against, and shall compensate and
reimburse Purchaser and Purchaser's affiliates for, any loss, damage, claim,
liability, fee (including attorneys' fees), demand, cost or expense (regardless
of whether or not such loss, damage, claim, liability, fee, demand, cost or
expense relates to a third-party claim) that is directly or indirectly suffered
or incurred by Purchaser or any of Purchaser's affiliates, or to which Purchaser
or any of Purchaser's affiliates otherwise becomes subject, and that arises
directly or indirectly from, or relates directly or indirectly to, (a) any
inaccuracy in or breach of any representation or warranty contained in this
Voting Agreement, or (b) any failure on the part of Shareholder to observe,
perform or abide by, or any other breach of, any restriction, covenant,
obligation or other provision contained in this Voting Agreement or in the
Proxy.

        8.3 EXPENSES. All costs and expenses incurred in connection with the
transactions contemplated by this Voting Agreement shall be paid by the party
incurring such costs and expenses.

        8.4 NOTICES. Any notice or other communication required or permitted to
be delivered to either party under this Voting Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other party):

                if to Shareholder:

                     at the address set forth below Shareholder's signature on
                     the signature page hereof

                if to Purchaser:

                     Aptimus, Inc.
                     95 South Jackson St., Suite 300
                     Seattle, WA 98104
                     Attn: General Counsel
                     Fax: (206)441-9100x1499

        8.5 SEVERABILITY. If any provision of this Voting Agreement or any part
of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Voting Agreement. Each
provision of this Voting Agreement is separable from every other provision of
this Voting Agreement, and each part of each provision of this Voting Agreement
is separable from every other part of such provision.

<PAGE>   34

        8.6 ENTIRE AGREEMENT. This Voting Agreement, the Proxy and any other
documents delivered by the parties in connection herewith constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings between the
parties with respect thereto. No addition to or modification of any provision of
this Voting Agreement shall be binding upon either party unless made in writing
and signed by both parties.

        8.7 ASSIGNMENT; BINDING EFFECT. Except as provided herein, neither this
Voting Agreement nor any of the interests or obligations hereunder may be
assigned or delegated by Shareholder and any attempted or purported assignment
or delegation of any of such interests or obligations shall be void. Subject to
the preceding sentence, this Voting Agreement shall be binding upon Shareholder
and his heirs, estate, executors, personal representatives, successors and
assigns, and shall inure to the benefit of Purchaser and its successors and
assigns. Without limiting any of the restrictions set forth in Section 2 or
elsewhere in this Voting Agreement, this Voting Agreement shall be binding upon
any Person to whom any Subject Securities are transferred. Nothing in this
Voting Agreement is intended to confer on any Person (other than Purchaser and
its successors and assigns) any rights or remedies of any nature.

        8.8 SPECIFIC PERFORMANCE. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Voting Agreement or
the Proxy was not performed in accordance with its specific terms or was
otherwise breached. Shareholder agrees that, in the event of any breach or
threatened breach by Shareholder of any covenant or obligation contained in this
Voting Agreement or in the Proxy, Purchaser shall be entitled (in addition to
any other remedy that may be available to it, including monetary damages) to
seek and obtain (a) a decree or order of specific performance to enforce the
observance and performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. Shareholder further agrees that
neither Purchaser nor any other Person shall be required to obtain, furnish or
post any bond or similar instrument in connection with or as a condition to
obtaining any remedy referred to in this Section 8.8, and Shareholder
irrevocably waives any right he may have to require the obtaining, furnishing or
posting of any such bond or similar instrument.

        8.9 NON-EXCLUSIVITY. The rights and remedies of Purchaser under this
Voting Agreement are not exclusive of or limited by any other rights or remedies
which it may have, whether at law, in equity, by contract or otherwise, all of
which shall be cumulative (and not alternative). Without limiting the generality
of the foregoing, the rights and remedies of Purchaser under this Voting
Agreement, and the obligations and liabilities of Shareholder under this Voting
Agreement, are in addition to their respective rights, remedies, obligations and
liabilities under common law requirements and under all applicable statutes,
rules and regulations.

        8.10 GOVERNING LAW; VENUE.

                (a) This Voting Agreement and the Proxy shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Washington (without giving effect to principles of conflicts of laws).

                (b) Any legal action or other legal proceeding relating to this
Voting Agreement or the Proxy or the enforcement of any provision of this Voting
Agreement or the Proxy may be brought or otherwise commenced in any state or
federal court located in King County, Washington. Shareholder:

                (i) expressly and irrevocably consents and submits to the
        jurisdiction of each state and federal court located in King County,
        Washington (and each appellate court located in the State of
        Washington), in connection with any such legal proceeding;

<PAGE>   35

                (ii) agrees that service of any process, summons, notice or
        document by U.S. mail addressed to him at the address set forth in
        Section 8.4 shall constitute effective service of such process, summons,
        notice or document for purposes of any such legal proceeding;

                (iii) agrees that each state and federal court located in King
        County, Washington, shall be deemed to be a convenient forum; and

                (iv) agrees not to assert (by way of motion, as a defense or
        otherwise), in any such legal proceeding commenced in any state or
        federal court located in King County, Washington, any claim that
        Shareholder is not subject personally to the jurisdiction of such court,
        that such legal proceeding has been brought in an inconvenient forum,
        that the venue of such proceeding is improper or that this Voting
        Agreement or the subject matter of this Voting Agreement may not be
        enforced in or by such court.

Nothing contained in this Section 8.10 shall be deemed to limit or otherwise
affect the right of Purchaser to commence any legal proceeding or otherwise
proceed against Shareholder in any other forum or jurisdiction.

                (c) SHAREHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS VOTING AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.

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

        8.12 CAPTIONS. The captions contained in this Voting Agreement are for
convenience of reference only, shall not be deemed to be a part of this Voting
Agreement and shall not be referred to in connection with the construction or
interpretation of this Voting Agreement.

        8.13 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Voting Agreement or the enforcement of any provision of this
Voting Agreement is brought against Shareholder, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).

        8.14 WAIVER. No failure on the part of Purchaser to exercise any power,
right, privilege or remedy under this Voting Agreement, and no delay on the part
of Purchaser in exercising any power, right, privilege or remedy under this
Voting Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right, privilege or
remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. Purchaser shall not be deemed to have waived
any claim available to Purchaser arising out of this Voting Agreement, or any
power, right, privilege or remedy of Purchaser under this Voting Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly
set forth in a written instrument duly executed and delivered on behalf of
Purchaser; and any such waiver shall not be applicable or have any effect except
in the specific instance in which it is given.

        8.15 CONSTRUCTION.

                (a) For purposes of this Voting Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine

<PAGE>   36

and neuter genders; the feminine gender shall include the masculine and neuter
genders; and the neuter gender shall include masculine and feminine genders.

                (b) The parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Voting Agreement.

                (c) As used in this Voting Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."

                (d) Except as otherwise indicated, all references in this Voting
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Voting Agreement and Exhibits to this Voting Agreement.

        IN WITNESS WHEREOF, Purchaser and Shareholder have caused this Voting
Agreement to be executed as of the date first written above.

                                            APTIMUS, INC.

                                            By:
                                               ---------------------------------
                                               Timothy C. Choate,
                                               President and CEO

                                            SHAREHOLDER (NATURAL PERSONS):

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

                                            Name:
                                                 -------------------------------

                                            Address:
                                                    ----------------------------

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

                                            Facsimile:
                                                      --------------------------

                                            SHAREHOLDER (ENTITIES):

                                            Name of Shareholder:

                                            By:
                                               ---------------------------------

                                            Name:
                                                 -------------------------------

                                            Title:
                                                  ------------------------------

                                            Address:
                                                    ----------------------------

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

                                            Facsimile:
                                                      --------------------------

<PAGE>   37

<TABLE>
<CAPTION>
Shares Held of Record      Options and Other Rights      Additional Securities Beneficially Owned
---------------------      ------------------------      ----------------------------------------
<S>                        <C>                           <C>

</TABLE>

<PAGE>   38

                                    EXHIBIT A

                            FORM OF IRREVOCABLE PROXY

        The undersigned Shareholder of XMarkstheSpot, Inc., a California
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Timothy C. Choate, John Wade, David H. Davis,
Aptimus, Inc., a Washington corporation ("Purchaser"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
(i) the outstanding shares of capital stock of the Company owned of record by
the undersigned as of the date of this proxy, which shares are specified on the
final page of this proxy, and (ii) any and all other shares of capital stock of
the Company which the undersigned may acquire on or after the date hereof. (The
shares of the capital stock of the Company referred to in clauses "(i)" and
"(ii)" of the immediately preceding sentence are collectively referred to as the
"Shares.") Upon the execution hereof, all prior proxies given by the undersigned
with respect to any of the Shares are hereby revoked, and the undersigned agrees
that no subsequent proxies will be given with respect to any of the Shares.

        This proxy is irrevocable, is coupled with an interest and is granted in
connection with the Voting Agreement, dated as of the date hereof, between
Purchaser and the undersigned (the "Voting Agreement"), and is granted in
consideration of Purchaser entering into the Asset Purchase Agreement, dated as
of the date hereof, among Purchaser and Company (the "Purchase Agreement").

        The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Purchase Agreement or the effective date of the
acquisition contemplated thereby (the "Acquisition") at any meeting of the
Shareholders of the Company, however called, or in connection with any
solicitation of written consents from stockholders of the Company, in favor of
the approval and adoption of the Purchase Agreement and the approval of the
Acquisition, and in favor of each of the other actions contemplated by the
Purchase Agreement.

        The undersigned may vote the Shares on all other matters.

        This proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the undersigned (including any
transferee of any of the Shares).

        If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
proxy. Each provision of this proxy is separable from every other provision of
this proxy, and each part of each provision of this proxy is separable from
every other part of such provision.

                                      A-1
<PAGE>   39

        This proxy shall terminate upon the earlier of the valid termination of
the Purchase Agreement or the effective date of the Acquisition.

Dated:  November ______, 2000.

                                            SHAREHOLDER (NATURAL PERSONS):

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

                                            Name:
                                                 -------------------------------

                                            SHAREHOLDER (ENTITIES):

                                            Name of Shareholder:
                                                                ----------------

                                            By:
                                               ---------------------------------

                                            Name:
                                                 -------------------------------

                                            Title:
                                                  ------------------------------

                                            Number of shares of common stock of
                                            the Company owned of record as of
                                            the date of this proxy:

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

                                            Number of shares of preferred stock
                                            of the Company owned of record as of
                                            the date of this proxy:

                                            ------------------------------------
<PAGE>   40

                                  Exhibit 3.2.1

                                  BILL OF SALE

        Pursuant to the Closing of that certain Asset Purchase Agreement, dated
as of November 22, 2000 (the "Agreement"), by and among XMarkstheSpot, Inc.
("Seller") and Aptimus, Inc. ("Purchaser"), Seller does hereby sell, assign and
transfer unto Purchaser all right, title and interest in and to the Purchased
Assets, as that term is defined in the Agreement.

        Seller hereby constitutes and appoints Purchaser as Seller's true and
lawful attorney and attorneys, with full power of substitution in Seller's name,
place and stead, on behalf and for the benefit of Purchaser, its successors and
assigns, to demand and receive any and all of the Purchased Assets, and to give
receipts and releases for and in respect of the same, and any part thereof, and
from to time to institute and prosecute in Purchaser's name, or otherwise, for
the benefit of Purchaser, its successors and assigns, any and all proceedings at
law, in equity or otherwise, which Purchaser may deem proper in order to collect
or reduce to its possession any of the Purchased Assets, and to do all acts and
things relating to the Purchased Assets which Purchaser shall deem desirable,
Seller hereby declaring that the foregoing powers are coupled with an interest
and are and shall be irrevocable by Seller and shall not be affected by its
dissolution or in any manner or for any reason whatsoever.

        IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed
as of this ___ day of __________ 2000.

                                            XMarkstheSpot, Inc.

                                            By:
                                               ---------------------------------
                                               Scott Rozic, President & CEO

<PAGE>   41

                                   Exhibit 7.2

                          FORM OF SELLER'S CERTIFICATE

        The undersigned, Scott Rozic, does hereby certify that:

        1. I am the duly elected and acting President of XMarkstheSpot, Inc.
("XMTS"), a party to that certain Asset Purchase Agreement, dated as of November
22, 2000, by and among XMTS and Aptimus, Inc. (the "Agreement"), and I am
authorized by XMTS to execute and deliver this Certificate pursuant to Section
7.2 of the Agreement.

        2. The representations and warranties of XMTS contained in the Agreement
are true and correct as of the date hereof as though such representations and
warranties are made on the date hereof.

        3. XMTS has performed and complied with all of the obligations,
agreements, covenants and conditions contained in the Agreement to be performed
or complied with by XMTS on or prior to the date hereof.

        Dated: November _________ , 2000.

                                            XMARKSTHESPOT, INC.

                                            ------------------------------------
                                            Scott Rozic, President & CEO

<PAGE>   42

                                   Exhibit 8.2

                         FORM OF PURCHASER'S CERTIFICATE

        The undersigned, Timothy C. Choate, does hereby certify that:

        1. I am the President of Aptimus, Inc. ("Purchase"), a party to that
certain Asset Purchase Agreement dated as of November 22, 2000, by and among
Purchaser and XMarkstheSpot, Inc. (the "Agreement"), and I am authorized by
Purchaser to execute and deliver this Certificate pursuant to Section 8.2 of the
Agreement.

        2. The representations and warranties of Purchaser contained in the
Agreement are true and correct as of the date hereof as though such
representations and warranties are made on the date hereof.

        3. Purchaser has performed and complied with all of the obligations,
agreements, covenants and conditions contained in the Agreement to be performed
or complied with by Purchaser on or prior to the date hereof.

        Dated: November ____________, 2000.

                                            APTIMUS, INC.

                                            ------------------------------------
                                            Timothy C. Choate, President & CEOExhibit 4.1

<PAGE>

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
                                    Depositor

                            UNION PLANTERS PMAC, Inc.
                                 Master Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                            Dated as of March 1, 2001
                    -----------------------------------------

                       Mortgage Pass-Through Certificates

                                 Series 2001-UP1

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS
                                                 -----------------

         SECTION                                                                                               PAGE
         -------                                                                                               ----
<S>                                                                                                            <C>
                                                     ARTICLE I

                                                    DEFINITIONS
         SECTION 1.01.     Defined Terms..........................................................................3
                  Advancing Person................................................................................3
                  Adjustment Date.................................................................................3
                  Affiliate.......................................................................................3
                  Agreement.......................................................................................3
                  Assignment......................................................................................3
                  Available Distribution Amount...................................................................3
                  Bankruptcy Code.................................................................................3
                  Bankruptcy Loss.................................................................................3
                  Book-Entry Certificate..........................................................................3
                  Book-Entry Custodian............................................................................4
                  Business Day....................................................................................4
                  Cash-out Refinancing............................................................................4
                  Certificate.....................................................................................4
                  Certificate Factor..............................................................................4
                  Certificateholder" or "Holder...................................................................4
                  Certificate Owner...............................................................................4
                  Certificate Principal Balance...................................................................4
                  Certificate Register............................................................................5
                  Class    .......................................................................................5
                  Class A Certificate.............................................................................5
                  Class AF-1 Certificate..........................................................................5
                  Class AF-2 Certificate..........................................................................5
                  Class AV-1 Certificate..........................................................................5
                  Class AV-2 Certificate..........................................................................5
                  Class B Percentage..............................................................................5
                  Class BF-1 Certificate..........................................................................6
                  Class BF-1 Percentage...........................................................................6
                  Class BF-2 Certificate..........................................................................6
                  Class BF-2 Percentage...........................................................................6
                  Class BF-3 Certificate..........................................................................6
                  Class BF-3 Percentage...........................................................................6
                  Class BF-4 Certificate..........................................................................6
                  Class BF-4 Percentage...........................................................................6
                  Class BF-5 Certificate..........................................................................7
                  Class BF-5 Percentage...........................................................................7
                  Class BF-6 Certificate..........................................................................7
                  Class BF-6 Percentage...........................................................................7
                  Class BV-1 Certificate..........................................................................7

                                        i

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  Class BV-1 Percentage...........................................................................7
                  Class BV-2 Certificate..........................................................................8
                  Class BV-2 Percentage...........................................................................8
                  Class BV-3 Certificate..........................................................................8
                  Class BV-3 Percentage...........................................................................8
                  Class BV-4 Certificate..........................................................................8
                  Class BV-4 Percentage...........................................................................8
                  Class BV-5 Certificate..........................................................................8
                  Class BV-5 Percentage...........................................................................8
                  Class BV-6 Certificate..........................................................................9
                  Class BV-6 Percentage...........................................................................9
                  Class IO Certificate............................................................................9
                  Class IO Mortgage Loan..........................................................................9
                  Class PO Certificate............................................................................9
                  Class PO Mortgage Loan..........................................................................9
                  Class PO Percentage.............................................................................9
                  Class PO Principal Distribution Amount..........................................................9
                  Class R-I Certificate..........................................................................11
                  Class R-II Certificate.........................................................................11
                  Closing Date...................................................................................11
                  Code     ......................................................................................11
                  Collection Account.............................................................................11
                  Commission.....................................................................................11
                  Corporate Trust Office.........................................................................11
                  Cut-off Date...................................................................................11
                  Debt Service Reduction.........................................................................12
                  Deficient Valuation............................................................................12
                  Definitive Certificates........................................................................12
                  Deleted Mortgage Loan..........................................................................12
                  Depositor......................................................................................12
                  Depository.....................................................................................12
                  Depository Institution.........................................................................12
                  Depository Participant.........................................................................12
                  Determination Date.............................................................................12
                  Directly Operate...............................................................................12
                  Disqualified Organization......................................................................13
                  Distribution Account...........................................................................13
                  Distribution Date..............................................................................13
                  DOL      ......................................................................................13
                  DOL Regulations................................................................................13
                  Due Date ......................................................................................13
                  Due Period.....................................................................................14
                  Eligible Account...............................................................................14
                  ERISA    ......................................................................................14

                                       ii

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  ERISA Qualifiying Underwriting.................................................................14
                  Estate in Real Property........................................................................14
                  Excess Bankruptcy Loss.........................................................................14
                  Excess Fraud Loss..............................................................................14
                  Excess Loss....................................................................................14
                  Excess Special Hazard Loss.....................................................................14
                  Extraordinary Loss.............................................................................14
                  Extraordinary Trust Fund Expenses..............................................................15
                  Fannie Mae.....................................................................................15
                  FDIC     ......................................................................................15
                  Final Recovery Determination...................................................................15
                  Fitch    ......................................................................................15
                  Fraud Loss.....................................................................................15
                  Freddie Mac....................................................................................15
                  Gross Margin...................................................................................15
                  Group I-A Available Distribution Amount........................................................16
                  Group I-A Mortgage Loan........................................................................16
                  Group I-A Senior Percentage....................................................................16
                  Group I-A Subordinate Percentage...............................................................17
                  Group I-B Available Distribution Amount........................................................17
                  Group I-B Mortgage Loan........................................................................18
                  Group I-B Senior Percentage....................................................................18
                  Group I-B Subordinate Percentage...............................................................18
                  Group II-A Available Distribution Amount.......................................................18
                  Group II-A Mortgage Loan.......................................................................19
                  Group II-A Senior Percentage...................................................................19
                  Group II-A Subordinate Percentage..............................................................20
                  Group II-B Available Distribution Amount.......................................................20
                  Group II-B Mortgage Loan.......................................................................20
                  Group II-B Senior Percentage...................................................................20
                  Group II-B Subordinate Percentage..............................................................21
                  Group I Bankruptcy Amount......................................................................21
                  Group I Certificates...........................................................................21
                  Group I Class A Principal Adjustment Amount....................................................21
                  Group I Cross-Collateralization Date...........................................................21
                  Group I Diverted Interest Amount...............................................................21
                  Group I Fraud Loss Amount......................................................................22
                  Group I Mortgage Loans.........................................................................22
                  Group I Overcollateralized Amount..............................................................22
                  Group I Overcollateralized Sub-Group...........................................................22
                  Group I Senior Certificates....................................................................22
                  Group I Senior Interest Distribution Amount....................................................22
                  Group I Senior Percentage......................................................................22
                  Group I Senior Prepayment Percentage...........................................................22

                                       iii

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  Group I Senior Principal Distribution Amount...................................................24
                  Group I Special Hazard Amount..................................................................25
                  Group I Subordinate Certificate................................................................25
                  Group I Subordinate Percentage.................................................................26
                  Group I Subordinate Prepayment Percentage......................................................26
                  Group I Subordinate Principal Distribution Amount..............................................26
                  Group I Undercollateralized Amount.............................................................27
                  Group I Undercollateralized Sub-Group..........................................................28
                  Group II Bankruptcy Amount.....................................................................28
                  Group II Certificates..........................................................................28
                  Group II Class A Principal Adjustment Amount...................................................28
                  Group II Cross-Collateralization Date..........................................................28
                  Group II Diverted Interest Amount..............................................................28
                  Group II Fraud Loss Amount.....................................................................28
                  Group II Mortgage Loan.........................................................................28
                  Group II Overcollateralized Amount.............................................................28
                  Group II Overcollateralized Sub-Group..........................................................29
                  Group II Prepayment Crosscollateralization Date................................................29
                  Group II Senior Certificates...................................................................29
                  Group II Senior Percentage.....................................................................29
                  Group II Senior Prepayment Percentage..........................................................29
                  Group II Senior Principal Distribution Amount..................................................30
                  Group II Special Hazard Amount.................................................................32
                  Group II Subordinate Certificate...............................................................32
                  Group II Subordinate Percentage................................................................32
                  Group II Subordinate Prepayment Percentage.....................................................32
                  Group II Subordinate Principal Distribution Amount.............................................32
                  Group II Undercollateralized Amount............................................................34
                  Group II Undercollateralized Sub-Group.........................................................34
                  Independent....................................................................................34
                  Independent Contractor.........................................................................34
                  Index    ......................................................................................35
                  Initial Rate Cap...............................................................................35
                  Insurance Proceeds.............................................................................35
                  Interest Accrual Period........................................................................35
                  Interest Distribution Amount...................................................................35
                  Late Collections...............................................................................36
                  Liquidation Event..............................................................................36
                  Liquidation Proceeds...........................................................................36
                  Loan Group.....................................................................................36
                  Loan Group I-A.................................................................................36
                  Loan Group I-B.................................................................................36
                  Loan Group II-A................................................................................36
                  Loan Group II-B................................................................................36

                                       iv

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  Loan-to-Value Ratio............................................................................37
                  Master Servicer................................................................................37
                  Master Servicer Event of Default...............................................................37
                  Master Servicer Remittance Date................................................................37
                  Maximum Mortgage Rate..........................................................................37
                  Minimum Mortgage Rate..........................................................................37
                  Monthly Payment................................................................................37
                  Mortgage ......................................................................................37
                  Mortgage File..................................................................................37
                  Mortgage Loan..................................................................................37
                  Mortgage Loan Purchase Agreement...............................................................37
                  Mortgage Loan Remittance Rate..................................................................38
                  Mortgage Loan Schedule.........................................................................38
                  Mortgage Note..................................................................................39
                  Mortgage Pool..................................................................................40
                  Mortgage Rate..................................................................................40
                  Mortgaged Property.............................................................................40
                  Mortgagor......................................................................................40
                  Net Mortgage Rate..............................................................................40
                  New Lease......................................................................................40
                  Non-Class PO Percentage........................................................................40
                  Nonrecoverable P&I Advance"....................................................................41
                  Non-United States Person.......................................................................41
                  Notional Amount................................................................................41
                  Officers' Certificate..........................................................................41
                  Opinion of Counsel.............................................................................41
                  Original Group I Mortgage Loan.................................................................41
                  Original Group II Mortgage Loan................................................................41
                  Original Mortgage Loan.........................................................................41
                  Ownership Interest.............................................................................41
                  Pass-Through Rate..............................................................................41
                  Periodic Rate Cap..............................................................................42
                  Percentage Interest............................................................................42
                  Permitted Investments..........................................................................42
                  Permitted Transferee...........................................................................43
                  Person   ......................................................................................43
                  P&I Advance....................................................................................43
                  Plan     ......................................................................................43
                  Prepayment Assumption..........................................................................43
                  Prepayment Interest Shortfall..................................................................44
                  Prepayment Period..............................................................................44
                  Primary Mortgage Insurance Policy..............................................................44
                  Principal Prepayment...........................................................................44
                  Purchase Price.................................................................................44

                                        v

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  Qualified Insurer..............................................................................45
                  Qualified Substitute Mortgage Loan.............................................................45
                  Rate/Term Refinancing..........................................................................46
                  Rating Agency..................................................................................46
                  Realized Loss..................................................................................46
                  Record Date....................................................................................47
                  Refinanced Mortgage Loan.......................................................................47
                  Regular Certificate............................................................................47
                  Regular Interest...............................................................................47
                  Relief Act.....................................................................................47
                  Relief Act Interest Shortfall..................................................................47
                  REMIC    ......................................................................................47
                  REMIC I  ......................................................................................47
                  REMIC II ......................................................................................48
                  REMIC Provisions...............................................................................48
                  Remittance Report..............................................................................48
                  Rents from Real Property.......................................................................48
                  REO Account....................................................................................48
                  REO Disposition................................................................................48
                  REO Imputed Interest...........................................................................49
                  REO Principal Amortization.....................................................................49
                  REO Property...................................................................................49
                  Request for Release............................................................................49
                  Residential Dwelling...........................................................................49
                  Residual Certificate...........................................................................49
                  Residual Interest..............................................................................49
                  Responsible Officer............................................................................49
                  Scheduled Principal Balance....................................................................50
                  Seller   ......................................................................................50
                  Servicing Account..............................................................................50
                  Servicing Advances.............................................................................50
                  Servicing Fee..................................................................................51
                  Servicing Fee Rate.............................................................................51
                  Servicing Officer..............................................................................51
                  Single Certificate.............................................................................51
                  Special Hazard Loss............................................................................51
                  S&P      ......................................................................................52
                  Startup Day....................................................................................52
                  Stated Principal Balance.......................................................................52
                  Stayed Funds...................................................................................52
                  Stripped Interest Rate.........................................................................53
                  Subordinate Certificate........................................................................53
                  Sub-Group......................................................................................53
                  Sub-Group I-A..................................................................................53

                                       vi

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                  Sub-Group I-B..................................................................................53
                  Sub-Group II-A.................................................................................53
                  Sub-Group II-B.................................................................................53
                  Sub-Servicer...................................................................................53
                  Sub-Servicing Account..........................................................................53
                  Sub-Servicing Agreement........................................................................53
                  Tax Returns....................................................................................53
                  Termination Price..............................................................................54
                  Transfer ......................................................................................54
                  Transferee.....................................................................................54
                  Transferor.....................................................................................54
                  Trigger Amount.................................................................................54
                  Trust Fund.....................................................................................54
                  Trustee  ......................................................................................54
                  Trustee Fee....................................................................................54
                  Uninsured Cause................................................................................54
                  United States Person...........................................................................55
                  Value    ......................................................................................55
                  Voting Rights..................................................................................55
                  Weighted Average Net Mortgage Rate.............................................................55
                  Weighted Average Stripped Interest Rate........................................................55
         SECTION 1.02.     Allocation of Certain Interest Shortfalls.............................................55

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES
         SECTION 2.01.     Conveyance of Mortgage Loans..........................................................57
         SECTION 2.02.     Acceptance of the Trust Fund by the Trustee...........................................60
         SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller............................61
         SECTION 2.04.     [Reserved]............................................................................63
         SECTION 2.05.     Representations, Warranties and Covenants of the Master
                           Servicer..............................................................................64
         SECTION 2.06.     Issuance of the Certificates..........................................................65

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS
         SECTION 3.01.     Master Servicer to Act as Master Servicer.............................................66
         SECTION 3.02.     Sub-Servicing Agreements Between the Master Servicer and
                           Sub-Servicers.........................................................................67
         SECTION 3.03.     Successor Sub-Servicers...............................................................68
         SECTION 3.04.     Liability of the Master Servicer......................................................69

                                       vii

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

         SECTION 3.05.     No Contractual Relationship Between Sub-Servicers and
                           Trustee or Certificateholders.........................................................69
         SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by
                           Trustee...............................................................................69
         SECTION 3.07.     Collection of Certain Mortgage Loan Payments..........................................70
         SECTION 3.08.     Sub-Servicing Accounts................................................................70
         SECTION 3.09.     Collection of Taxes, Assessments and Similar Items;
                           Servicing Accounts....................................................................71
         SECTION 3.10.     Collection Account and Distribution Account...........................................72
         SECTION 3.11.     Withdrawals from the Collection Account and
                                    Distribution Account.........................................................74
         SECTION 3.12.     Investment of Funds in the Collection Account and the
                           Distribution Account..................................................................76
         SECTION 3.13.     Maintenance of the Primary Mortgage Insurance Policies;
                           Collections Thereunder................................................................77
         SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions
                           and Fidelity Coverage.................................................................78
         SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption
                           Agreements............................................................................80
         SECTION 3.16.     Realization Upon Defaulted Mortgage Loans.............................................81
         SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files.......................................83
         SECTION 3.18.     Servicing Compensation................................................................84
         SECTION 3.19.     Reports to the Trustee; Collection Account Statements.................................84
         SECTION 3.20.     Statement as to Compliance............................................................85
         SECTION 3.21.     Independent Public Accountants' Servicing Report......................................85
         SECTION 3.22.     Access to Certain Documentation.......................................................85
         SECTION 3.23.     Title, Management and Disposition of REO Property.....................................86
         SECTION 3.24.     Obligations of the Master Servicer in Respect of Prepayment
                           Interest Shortfalls...................................................................89
         SECTION 3.25.     Obligations of the Master Servicer in Respect of Monthly
                           Payments..............................................................................89
         SECTION 3.26.     Advance Facility......................................................................89

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS
         SECTION 4.01.     Distributions.........................................................................91
         SECTION 4.02.     Statements to Certificateholders......................................................97
         SECTION 4.03.     Remittance Reports; P&I Advances.....................................................100
         SECTION 4.04.     Allocation of Extraordinary Trust Fund Expenses and
                           Realized Losses......................................................................101
         SECTION 4.05.     Compliance with Withholding Requirements.............................................103
         SECTION 4.06.     [Reserved]...........................................................................103
         SECTION 4.07.     Commission Reporting.................................................................103

                                      viii

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                                                     ARTICLE V

                                                 THE CERTIFICATES
         SECTION 5.01.     The Certificates.....................................................................105
         SECTION 5.02.     Registration of Transfer and Exchange of Certificates................................107
         SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates....................................111
         SECTION 5.04.     Persons Deemed Owners................................................................111
         SECTION 5.05.     Certain Available Information........................................................111

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER
         SECTION 6.01.     Liability of the Depositor and the Master Servicer...................................113
         SECTION 6.02.     Merger or Consolidation of the Depositor or the Master
                           Servicer.............................................................................113
         SECTION 6.03.     Limitation on Liability of the Depositor, the Master Servicer
                           and Others...........................................................................113
         SECTION 6.04.     Limitation on Resignation of the Master Servicer.....................................114
         SECTION 6.05.     Rights of the Depositor in Respect of the Master Servicer............................115

                                                    ARTICLE VII

                                                      DEFAULT
         SECTION 7.01.     Master Servicer Events of Default....................................................116
         SECTION 7.02.     Trustee to Act; Appointment of Successor.............................................118
         SECTION 7.03.     Notification to Certificateholders...................................................119
         SECTION 7.04.     Waiver of Master Servicer Events of Default..........................................120

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE
         SECTION 8.01.     Duties of Trustee....................................................................121
         SECTION 8.02.     Certain Matters Affecting the Trustee................................................122
         SECTION 8.03.     Trustee not Liable for Certificates or Mortgage Loans................................123
         SECTION 8.05.     Trustee's Fees and Expenses..........................................................123
         SECTION 8.06.     Eligibility Requirements for Trustee.................................................124
         SECTION 8.07.     Resignation and Removal of the Trustee...............................................124
         SECTION 8.08.     Successor Trustee....................................................................125
         SECTION 8.09.     Merger or Consolidation of Trustee...................................................126
         SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee........................................126
         SECTION 8.11.     [intentionally omitted]..............................................................127
         SECTION 8.12.     Appointment of Office or Agency......................................................127
         SECTION 8.13.     Representations and Warranties.......................................................127

                                       ix

<PAGE>

         SECTION                                                                                               PAGE
         -------                                                                                               ----

                                                    ARTICLE IX

                                                    TERMINATION
         SECTION 9.01      Termination Upon Repurchase or Liquidation of the Trust
                           Fund.................................................................................129
         SECTION 9.02      Additional Termination Requirements..................................................131

                                                     ARTICLE X

                                                 REMIC PROVISIONS
         SECTION 10.01.             REMIC Administration........................................................133
         SECTION 10.02.             Prohibited Transactions and Activities......................................135
         SECTION 10.03.             Master Servicer and Trustee Indemnification.................................136

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
         SECTION 11.01.             Amendment...................................................................137
         SECTION 11.02.             Recordation of Agreement; Counterparts......................................138
         SECTION 11.03.             Limitation on Rights of Certificateholders..................................138
         SECTION 11.04.             Governing Law...............................................................139
         SECTION 11.05.             Notices.....................................................................139
         SECTION 11.06.             Severability of Provisions..................................................140
         SECTION 11.07.             Notice to Rating Agency.....................................................140
         SECTION 11.08.             Article and Section References..............................................141
         SECTION 11.09.             Grant of Security Interest..................................................141
</TABLE>

                                        x

<PAGE>

<TABLE>
<CAPTION>
         Exhibits
         --------
<S>                        <C>
         Exhibit A-1       Form of Class AF-1 Certificate
         Exhibit A-2       Form of Class AF-2 Certificate
         Exhibit A-3       Form of Class AV-1 Certificate
         Exhibit A-4       Form of Class AV-2 Certificate
         Exhibit A-5       Form of Class IO Certificate
         Exhibit A-6       Form of Class PO Certificate
         Exhibit A-7       Form of Class BF-1 Certificate
         Exhibit A-8       Form of Class BF-2 Certificate
         Exhibit A-9       Form of Class BF-3 Certificate
         Exhibit A-10      Form of Class BF-4 Certificate
         Exhibit A-11      Form of Class BF-5 Certificate
         Exhibit A-12      Form of Class BF-6 Certificate
         Exhibit A-13      Form of Class BV-1 Certificate
         Exhibit A-14      Form of Class BV-2 Certificate
         Exhibit A-15      Form of Class BV-3 Certificate
         Exhibit A-16      Form of Class BV-4 Certificate
         Exhibit A-17      Form of Class BV-5 Certificate
         Exhibit A-18      Form of Class BV-6 Certificate
         Exhibit A-19      Form of Class R-I Certificate
         Exhibit A-20      Form of Class R-II Certificate
         Exhibit B         [Reserved]
         Exhibit C-1       Form of Trustee's Initial Certification
         Exhibit C-2       Form of Trustee's Final Certification
         Exhibit C-3       Form of Receipt of Mortgage Note
         Exhibit D         Form of Mortgage Loan Purchase Agreement
         Exhibit E         Request for Release
         Exhibit F-1       Form of Transferor Representation Letter and Form of Transferee
                           Representation Letter in Connection with Transfer of Class IO Certificates,
                           Class PO Certificates, Subordinate Certificates and Residual Certificates
                           Pursuant to Rule 144A Under the 1933 Act
         Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
                           in Connection with Transfer of Residual Certificates
         Exhibit G         Form of Certification with respect to ERISA and the Code
         Schedule 1        Mortgage Loan Schedule
         Schedule 2        Mortgage Loan Schedule with respect to Mortgage Loans with
                           Loan-to-Value Ratios in excess of 80% that have Primary Mortgage Insurance
</TABLE>

                                       xi

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of March 1, 2001, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as
Depositor, UNION PLANTERS PMAC, Inc., as Master Servicer, and WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder.

                                     REMIC I
                                     -------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Group I Mortgage Loans and certain
other related assets subject to this Agreement as a REMIC (as defined herein)
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." The Class R-I Certificates will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein) and the Group I Certificates (other than the Class R-I Certificates)
will be the "regular interests" in the REMIC for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial Certificate Principal Balance
and, solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the Classes
of Certificates.

<TABLE>
<CAPTION>
                                          Initial Aggregate Certificate     Latest Possible
Designation        Pass-Through Rate           Principal Balance            Maturity Date(1)
-----------        -----------------           ------------------           ----------------
<S>                <C>                    <C>                               <C>
Class AF-1         7.000% per annum              $ 79,642,448.00            February 25, 2031
Class AF-2         7.000% per annum              $ 13,497,833.00            February 25, 2031
 Class PO              0.000%(2)                 $  2,002,609.00            February 25, 2031
 Class IO             Variable(3)                $ 97,332,880.00(4)         February 25, 2031
Class BF-1         7.000% per annum              $  1,216,661.00            February 25, 2031
Class BF-2         7.000% per annum              $    340,665.08            February 25, 2031
Class BF-3         7.000% per annum              $    194,665.76            February 25, 2031
Class BF-4         7.000% per annum              $    194,665.76            February 25, 2031
Class BF-5         7.000% per annum              $     97,332.88            February 25, 2031
Class BF-6         7.000% per annum              $    145,999.32            February 25, 2031
</TABLE>

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

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      The Class PO Certificates are not entitled to distributions of
         interest.
(3)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(4)      Initial Notional Amount. As provided herein, the Class IO Certificates
         entitle the Holders thereof solely to distributions of interest accrued
         on the related Notional Amount of such Certificates.

<PAGE>

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Group II Mortgage Loans and certain
other related assets subject to this Agreement as a REMIC (as defined herein)
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Certificates will be the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions (as
defined herein) and the Group II Certificates (other than the Class R-II
Certificates) will be the "regular interests" in the REMIC for purposes of the
REMIC Provisions (as defined herein). The following table irrevocably sets forth
the designation, the Pass-Through Rate, the initial Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the Classes
of Certificates.

<TABLE>
<CAPTION>
                                           Initial Aggregate Certificate   Latest Possible
Designation        Pass-Through Rate(2)          Principal Balance         Maturity Date(1)
-----------        --------------------          -----------------         ----------------
<S>                <C>                     <C>                            <C>
Class AV-1              Variable(3)              $ 219,510,286.00         February 25, 2031
Class AV-2              Variable(3)              $  56,117,650.00         February 25, 2031
Class BV-1              Variable(3)              $   5,932,149.80         February 25, 2031
Class BV-2              Variable(3)              $   2,604,348.45         February 25, 2031
Class BV-3              Variable(3)              $   1,591,552.39         February 25, 2031
Class BV-4              Variable(3)              $   1,736,238.97         February 25, 2031
Class BV-5              Variable(3)              $     868,119.48         February 25, 2031
Class BV-6              Variable(3)              $   1,012,806.06         February 25, 2031
</TABLE>

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

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.

                  As of the Cut-off Date, the Original Group I Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $97,332,880.33. As of the
Cut-off Date, the Original Group II Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $289,373,162.49.

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

                                       -2-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

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

                  "Advancing Person": As defined in Section 3.26 hereof.

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

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

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

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.

                  "Available Distribution Amount": The Group I-A Available
Distribution Amount, Group I-B Available Distribution Amount, Group II-A
Available Distribution Amount and the Group II-B Available Distribution Amount.

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

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

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

                                       -3-

<PAGE>

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

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

                  "Cash-out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than $1,000 in excess of the principal balance of any
existing first mortgage or subordinate mortgage on the related Mortgaged
Property and related closing costs.

                  "Certificate": Any one of the Mortgage Pass-Through
Certificates, Series 2001-UP1, issued under this Agreement.

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

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

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

                  "Certificate Principal Balance": With respect to any
Certificate, other than a Class IO Certificate, as of any date of determination,
the Certificate Principal Balance of such Certificate

                                       -4-

<PAGE>

on the Distribution Date immediately prior to such date of determination,
reduced by the aggregate of (a) all distributions of principal made thereon on
such immediately prior Distribution Date and (b) without duplication of amounts
described in clause (a) above, reductions in the Certificate Principal Balance
thereof in connection with allocations thereto of Realized Losses on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the initial Distribution Date, the initial Certificate Principal
Balance of such Certificate, as stated on the face thereof); provided, however,
that the Certificate Principal Balance of each Subordinate Certificate of the
Class of Subordinate Certificates outstanding with the highest numerical
designation at any given time shall not be greater than the Percentage Interest
evidenced by such Certificate multiplied by the excess, if any, of (A) the then
aggregate Stated Principal Balance of the Mortgage Loans over (B) the then
aggregate Certificate Principal Balances of all other Classes of Certificates
then outstanding. The Class IO Certificates shall not have Certificate Principal
Balances and shall not be entitled to any distributions of principal.

                  "Certificate Register": The register maintained pursuant to
Section 5.02.

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

                  "Class A Certificate": Any Class AF-1 Certificate, Class AF-2
Certificate, Class AV- 1 Certificate or Class AV-2 Certificate.

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

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

                  "Class AV-1 Certificate": Any one of the Class AV-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-3 and evidencing a Regular Interest in
the REMIC II for purposes of the REMIC Provisions.

                  "Class AV-2 Certificate": Any one of the Class AV-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-4 and evidencing a Regular Interest in
the REMIC II for purposes of the REMIC Provisions.

                  "Class B Percentage": Any one of the Class BF-1 Percentage,
the Class BF-2 Percentage, the Class BF-3 Percentage, the Class BF-4 Percentage,
the Class BF-5 Percentage, the Class BF-6 Percentage, the Class BV-1 Percentage,
the Class BV-2 Percentage, the Class BV-3 Percentage, the Class BV-4 Percentage,
the Class BV-5 Percentage or the Class BV-6 Percentage.

                                       -5-

<PAGE>

                  "Class BF-1 Certificate": Any one of the Class BF-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-7 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-1 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-1
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-1 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group I Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Class BF-2 Certificate": Any one of the Class BF-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-8 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-2 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-2
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-2 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group I Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Class BF-3 Certificate": Any one of the Class BF-3
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-9 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-3 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-3
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-3 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group I Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Class BF-4 Certificate": Any one of the Class BF-4
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-10 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-4 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal

                                       -6-

<PAGE>

Balance of the Class BF-4 Certificates immediately prior to such date over the
aggregate amount, if any, payable to the Holders of the Class BF-4 Certificates
on such date pursuant to Section 4.01(b)(i)(Z), and the denominator of which is
the sum of (i) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the Group I Mortgage Loans, plus (ii) the aggregate
of the Non-Class PO Percentage of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Class BF-5 Certificate": Any one of the Class BF-5
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-11 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-5 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-5
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-5 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group I Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Class BF-6 Certificate": Any one of the Class BF-6
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-12 and evidencing a Regular Interest in
REMIC I for purposes of the REMIC Provisions.

                  "Class BF-6 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-6
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-6 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group I Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Class BV-1 Certificate": Any one of the Class BV-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-13 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-1 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-1
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-1 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                                       -7-

<PAGE>

                  "Class BV-2 Certificate": Any one of the Class BV-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-14 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-2 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-2
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-2 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Class BV-3 Certificate": Any one of the Class BV-3
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-15 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-3 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-3
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-3 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Class BV-4 Certificate": Any one of the Class BV-4
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-16 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-4 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-4
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-4 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Class BV-5 Certificate": Any one of the Class BV-5
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-17 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-5 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate

                                       -8-

<PAGE>

Principal Balance of the Class BV-5 Certificates immediately prior to such date
over the aggregate amount, if any, payable to the Holders of the Class BV-5
Certificates on such date pursuant to Section 4.01(c)(i)(Z), and the denominator
of which is the sum of (i) the aggregate of the Scheduled Principal Balance of
each of the Group II Mortgage Loans, plus (ii) the aggregate of the Scheduled
Principal Balance of each of the REO Properties, in each case before reduction
for any Realized Losses on such Distribution Date.

                  "Class BV-6 Certificate": Any one of the Class BV-6
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-18 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class BV-6 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-6
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-6 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Class IO Certificate": Any one of the Class IO Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC I for
purposes of the REMIC Provisions. The Class IO Certificates shall not have a
Certificate Principal Balance and shall not be entitled to any distributions of
principal.

                  "Class IO Mortgage Loan": Each Group I Mortgage Loan with a
Net Mortgage Rate equal to or greater than 7.000% per annum.

                  "Class PO Certificate": Any one of the Class PO Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and evidencing a Regular Interest in REMIC I for
purposes of the REMIC Provisions. The Class PO Certificates shall have a
Pass-Through Rate of 0.000% per annum and shall not be entitled to any
distributions of interest.

                  "Class PO Mortgage Loan": Each Group I Mortgage Loan with a
Net Mortgage Rate below 7.000% per annum.

                  "Class PO Percentage": With respect to each Class PO Mortgage
Loan, the quotient of (i) 7.000% per annum minus the related Net Mortgage Rate
divided by (ii) 7.000% per annum. With respect to each Class IO Mortgage Loan,
0.000% per annum.

                  "Class PO Principal Distribution Amount": For any Distribution
Date, an amount equal to the aggregate of:

                                       -9-

<PAGE>

                  (a)      the sum of the following:

                         (i) the related Class PO Percentage of the principal
                  portion of each Monthly Payment due during the related Due
                  Period in respect of each Class PO Mortgage Loan whether or
                  not received;

                        (ii) the related Class PO Percentage of the principal
                  portion of all Insurance Proceeds and Liquidation Proceeds
                  (other than amounts described in clause (c) below) received in
                  respect of each Class PO Mortgage Loan during the related
                  Prepayment Period (other than any such Class PO Mortgage Loan
                  that was purchased, sold or replaced pursuant to or as
                  contemplated by Section 2.03, Section 3.16(c) or Section 9.01
                  during the related Prepayment Period), net of any portion
                  thereof that represents a recovery of principal for which an
                  advance was made by the Master Servicer pursuant to Section
                  4.03 in respect of a preceding Distribution Date;

                       (iii) the related Class PO Percentage of the Stated
                  Principal Balance (calculated immediately prior to such
                  Distribution Date) of each Class PO Mortgage Loan that was
                  purchased, sold or replaced pursuant to or as contemplated by
                  Section 2.03, Section 3.16(c) or Section 9.01 during the
                  related Prepayment Period;

                        (iv) the related Class PO Percentage of all REO
                  Principal Amortization collected in respect of any REO
                  Property during the related Prepayment Period; and

                         (v) in connection with the substitution of one or more
                  Qualified Substitute Mortgage Loans for one or more Deleted
                  Mortgage Loans which were Class PO Mortgage Loans pursuant to
                  Section 2.03 during the related Prepayment Period, the excess,
                  if any, of (A) the related Class PO Percentage of the
                  aggregate of the Stated Principal Balances (calculated as of
                  the respective dates of substitution) of such Deleted Mortgage
                  Loans, net of the aggregate of the related Class PO Percentage
                  of the principal portions of the Monthly Payments due during
                  the related Prepayment Period (to the extent received from the
                  related Mortgagor or advanced by the Master Servicer and
                  distributed pursuant to Section 4.01 on the Distribution Date
                  in the related Prepayment Period) in respect of each such
                  Deleted Mortgage Loan that was replaced prior to the
                  Distribution Date in the related Prepayment Period, over (B)
                  the related Class PO Percentage of the Stated Principal
                  Balances (calculated as of the respective dates of
                  substitution) of such Qualified Substitute Mortgage Loans;

                  (b) the related Class PO Percentage of all Principal
         Prepayments received in respect of each Class PO Mortgage Loan during
         the related Prepayment Period;

                  (c) with respect to any Class PO Mortgage Loan which was the
         subject of a Final Recovery Determination in the related Prepayment
         Period, the related Class PO Percentage of the Stated Principal Balance
         of such Mortgage Loan at the time of such Final Recovery Determination
         (net of the principal portion of any Realized Loss allocated to the
         Class PO

                                      -10-

<PAGE>

         Certificates) to the extent of the principal portion of all Liquidation
         Proceeds with respect to such Class PO Mortgage Loan; and

                  (d) in the case of any Distribution Date subsequent to the
         initial Distribution Date, an amount equal to the excess, if any, of
         the Class PO Principal Distribution Amount for the immediately
         preceding Distribution Date, over the aggregate distributions of
         principal made in respect of the Class PO Certificates on such
         immediately preceding Distribution Date pursuant to Section 4.01 to the
         extent that any such amounts are not attributable to Realized Losses
         which were allocated to the Subordinate Certificates pursuant to
         Section 4.04.

                  "Class R-I Certificate": Any one of the Class R-I Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-19 and evidencing the sole class of Residual
Interest in REMIC I for purposes of the REMIC Provisions.

                  "Class R-II Certificate": Any one of the Class R-II
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-20 and evidencing the sole class of
Residual Interest in REMIC II for purposes of the REMIC Provisions.

                  "Closing Date": March 28, 2001.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled, "Union Planters PMAC, Inc., as Master Servicer for Wells Fargo Bank
Minnesota, National Association, as Trustee, in trust for the registered holders
of Union Planters Mortgage Pass-Through Certificates, Series 2001-UP1." The
Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Sixth and Marquette,
Minneapolis, Minnesota 55479, Attention: Corporate Trust, Union Planters, Series
2001- UP1, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor and the Master Servicer.

                  "Cut-off Date": With respect to each Original Mortgage Loan,
March 1, 2001. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

                                      -11-

<PAGE>

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

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

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

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

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

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

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "A-3" or better by S&P and "F-3" or better by Fitch, if rated by Fitch
(or comparable ratings if S&P and Fitch are not the Rating Agencies).

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

                  "Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately succeeding
such 15th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by either REMIC I or REMIC
II, other than through an Independent Contractor; provided, however, that the
Trustee (or

                                      -12-

<PAGE>

the Master Servicer on behalf of the Trustee) shall not be considered to
Directly Operate an REO Property solely because the Trustee (or the Master
Servicer on behalf of the Trustee) establishes rental terms, chooses tenants,
enters into or renews leases, deals with taxes and insurance, or makes decisions
as to repairs or capital expenditures with respect to such REO Property.

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" within the meaning of Section 775 of the Code and (vi) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an Ownership Interest in a Residual Certificate by such Person
may cause either REMIC I or REMIC II or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of an Ownership Interest in a Residual Certificate to such
Person. The terms "United States," "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Wells Fargo Bank Minnesota, National Association, as Trustee, in trust
for the registered holders of Union Planters Mortgage Pass-Through Certificates,
Series 2001-UP1." The Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in April 2001.

                  "DOL": The United States Department of Labor or any successor
in interest.

                  "DOL Regulations": The regulations promulgated by the DOL at
29 C.F.R. ss.2510.3- 101.

                  "Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace (or, in the case of any Mortgage Loan which has
its Monthly Payment due on a day each calendar month other than the first day of
each calendar month, the date that such Monthly Payment due and which falls
within the Due Period relating to such Distribution Date).

                                      -13-

<PAGE>

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which are rated "A-3" or
better by S&P and "F-3" or better by Fitch, if rated by Fitch (or comparable
ratings if S&P and Fitch are not the Rating Agencies) at the time any amounts
are held on deposit therein, (ii) an account or accounts the deposits in which
are fully insured by the FDIC or (iii) a trust account or accounts maintained
with the corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity. Eligible Accounts
may bear interest.

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

                  "ERISA Qualifiying Underwriting": With respect to the Class IO
Certificates and the Class PO Certificates, a best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption 97-34, 62 Fed. Reg. 39021 (1997), as amended (or any
successor thereto), or any substantially similar administrative exemption
granted by the DOL (an "Underwriter's Exemption").

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

                  "Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the Group I Bankruptcy Amount or the Group II Bankruptcy
Amount, as applicable.

                  "Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the Group I Fraud Loss Amount or the Group II Fraud Loss Amount, as
applicable.

                  "Excess Loss": Any Excess Bankruptcy Loss, Excess Special
Hazard Loss, Excess Fraud Loss or Extraordinary Loss.

                  "Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the Group I Special Hazard Amount or the Group II
Special Hazard Amount, as applicable.

                  "Extraordinary Loss": Any Realized Loss or portion thereof
caused by or resulting from:

                  (i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";

                  (ii) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an actual,
impending or expected attack by any government or

                                      -14-

<PAGE>

sovereign power, DE JURE or DE FACTO, or by any authority maintaining or using
military, naval or air forces, or by military, naval or air forces, or by an
agent of any such government, power, authority or forces;

                  (iii) any weapon of war employing atomic fission or
radioactive forces whether in time of peace or war, and

                  (iv) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.

                  "Extraordinary Trust Fund Expenses": Any amounts reimbursable
to the Master Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii), any amounts reimbursable to the Trustee from the Trust Fund
pursuant to Section 8.05 and any other costs, expenses, liabilities and losses
borne by the Trust Fund (exclusive of any cost, expense, liability or loss that
is specific to a particular Mortgage Loan or REO Property and is taken into
account in calculating a Realized Loss in respect thereof) for which the Trust
Fund has not and, in the reasonable good faith judgment of the Trustee, shall
not, obtain reimbursement or indemnification from any other Person.

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

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

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a determination
made by the Master Servicer that all Liquidation Proceeds have been recovered.
The Master Servicer shall maintain records of each Final Recovery Determination
made thereby.

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

                  "Fraud Loss": Any Realized Loss or portion thereof sustained
by reason of a default arising from intentional fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including by
reason of the denial of coverage under any related Primary Mortgage Insurance
Policy.

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

                  "Gross Margin": With respect to each Group II Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in

                                      -15-

<PAGE>

accordance with the terms of the related Mortgage Note used to determine the
Mortgage Rate for such Group II Mortgage Loan.

                  "Group I-A Available Distribution Amount": With respect to the
Group I-A Mortgage Loans and any Distribution Date, an amount equal to (1) the
sum of (a) the aggregate of the amounts on deposit in the Collection Account and
Distribution Account as of the close of business on the related Determination
Date, (b) the aggregate of any amounts received in respect of an REO Property
withdrawn from any REO Account and deposited in the Distribution Account for
such Distribution Date pursuant to Section 3.23, (c) the aggregate of any
amounts deposited in the Distribution Account by the Master Servicer in respect
of Prepayment Interest Shortfalls for such Distribution Date pursuant to Section
3.24, (d) the aggregate of any P&I Advances made by the Master Servicer for such
Distribution Date pursuant to Section 4.03 and (e) the aggregate of any advances
made by the Trustee for such Distribution Date pursuant to Section 7.02(b),
reduced (to not less than zero) by (2) the sum of (x) the portion of the amount
described in clause (1)(a) above that represents (i) Monthly Payments on the
Group I-A Mortgage Loans received from a Mortgagor on or prior to the
Determination Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Group I-A Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Group I-A Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Group I-A Mortgage Loans after the
related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.11(a) or Section 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee
payable from the Distribution Account pursuant to Section 8.05 and (vii) amounts
deposited in the Collection Account or the Distribution Account in error, and
(y) amounts reimbursable to the Trustee for an advance made pursuant to Section
7.02(b), which advance the Trustee has determined to be nonrecoverable from the
Stayed Funds in respect of which it was made. Notwithstanding the foregoing, the
Group I-A Available Distribution Amount for any Distribution Date shall be
increased (in the case of a Group I Undercollateralized Sub-Group with respect
to Sub-Group I-A) or decreased (in the case of a Group I Overcollateralized
Sub-Group with respect to Sub-Group I-A) by any applicable Group I Diverted
Interest Amount or Group I Class A Principal Adjustment Amount, in each case for
such Distribution Date.

                  "Group I-A Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Group I-A
Mortgage Loans are identified as such on the Mortgage Loan Schedule.

                  "Group I-A Senior Percentage": With respect to any
Distribution Date and the Class AF-1 Certificates, the lesser of (a) 100% and
(b) a fraction, expressed as a percentage, the numerator of which is the excess,
if any, of the aggregate Certificate Principal Balance of the Class AF-1
Certificates for such Distribution Date over the aggregate amount, if any,
payable to the Holders of the Class AF-1 Certificates on such date pursuant to
clause (d) of the definition of "Group I Senior Principal Distribution Amount,"
and the denominator of which is the sum of (i) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the Group I-A Mortgage

                                      -16-

<PAGE>

Loans, plus (ii) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the REO Properties in Loan Group I-A, in each case
before reduction for any Realized Losses on such Distribution Date.

                  Notwithstanding the foregoing, on any Group I
Cross-Collateralization Date on which the Group I-A Mortgage Loans exceed the
balance of the Class AF-1 Certificates, the Group I-A Senior Percentage will
equal the sum of the Certificate Principal Balance of the Class AF-1
Certificates immediately prior to such Distribution Date plus the Group I
Overcollateralized Amount divided by the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balances of the Group I-A Mortgage Loans
immediately prior to such Distribution Date. On any Distribution Date after the
reduction of the Certificate Principal Balance of the Class AF-2 Certificates to
zero, the Group I-A Senior Percentage will be a percentage equal to the
Certificate Principal Balance of the Class AF-1 Certificates immediately prior
to such Distribution Date divided by the aggregate of the Non-Class PO
Percentages of the Scheduled Principal Balances of the Group I Mortgage Loans in
both Sub-Groups immediately prior to such Distribution Date.

                  "Group I-A Subordinate Percentage": With respect to the Group
I Subordinate Certificates and any Distribution Date, a percentage equal to 100%
minus the Group I-A Senior Percentage.

                  "Group I-B Available Distribution Amount": With respect to the
Group I-B Mortgage Loans and any Distribution Date, an amount equal to (1) the
sum of (a) the aggregate of the amounts on deposit in the Collection Account and
Distribution Account as of the close of business on the related Determination
Date, (b) the aggregate of any amounts received in respect of an REO Property
withdrawn from any REO Account and deposited in the Distribution Account for
such Distribution Date pursuant to Section 3.23, (c) the aggregate of any
amounts deposited in the Distribution Account by the Master Servicer in respect
of Prepayment Interest Shortfalls for such Distribution Date pursuant to Section
3.24, (d) the aggregate of any P&I Advances made by the Master Servicer for such
Distribution Date pursuant to Section 4.03 and (e) the aggregate of any advances
made by the Trustee for such Distribution Date pursuant to Section 7.02(b),
reduced (to not less than zero) by (2) the sum of (x) the portion of the amount
described in clause (1)(a) above that represents (i) Monthly Payments on the
Group I-B Mortgage Loans received from a Mortgagor on or prior to the
Determination Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Group I-B Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Group I-B Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Group I-B Mortgage Loans after the
related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.11(a) or Section 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee
payable from the Distribution Account pursuant to Section 8.05 and (vii) amounts
deposited in the Collection Account or the Distribution Account in error, and
(y) amounts reimbursable to the Trustee for an advance made pursuant to Section
7.02(b), which advance the Trustee has determined to be nonrecoverable from the
Stayed Funds in respect of which it was made. Notwithstanding the foregoing, the
Group

                                      -17-

<PAGE>

I-B Available Distribution Amount for any Distribution Date shall be increased
(in the case of a Group I Undercollateralized Sub-Group with respect to
Sub-Group I-B) or decreased (in the case of a Group I Overcollateralized
Sub-Group with respect to Sub-Group I-B) by any applicable Group I Diverted
Interest Amount or Group I Class A Principal Adjustment Amount, in each case for
such Distribution Date.

                  "Group I-B Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Group I-B
Mortgage Loans are identified as such on the Mortgage Loan Schedule.

                  "Group I-B Senior Percentage": With respect to any
Distribution Date and the Class AF-2 Certificates, the lesser of (a) 100% and
(b) a fraction, expressed as a percentage, the numerator of which is the excess,
if any, of the aggregate Certificate Principal Balance of the Class AF-2
Certificates for such Distribution Date over the aggregate amount, if any,
payable to the Holders of the Class AF-2 Certificates on such date pursuant to
clause (d) of the definition of "Group I Senior Principal Distribution Amount,"
and the denominator of which is the sum of (i) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the Group I-B Mortgage
Loans, plus (ii) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the REO Properties in Loan Group I-B, in each case
before reduction for any Realized Losses on such Distribution Date.

                  Notwithstanding the foregoing, on any Group I
Cross-Collateralization Date on which the Group I-B Mortgage Loans exceed the
balance of the Class AF-2 Certificates, the Group I-B Senior Percentage will
equal the sum of the Certificate Principal Balance of the Class AF-2
Certificates immediately prior to such Distribution Date plus the Group I
Overcollateralized Amount divided by the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balances of the Group I-B Mortgage Loans
immediately prior to such Distribution Date. On any Distribution Date after the
reduction of the Certificate Principal Balance of the Class AF-1 Certificates to
zero, the Group I-B Senior Percentage will be a percentage equal to the
Certificate Principal Balance of the Class AF-2 Certificates immediately prior
to such Distribution Date divided by the aggregate of the Non-Class PO
Percentages of the Scheduled Principal Balances of the Group I Mortgage Loans in
both Sub-Groups immediately prior to such Distribution Date.

                  "Group I-B Subordinate Percentage": With respect to the Group
I Subordinate Certificates and any Distribution Date, a percentage equal to 100%
minus the Group I-B Senior Percentage.

                  "Group II-A Available Distribution Amount": With respect to
the Group II-A Mortgage Loans and any Distribution Date, an amount equal to (1)
the sum of (a) the aggregate of the amounts on deposit in the Collection Account
and Distribution Account as of the close of business on the related
Determination Date, (b) the aggregate of any amounts received in respect of an
REO Property withdrawn from any REO Account and deposited in the Distribution
Account for such Distribution Date pursuant to Section 3.23, (c) the aggregate
of any amounts deposited in the Distribution Account by the Master Servicer in
respect of Prepayment Interest Shortfalls for such Distribution Date pursuant to
Section 3.24, (d) the aggregate of any P&I Advances made by the

                                      -18-

<PAGE>

Master Servicer for such Distribution Date pursuant to Section 4.03 and (e) the
aggregate of any advances made by the Trustee for such Distribution Date
pursuant to Section 7.02(b), reduced (to not less than zero) by (2) the sum of
(x) the portion of the amount described in clause (1)(a) above that represents
(i) Monthly Payments on the Group II-A Mortgage Loans received from a Mortgagor
on or prior to the Determination Date but due during any Due Period subsequent
to the related Due Period, (ii) Principal Prepayments on the Group II-A Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Group II-A Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Group II-A Mortgage Loans after
the related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.11(a) or Section 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee
payable from the Distribution Account pursuant to Section 8.05 and (vii) amounts
deposited in the Collection Account or the Distribution Account in error, and
(y) amounts reimbursable to the Trustee for an advance made pursuant to Section
7.02(b), which advance the Trustee has determined to be nonrecoverable from the
Stayed Funds in respect of which it was made. Notwithstanding the foregoing, the
Group II-A Available Distribution Amount for any Distribution Date shall be
increased (in the case of a Group II Undercollateralized Sub-Group with respect
to Sub-Group II-A) or decreased (in the case of a Group II Overcollateralized
Sub-Group with respect to Sub-Group II- A) by any applicable Group II Diverted
Interest Amount or Group II Class A Principal Adjustment Amount, in each case
for such Distribution Date.

                  "Group II-A Mortgage Loan": A first lien Mortgage Loan which
provides for a Mortgage Rate that adjusts on each Adjustment Date payable with
respect thereto. The Group II-A Mortgage Loans are identified as such on the
Mortgage Loan Schedule.

                  "Group II-A Senior Percentage": With respect to any
Distribution Date and the Class AV-1 Certificates, the lesser of (a) 100% and
(b) a fraction, expressed as a percentage, the numerator of which is the excess,
if any, of the aggregate Certificate Principal Balance of the Class AV-1
Certificates for such Distribution Date over the aggregate amount, if any,
payable to the Holders of the Class AV-1 Certificates on such date pursuant to
clause (d) of the definition of "Group II Senior Principal Distribution Amount,"
and the denominator of which is the sum of (i) the aggregate of the Scheduled
Principal Balance of each of the Group II-A Mortgage Loans, plus (ii) the
aggregate of the Scheduled Principal Balance of each of the REO Properties in
Loan Group II-A, in each case before reduction for any Realized Losses on such
Distribution Date.

                  Notwithstanding the foregoing, on any Group II
Cross-Collateralization Date on which the Group II-A Mortgage Loans exceed the
balance of the Class AV-1 Certificates, the Group II-A Senior Percentage will
equal the sum of the Certificate Principal Balance of the Class AV-1
Certificates immediately prior to such Distribution Date plus the Group II
Overcollateralized Amount divided by the aggregate of the Scheduled Principal
Balances of the Group II-A Mortgage Loans immediately prior to such Distribution
Date. On any Distribution Date after the reduction of the Certificate Principal
Balance of the Class AV-2 Certificates to zero, the Group II-A Senior Percentage
will be a percentage equal to the Certificate Principal Balance of the Class
AV-1

                                      -19-

<PAGE>

Certificates immediately prior to such Distribution Date divided by the
aggregate of the Scheduled Principal Balances of the Group II Mortgage Loans in
both Sub-Groups immediately prior to such Distribution Date.

                  "Group II-A Subordinate Percentage": With respect to the Group
II Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group II-A Senior Percentage.

                  "Group II-B Available Distribution Amount": With respect to
the Group II-B Mortgage Loans and any Distribution Date, an amount equal to (1)
the sum of (a) the aggregate of the amounts on deposit in the Collection Account
and Distribution Account as of the close of business on the related
Determination Date, (b) the aggregate of any amounts received in respect of an
REO Property withdrawn from any REO Account and deposited in the Distribution
Account for such Distribution Date pursuant to Section 3.23, (c) the aggregate
of any amounts deposited in the Distribution Account by the Master Servicer in
respect of Prepayment Interest Shortfalls for such Distribution Date pursuant to
Section 3.24, (d) the aggregate of any P&I Advances made by the Master Servicer
for such Distribution Date pursuant to Section 4.03 and (e) the aggregate of any
advances made by the Trustee for such Distribution Date pursuant to Section
7.02(b), reduced (to not less than zero) by (2) the sum of (x) the portion of
the amount described in clause (1)(a) above that represents (i) Monthly Payments
on the Group II-B Mortgage Loans received from a Mortgagor on or prior to the
Determination Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Group II-B Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Group II-B Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Mortgage Loans after the related
Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the
Master Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section
3.11(a) or Section 3.12 or otherwise payable in respect of Extraordinary Trust
Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05 and (vii) amounts deposited in the
Collection Account or the Distribution Account in error, and (y) amounts
reimbursable to the Trustee for an advance made pursuant to Section 7.02(b),
which advance the Trustee has determined to be nonrecoverable from the Stayed
Funds in respect of which it was made. Notwithstanding the foregoing, the Group
II-B Available Distribution Amount for any Distribution Date shall be increased
(in the case of a Group II Undercollateralized Sub-Group with respect to
Sub-Group II-B) or decreased (in the case of a Group II Overcollateralized
Sub-Group with respect to Sub-Group II-B) by any applicable Group II Diverted
Interest Amount or Group II Class A Principal Adjustment Amount, in each case
for such Distribution Date.

                  "Group II-B Mortgage Loan": A first lien Mortgage Loan which
provides for a Mortgage Rate that adjusts on each Adjustment Date payable with
respect thereto. The Group II-B Mortgage Loans are identified as such on the
Mortgage Loan Schedule.

                  "Group II-B Senior Percentage": With respect to any
Distribution Date and the Class AV-2 Certificates, the lesser of (a) 100% and
(b) a fraction, expressed as a percentage, the numerator

                                      -20-

<PAGE>

of which is the excess, if any, of the aggregate Certificate Principal Balance
of the Class AV-2 Certificates for such Distribution Date over the aggregate
amount, if any, payable to the Holders of the Class AV-2 Certificates on such
date pursuant to clause (d) of the definition of "Group II Senior Principal
Distribution Amount," and the denominator of which is the sum of (i) the
aggregate of the Scheduled Principal Balance of each of the Group II-B Mortgage
Loans, plus (ii) the aggregate of the Scheduled Principal Balance of each of the
REO Properties in Loan Group II-B, in each case before reduction for any
Realized Losses on such Distribution Date.

                  Notwithstanding the foregoing, on any Group II
Cross-Collateralization Date on which the Group II-B Mortgage Loans exceed the
balance of the Class AV-2 Certificates, the Group II-B Senior Percentage will
equal the sum of the Certificate Principal Balance of the Class AV-2
Certificates immediately prior to such Distribution Date plus the Group II
Overcollateralized Amount divided by the aggregate of the Scheduled Principal
Balances of the Group II-B Mortgage Loans immediately prior to such Distribution
Date. On any Distribution Date after the reduction of the Certificate Principal
Balance of the Class AV-1 Certificates to zero, the Group II-B Senior Percentage
will be a percentage equal to the Certificate Principal Balance of the Class
AV-2 Certificates immediately prior to such Distribution Date divided by the
aggregate of the Scheduled Principal Balances of the Group II Mortgage Loans in
both Sub-Groups immediately prior to such Distribution Date.

                  "Group II-B Subordinate Percentage": With respect to the Group
II Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group II-B Senior Percentage.

                  "Group I Bankruptcy Amount": As of any date of determination,
an amount equal to the excess, if any, of (A) $50,000 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Group I Subordinate
Certificates in accordance with Section 4.04.

                  "Group I Certificates": The Class AF-1 Certificates, Class
AF-2 Certificates, Class IO Certificates, Class PO Certificates, Class BF-1
Certificates, Class BF-1 Certificates, Class BF-3 Certificates, Class BF-4
Certificates, Class BF-5 Certificates, Class BF-6 Certificates and the Class R-I
Certificates.

                  "Group I Class A Principal Adjustment Amount": As to any
Distribution Date on which there is a Group I Undercollateralized Sub-Group and
the balance of the Group I Senior Certificates in the Group I Overcollateralized
Sub-Group has been reduced to zero, the related Group I Senior Principal
Distribution Amount for the Group I Overcollateralized Sub-Group.

                  "Group I Cross-Collateralization Date": Any Distribution Date
on which there exists a Group I Undercollateralizated Sub-Group and a Group I
Overcollateralized Sub-Group.

                  "Group I Diverted Interest Amount": With respect to any
Distribution Date, one month's interest accrued during the related Interest
Accrual Period on the Group I Overcollateralized Amount at 7.000% per annum.

                                      -21-

<PAGE>

                  "Group I Fraud Loss Amount": As of any date of determination
after the Cut-off Date, an amount equal to: (X) prior to the third anniversary
of the Cut-off Date, 1.00% of the aggregate Stated Principal Balance of the
Original Group I Mortgage Loans as of the Cut-off Date (initially $973,329)
minus the aggregate amount of Fraud Losses allocated solely to the Group I
Subordinate Certificates in accordance with Section 4.04 since the Cut-off Date
up to such date of determination and (Y) from the third to the fifth anniversary
of the Cut-off Date, an amount equal to (1) the lesser of (a) the Group I Fraud
Loss Amount as of the most recent anniversary of the Cut- off Date and (b) 0.50%
of the aggregate outstanding principal balance of the Group I Mortgage Loans as
of the most recent anniversary of the Cut-off Date minus (2) the Fraud Losses
allocated solely to the Group I Subordinate Certificates in accordance with
Section 4.04 since the most recent anniversary of the Cut-off Date up to such
date of determination. On and after the fifth anniversary of the Cut-off Date
the Group I Fraud Loss Amount shall be zero.

                  "Group I Mortgage Loans": Together, the Group I-A Mortgage
Loans and the Group I-B Mortgage Loans.

                  "Group I Overcollateralized Amount": As to any Distribution
Date, an amount equal to the Group I Undercollateralized Amount for the
unrelated Group I Senior Certificates.

                  "Group I Overcollateralized Sub-Group": As to any Distribution
Date, either Sub- Group for which a Group I Overcollateralized Amount greater
than zero is calculated.

                  "Group I Senior Certificates": The Class AF-1 Certificates and
the Class AF-2 Certificates.

                  "Group I Senior Interest Distribution Amount": With respect to
any Distribution Date, an amount equal to the aggregate of the Interest
Distribution Amounts for the Distribution Date on the Group I Senior
Certificates and the Class IO Certificates.

                  "Group I Senior Percentage": The Group I-A Senior Percentage
or the Group I-B Senior Percentage, as applicable.

                  "Group I Senior Prepayment Percentage": With respect to any
Distribution Date and the Class AF-1 Certificates within the range indicated
below, the percentage as indicated below:

                                      -22-

<PAGE>

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
April 2001 through March 2006                           100%

April 2006 through March 2007                           Group I-A Senior Percentage plus 70% of the Group
                                                        I-A Subordinate Percentage

April 2007 through March 2008                           Group I-A Senior Percentage plus 60% of the Group
                                                        I-A Subordinate Percentage

April 2008 through March 2009                           Group I-A Senior Percentage plus 40% of the Group
                                                        I-A Subordinate Percentage

April 2009 through March 2010                           Group I-A Senior Percentage plus 20% of the Group
                                                        I-A Subordinate Percentage

April 2010 and thereafter                               Group I-A Senior Percentage
</TABLE>

                  With respect to any Distribution Date and the Class AF-2
Certificates within the range indicated below, the percentage as indicated
below:

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
April 2001 through March 2006                           100%

April 2006 through March 2007                           Group I-A Senior Percentage plus 70% of the Group
                                                        I-A Subordinate Percentage

April 2007 through March 2008                           Group I-A Senior Percentage plus 60% of the Group
                                                        I-A Subordinate Percentage

April 2008 through March 2009                           Group I-A Senior Percentage plus 40% of the Group
                                                        I-A Subordinate Percentage

April 2009 through March 2010                           Group I-A Senior Percentage plus 20% of the Group
                                                        I-A Subordinate Percentage

April 2010 and thereafter                               Group I-A Senior Percentage
</TABLE>

provided, however, no reduction to the related Group I Senior Prepayment
Percentage described above shall be made as of any Distribution Date unless (i)
the outstanding principal balance of the Group I Mortgage Loans delinquent 60
days or more (including REO Properties and Group I Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group I Subordinate
Certificates and (ii) Realized Losses on the Group I Mortgage Loans to date are
less than the then applicable Trigger Amount for the Group I Senior
Certificates.

                  Notwithstanding the foregoing, upon a reduction of the
Certificate Principal Balances of the Group I Senior Certificates to zero, the
Group I Senior Prepayment Percentage will equal 0%. In addition, on any
Distribution Date on which the Group I Senior Percentage for either Class of
Group I Senior Certificates exceeds the initial Group I Senior Percentage for
such Class, the Group I Senior Prepayment Percentage for each Class of Group I
Senior Certificates shall be 100%.

                                      -23-

<PAGE>

                  "Group I Senior Principal Distribution Amount": For any
Distribution Date and the Group I Senior Certificates, an amount equal to the
sum of:

                  (a) the product of (x) the then-applicable related Group I
Senior Percentage and (y) the sum of the following:

                         (i) the related Non-Class PO Percentage of the
                  aggregate of the principal portions of all Monthly Payments
                  due during the related Due Period in respect of the related
                  Group I Mortgage Loans whether or not received;

                        (ii) the related Non-Class PO Percentage of the
                  principal portion of all Insurance Proceeds and Liquidation
                  Proceeds (other than amounts described in clause (c) below)
                  received in respect of the related Group I Mortgage Loans
                  during the related Prepayment Period (other than any related
                  Group I Mortgage Loan that was purchased, sold or replaced
                  pursuant to or as contemplated by Section 2.03, Section
                  3.16(c) or Section 9.01 during the related Prepayment Period),
                  net of any portion thereof that represents a recovery of
                  principal for which an advance was made by the Master Servicer
                  pursuant to Section 4.03 in respect of a preceding
                  Distribution Date;

                       (iii) the related Non-Class PO Percentage of the Stated
                  Principal Balance (calculated immediately prior to such
                  Distribution Date) of each related Group I Mortgage Loan that
                  was purchased, sold or replaced pursuant to or as contemplated
                  by Section 2.03, Section 3.16(c) or Section 9.01 during the
                  related Prepayment Period;

                        (iv) the related Non-PO Percentage of all REO Principal
                  Amortization collected in respect of any REO Property during
                  the related Prepayment Period; and

                         (v) in connection with the substitution of one or more
                  Qualified Substitute Mortgage Loans for one or more Deleted
                  Mortgage Loans in Loan Group I-A or Loan Group I-B, as
                  applicable, pursuant to Section 2.03 during the related
                  Prepayment Period, the excess, if any, of (A) the aggregate of
                  the related Non-Class PO Percentage of the Stated Principal
                  Balances (calculated as of the respective dates of
                  substitution) of such Deleted Mortgage Loans, net of the
                  aggregate of the related Non-Class PO Percentage of the
                  principal portions of the Monthly Payments due during the
                  related Prepayment Period (to the extent received from the
                  related Mortgagor or advanced by the Master Servicer and
                  distributed pursuant to Section 4.01 on the Distribution Date
                  in the related Prepayment Period) in respect of each such
                  Deleted Mortgage Loan that was replaced prior to the
                  Distribution Date in the related Prepayment Period, over (B)
                  the aggregate of the related Non-Class PO Percentage of the
                  Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Qualified Substitute Mortgage
                  Loans;

                                      -24-

<PAGE>

                  (b) the product of (x) the then-applicable related Group I
Senior Prepayment Percentage and (y) the related Non-Class PO Percentage of all
Principal Prepayments received in respect of the related Group I Mortgage Loans
during the related Prepayment Period;

                  (c) with respect to any related Group I Mortgage Loan which
was the subject of a Final Recovery Determination in the related Prepayment
Period, the least of (a) the then-applicable related Group I Senior Prepayment
Percentage of the Non-Class PO Percentage multiplied by the net Liquidation
Proceeds and Insurance Proceeds allocable to principal in respect of the related
Group I Mortgage Loans, (b) the then-applicable related Group I Senior
Percentage of the Non-Class PO Percentage multiplied by the Scheduled Principal
Balance of the related Group I Mortgage Loan at the time of such Final Recovery
Determination; and (c) the principal portion of all amounts collected in
connection with such a Final Recovery Determination to the extent not
distributed to the Class PO Certificates; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the related
Group I Senior Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Group I Senior Certificates on such immediately preceding Distribution
Date pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses which were allocated to the Group I Subordinate
Certificates pursuant to Section 4.04.

                  Notwithstanding the foregoing, on any Distribution Date on
which the balance of the Group I Senior Certificates in the Group I
Overcollateralized Sub-Group has been reduced to zero, the Group I Senior
Principal Distribution Amount for the Group I Senior Certificates in the Group I
Undercollateralized Sub-Group will be increased by the Group I Class A Principal
Adjustment Amount.

                  "Group I Special Hazard Amount": Initially, an amount equal to
$973,329. As of each anniversary of the Cut-off Date, an amount equal to the
lesser of (a) the Group I Special Hazard Amount as of the immediately preceding
anniversary of the Cut-off Date minus the aggregate amount of Group I Special
Hazard Losses allocated solely to the Group I Subordinate Certificates in
accordance with Section 4.04 since such immediately preceding anniversary and
(b) the Adjustment Amount (as defined below) as most recently calculated. For
each anniversary of the Cut- off Date, the "Adjustment Amount" shall be equal to
the greatest of (i) the product of 1.00% multiplied by the outstanding principal
balance of the Group I Mortgage Loans on the Distribution Date immediately
preceding such anniversary, (ii) the aggregate outstanding principal balance (as
of the immediately preceding Distribution Date) of the Group I Mortgage Loans
secured by Mortgaged Properties located in the same zip code area in the State
of California and (iii) twice the aggregate outstanding principal balance (as of
the immediately preceding Distribution Date) of the largest Group I Mortgage
Loan.

                  "Group I Subordinate Certificates": The Class BF-1
Certificates, Class BF-2 Certificates, Class BF-3 Certificates, Class BF-4
Certificates, Class BF-5 Certificates and Class BF-6 Certificates.

                                      -25-

<PAGE>

                  "Group I Subordinate Percentage": With respect to the Group I
Subordinate Certificates, the weighted average of the Group I-A Subordinate
Percentage and the Group I-B Subordinate Percentage, weighted based on the
aggregate principal balance of the Non-Class PO Percentages of the Scheduled
Principal Balances of the related Group I Mortgage Loans immediately prior to
the Distribution Date. On any Distribution Date after the reduction of the
Certificate Principal Balance of either class of Group I Senior Certificates to
zero, the Group I Subordinate Percentage on such a Distribution Date will be
100% minus the Group I Senior Percentage for such Distribution Date.

                  "Group I Subordinate Prepayment Percentage": With respect to
any Distribution Date and the Group I Subordinate Certificates, the weighted
average of (i) 100% minus the Group I Senior Prepayment Percentage with respect
to the Class AF-1 Certificates for such Distribution Date, weighted based on the
aggregate principal balance of the Non-Class PO Percentage of the Scheduled
Principal Balance of the Group I-A Mortgage Loans and (ii) 100% minus the Group
I Senior Prepayment Percentage with respect to the Class AF-2 Certificates for
such Distribution Date, weighted based on the aggregate principal balance of the
Non-Class PO Percentage of the Scheduled Principal Balance of the Group I-B
Mortgage Loans.

                  "Group I Subordinate Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:

                  (a) the product of (x) the then-applicable Group I Subordinate
Percentage and (y) the sum of the following:

                         (i) the related Non-Class PO Percentage of the
                  aggregate of the principal portions of all Monthly Payments
                  due during the related Due Period in respect of the Group I
                  Mortgage Loans whether or not received;

                        (ii) the related Non-Class PO Percentage of the
                  principal portion of all Insurance Proceeds and Liquidation
                  Proceeds (other than amounts described in clause (c) below)
                  received in respect of the Group I Mortgage Loans during the
                  related Prepayment Period (other than any such Group I
                  Mortgage Loan that was purchased, sold or replaced pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 during the related Prepayment Period), net of any portion
                  thereof that represents a recovery of principal for which an
                  advance was made by the Master Servicer pursuant to Section
                  4.03 in respect of a preceding Distribution Date;

                       (iii) the related Non-Class PO Percentage of the Stated
                  Principal Balance (calculated immediately prior to such
                  Distribution Date) of each Group I Mortgage Loan that was
                  purchased, sold or replaced pursuant to or as contemplated by
                  Section 2.03, Section 3.16(c) or Section 9.01 during the
                  related Prepayment Period;

                        (iv) the related Non-PO Percentage of all REO Principal
                  Amortization collected in respect of any REO Property during
                  the related Prepayment Period; and

                                      -26-

<PAGE>

                         (v) in connection with the substitution of one or more
                  Qualified Substitute Mortgage Loans for one or more Deleted
                  Mortgage Loans in Loan Group I-A or Loan Group I-B pursuant to
                  Section 2.03 during the related Prepayment Period, the excess,
                  if any, of (A) the aggregate of the related Non-Class PO
                  Percentage of the Stated Principal Balances (calculated as of
                  the respective dates of substitution) of such Deleted Mortgage
                  Loans, net of the aggregate of the related Non-Class PO
                  Percentage of the principal portions of the Monthly Payments
                  due during the related Prepayment Period (to the extent
                  received from the related Mortgagor or advanced by the Master
                  Servicer and distributed pursuant to Section 4.01 on the
                  Distribution Date in the related Prepayment Period) in respect
                  of each such Deleted Mortgage Loan that was replaced prior to
                  the Distribution Date in the related Prepayment Period, over
                  (B) the aggregate of the related Non-Class PO Percentage of
                  the Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Qualified Substitute Mortgage
                  Loans;

                  (b) the product of (x) the then-applicable Subordinate
Prepayment Percentage and (y) related Non-Class PO Percentage of all Principal
Prepayments received in respect of the Group I Mortgage Loans during the related
Prepayment Period;

                  (c) with respect to any Group I Mortgage Loans which were the
subject of a Final Recovery Determination in the related Prepayment Period, the
amount, if any, by which the net Liquidation Proceeds and Insurance Proceeds
allocable to principal in respect of such Group I Mortgage Loans exceed the
amount distributable to the Class AF-1 Certificates, the Class AF-2 Certificates
and the Class PO Certificates pursuant to clause (c) of the definition of "Group
I Senior Principal Distribution Amount" and clause (c) of the definition of
"Class PO Principal Distribution Amount"; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the Group I
Subordinate Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Group I Subordinate Certificates on such immediately preceding
Distribution Date pursuant to Section 4.01 to the extent that any such amounts
are not attributable to Realized Losses that were allocated to the Group I
Subordinate Certificates pursuant to Section 4.04.

                  "Group I Undercollateralized Amount": As to any Distribution
Date and Sub-Group I-A, the excess, if any, of the Certificate Principal
Balances of the Class AF-1 Certificates immediately prior to such Distribution
Date over the sum of (i) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the Group I-A Mortgage Loans plus (ii)
the aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance
of each of the REO Properties in Sub-Group I-A, in each case before reduction
for any Realized Losses on such Distribution Date. As to any Distribution Date
and Sub-Group I-B, the excess, if any, of the Certificate Principal Balances of
the Class AF-2 Certificates immediately prior to such Distribution Date over the
sum of (i) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the Group I-B Mortgage Loans plus (ii) the
aggregate of the Non-Class PO

                                      -27-

<PAGE>

Percentage of the Scheduled Principal Balance of each of the REO Properties in
Sub-Group I-B, in each case before reduction for any Realized Losses on such
Distribution Date.

                  "Group I Undercollateralized Sub-Group": As to any
Distribution Date, either Sub- Group for which a Group I Undercollateralized
Amount greater than zero is calculated.

                  "Group II Bankruptcy Amount": As of any date of determination,
an amount equal to the excess, if any, of (A) $86,529 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Group II Subordinate
Certificates in accordance with Section 4.04.

                  "Group II Certificates": The Class AV-1 Certificates, Class
AV-2 Certificates, Class BV-1 Certificates, Class BV-1 Certificates, Class BV-3
Certificates, Class BV-4 Certificates, Class BV-5 Certificates, Class BV-6
Certificates and Class R-II Certificates.

                  "Group II Class A Principal Adjustment Amount": As to any
Distribution Date on which there is a Group II Undercollateralized Sub-Group and
the balance of the Group II Class A Certificates in the Group II
Overcollateralized Sub-Group has been reduced to zero, the related Group II
Senior Principal Distribution Amount for the Group II Overcollateralized
Sub-Group.

                  "Group II Cross-Collateralization Date": Any Distribution Date
on which there is a Group II Undercollateralized Sub-Group and a Group II
Overcollateralized Sub-Group.

                  "Group II Diverted Interest Amount": With respect to any
Distribution Date, one month's interest accrued during the related Interest
Accrual Period on the Group II Overcollateralized Amount at the Pass-Through
Rate of the Group II Undercollateralized Sub-Group.

                  "Group II Fraud Loss Amount": As of any date of determination
after the Cut-off Date, an amount equal to: (X) prior to the third anniversary
of the Cut-off Date, 1.00% of the aggregate Stated Principal Balance of the
Original Group II Mortgage Loans as of the Cut-off Date (initially $2,893,732)
minus the aggregate amount of Fraud Losses allocated solely to the Group II
Subordinate Certificates in accordance with Section 4.04 since the Cut-off Date
up to such date of determination and (Y) from the third to the fifth anniversary
of the Cut-off Date, an amount equal to (1) the lesser of (a) the Group II Fraud
Loss Amount as of the most recent anniversary of the Cut- off Date and (b) 0.50%
of the aggregate outstanding principal balance of the Group II Mortgage Loans as
of the most recent anniversary of the Cut-off Date minus (2) the Fraud Losses
allocated solely to the Group II Subordinate Certificates in accordance with
Section 4.04 since the most recent anniversary of the Cut-off Date up to such
date of determination. On and after the fifth anniversary of the Cut-off Date
the Group II Fraud Loss Amount shall be zero.

                  "Group II Mortgage Loan": Together, the Group II-A Mortgage
Loans and the Group II-B Mortgage Loans.

                  "Group II Overcollateralized Amount": As to any Distribution
Date, an amount equal to the Group II Undercollateralized Amount for the
unrelated Group II Senior Certificates.

                                      -28-

<PAGE>

                  "Group II Overcollateralized Sub-Group": As to any
Distribution Date, either Sub- Group for which a Group II Overcollateralized
Amount greater than zero is calculated.

                  "Group II Prepayment Crosscollateralization Date": Any
Distribution Date prior to April 2010, in which one Group II Senior Certificate
is retired and the other Group II Senior Certificate remains outstanding.

                  "Group II Senior Certificates": The Class AV-1 Certificates
and the Class AV-2 Certificates.

                  "Group II Senior Percentage": The Group II-A Senior Percentage
or the Group II-B Senior Percentage, as applicable.

                  "Group II Senior Prepayment Percentage": With respect to any
Distribution Date and the Class AV-1 Certificates within the range indicated
below, the percentage as indicated below:

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
April 2001 through March 2006                           100%

April 2006 through March 2007                           Group II-A Senior Percentage plus 70% of the Group
                                                        II-A Subordinate Percentage

April 2007 through March 2008                           Group II-A Senior Percentage plus 60% of the Group
                                                        II-A Subordinate Percentage

April 2008 through March 2009                           Group II-A Senior Percentage plus 40% of the Group
                                                        II-A Subordinate Percentage

April 2009 through March 2010                           Group II-A Senior Percentage plus 20% of the Group
                                                        II-A Subordinate Percentage

April 2010 and thereafter                               Group II-A Senior Percentage
</TABLE>

                  With respect to any Distribution Date and the Class AF-2
Certificates within the range indicated below, the percentage as indicated
below:

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
April 2001 through March 2006                           100%

April 2006 through March 2007                           Group II-A Senior Percentage plus 70% of the Group
                                                        II-A Subordinate Percentage

April 2007 through March 2008                           Group II-A Senior Percentage plus 60% of the Group
                                                        II-A Subordinate Percentage

April 2008 through March 2009                           Group II-A Senior Percentage plus 40% of the Group
                                                        II-A Subordinate Percentage

                                      -29-

<PAGE>

April 2009 through March 2010                           Group II-A Senior Percentage plus 20% of the Group
                                                        II-A Subordinate Percentage

April 2010 and thereafter                               Group II-A Senior Percentage
</TABLE>

provided, however, no reduction to the related Group II Senior Prepayment
Percentage described above shall be made as of any Distribution Date unless (i)
the outstanding principal balance of the Group II Mortgage Loans delinquent 60
days or more (including REO Properties and Group II Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group II Subordinate
Certificates and (ii) Realized Losses on the Group II Mortgage Loans to date are
less than the then applicable Trigger Amount for the Group II Senior
Certificates.

                  Notwithstanding the above, if on any Distribution Date (a) the
Group II Subordinate Percentage, prior to giving effect to any distributions on
such Distribution Date, equals or exceeds two times the initial Group II
Subordinate Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding paragraph are met, then the Group II Senior Prepayment
Percentage for such Distribution Date will equal 100%, if such Distribution Date
is prior to April 2004, and will equal the related Group II Senior Percentage
for such Distribution Date, if such Distribution Date occurs on or after April
2004.

                  Notwithstanding the foregoing, upon a reduction of the
Certificate Principal Balances of the Group II Senior Certificates to zero, the
Group II Senior Prepayment Percentage will equal 0%. In addition, on any
Distribution Date on which the Group II Senior Percentage for either Class of
Group II Senior Certificates exceeds the initial Group II Senior Percentage for
such Class, the Group II Senior Prepayment Percentage for each Class of Group II
Senior Certificates shall be 100%.

                  "Group II Senior Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:

                  (a) the product of (x) the then-applicable Group II Senior
Percentage and (y) the sum of the following:

                         (i) the aggregate of the principal portions of all
                  Monthly Payments due during the related Due Period in respect
                  of the related Group II Mortgage Loans whether or not
                  received;

                        (ii) the principal portion of all Insurance Proceeds and
                  Liquidation Proceeds (other than amounts described in clause
                  (c) below) received in respect of the related Group II
                  Mortgage Loans during the related Prepayment Period (other
                  than any related Group II Mortgage Loan that was purchased,
                  sold or replaced pursuant to or as contemplated by Section
                  2.03, Section 3.16(c) or Section 9.01 during the related
                  Prepayment Period), net of any portion thereof that represents
                  a

                                      -30-

<PAGE>

                  recovery of principal for which an advance was made by the
                  Master Servicer pursuant to Section 4.03 in respect of a
                  preceding Distribution Date;

                       (iii) the Stated Principal Balance (calculated
                  immediately prior to such Distribution Date) of each related
                  Group II Mortgage Loan that was purchased, sold or replaced
                  pursuant to or as contemplated by Section 2.03, Section
                  3.16(c) or Section 9.01 during the related Prepayment Period;

                        (iv) all REO Principal Amortization collected in respect
                  of any REO Property during the related Prepayment Period; and

                         (v) in connection with the substitution of one or more
                  Qualified Substitute Mortgage Loans for one or more Deleted
                  Mortgage Loans in Loan Group II-A or Loan Group II-B, as
                  applicable, pursuant to Section 2.03 during the related
                  Prepayment Period, the excess, if any, of (A) the aggregate of
                  the Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Deleted Mortgage Loans, net of
                  the aggregate of the principal portions of the Monthly
                  Payments due during the related Prepayment Period (to the
                  extent received from the related Mortgagor or advanced by the
                  Master Servicer and distributed pursuant to Section 4.01 on
                  the Distribution Date in the related Prepayment Period) in
                  respect of each such Deleted Mortgage Loan that was replaced
                  prior to the Distribution Date in the related Prepayment
                  Period, over (B) the aggregate of the Stated Principal
                  Balances (calculated as of the respective dates of
                  substitution) of such Qualified Substitute Mortgage Loans;

                  (b) the product of (x) the then-applicable Group II Senior
Prepayment Percentage and (y) all Principal Prepayments received in respect of
the related Group II Mortgage Loans during the related Prepayment Period;

                  (c) with respect to any related Group II Mortgage Loan which
was the subject of a Final Recovery Determination in the related Prepayment
Period, the least of (a) the then- applicable Group II Senior Prepayment
Percentage multiplied by the net Liquidation Proceeds and Insurance Proceeds
allocable to principal in respect of the related Group II Mortgage Loans and (b)
the then-applicable Group II Senior Percentage multiplied by the Scheduled
Principal Balance of the related Group II Mortgage Loan at the time of such
Final Recovery Determination; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the Group
II Senior Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Class AV-1 Certificates on such immediately preceding Distribution Date
pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses which were allocated to the Group II Subordinate
Certificates pursuant to Section 4.04.

                                      -31-

<PAGE>

                  Notwithstanding the foregoing, on any Distribution Date on
which the balance of the Group II Senior Certificates in the Group II
Overcollateralized Sub-Group has been reduced to zero, the Group II Senior
Principal Distribution Amount for the Group II Senior Certificates in the Group
II Undercollateralized Sub-Group will be increased by the Group II Class A
Principal Adjustment Amount.

                  "Group II Special Hazard Amount": Initially, an amount equal
to $2,893,732. As of each anniversary of the Cut-off Date, an amount equal to
the lesser of (a) the Group II Special Hazard Amount as of the immediately
preceding anniversary of the Cut-off Date minus the aggregate amount of Group II
Special Hazard Losses allocated solely to the Group II Subordinate Certificates
in accordance with Section 4.04 since such immediately preceding anniversary and
(b) the Adjustment Amount (as defined below) as most recently calculated. The
"Adjustment Amount" with respect to each anniversary of the Cut-off Date will be
equal to the greatest of (i) 1.00% multiplied by the aggregate outstanding
principal balance of the Group II Mortgage Loans, (ii) the aggregate outstanding
principal balance of the Group II Mortgage Loans secured by Mortgaged Properties
located in the California postal zip code area in which the highest percentage
of related Group II Mortgage Loans based on outstanding principal balance are
located and (iii) two times the outstanding principal balance of the Group II
Mortgage Loan having the largest outstanding principal balance, in each case as
of such anniversary of the Cut-off Date. After the Certificate Principal
Balances of the Group II Subordinate Certificates are reduced to zero, the Group
II Special Hazard Amount will be zero.

                  "Group II Subordinate Certificate": The Class BV-1
Certificates, Class BV-2 Certificates, Class BV-3 Certificates, Class BV-4
Certificates, Class BV-5 Certificates and Class BV-6 Certificates.

                  "Group II Subordinate Percentage": With respect to the Group
II Subordinate Certificates, the weighted average of the Group II-A Subordinate
Percentage and the Group II-B Subordinate Percentage, weighted based on the
aggregate principal balance of the Scheduled Principal Balances of the related
Group II Mortgage Loans immediately prior to the Distribution Date. On any
Distribution Date after the reduction of the Certificate Principal Balance of
either class of Group II Senior Certificates to zero, the Group II Subordinate
Percentage on such a Distribution Date will be 100% minus the Group II Senior
Percentage for such Distribution Date.

                  "Group II Subordinate Prepayment Percentage": With respect to
any Distribution Date and the Group II Subordinate Certificates, the weighted
average of (i) 100% minus the Group II Senior Prepayment Percentage with respect
to the Class AV-1 Certificates for such Distribution Date, weighted based on the
aggregate principal balance of the Scheduled Principal Balance of the Group II-A
Mortgage Loans and (ii) 100% minus the Group II Senior Prepayment Percentage
with respect to the Class AV-2 Certificates for such Distribution Date, weighted
based on the aggregate principal balance of the Scheduled Principal Balance of
the Group II-B Mortgage Loans.

                  "Group II Subordinate Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:

                                      -32-

<PAGE>

                  (a) the product of (x) the then-applicable Group II
Subordinate Percentage and (y) the sum of the following:

                        (i) the aggregate of the principal portions of all
                  Monthly Payments due during the related Due Period in respect
                  of the Group II Mortgage Loans whether or not received;

                        (ii) the principal portion of all Insurance Proceeds and
                  Liquidation Proceeds (other than amounts described in clause
                  (c) below) received in respect of the Group II Mortgage Loans
                  during the related Prepayment Period (other than any such
                  Group II Mortgage Loan that was purchased, sold or replaced
                  pursuant to or as contemplated by Section 2.03, Section
                  3.16(c) or Section 9.01 during the related Prepayment Period),
                  net of any portion thereof that represents a recovery of
                  principal for which an advance was made by the Master Servicer
                  pursuant to Section 4.03 in respect of a preceding
                  Distribution Date;

                       (iii) the Stated Principal Balance (calculated
                  immediately prior to such Distribution Date) of each Group II
                  Mortgage Loan that was purchased, sold or replaced pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 during the related Prepayment Period;

                        (iv) all REO Principal Amortization collected in respect
                  of any REO Property during the related Prepayment Period in
                  respect of the Group II Mortgage Loans; and

                         (v) in connection with the substitution of one or more
                  Qualified Substitute Mortgage Loans for one or more Deleted
                  Mortgage Loans in Loan Group II-A or Loan Group II-B pursuant
                  to Section 2.03 during the related Prepayment Period, the
                  excess, if any, of (A) the aggregate of the Stated Principal
                  Balances (calculated as of the respective dates of
                  substitution) of such Deleted Mortgage Loans, net of the
                  aggregate of the principal portions of the Monthly Payments
                  due during the related Prepayment Period (to the extent
                  received from the related Mortgagor or advanced by the Master
                  Servicer and distributed pursuant to Section 4.01 on the
                  Distribution Date in the related Prepayment Period) in respect
                  of each such Deleted Mortgage Loan that was replaced prior to
                  the Distribution Date in the related Prepayment Period, over
                  (B) the aggregate of the Stated Principal Balances (calculated
                  as of the respective dates of substitution) of such Qualified
                  Substitute Mortgage Loans;

                  (b) the product of (x) the then-applicable Group II
Subordinate Prepayment Percentage and (y) all Principal Prepayments received in
respect of the Group II Mortgage Loans during the related Prepayment Period;

                  (c) with respect to any Group II Mortgage Loans which were the
subject of a Final Recovery Determination in the related Prepayment Period, the
amount, if any, by which the

                                      -33-

<PAGE>

net Liquidation Proceeds and Insurance Proceeds allocable to principal in
respect of such Group II Mortgage Loans exceed the amount distributable to the
Group II Senior Certificates pursuant to clause (c) of the definition of "Group
II Senior Principal Distribution Amount"; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the Group
II Subordinate Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Group II Subordinate Certificates on such immediately preceding
Distribution Date pursuant to Section 4.01 to the extent that any such amounts
are not attributable to Realized Losses that were allocated to the Group II
Subordinate Certificates pursuant to Section 4.04.

                  "Group II Undercollateralized Amount": As to any Distribution
Date and Sub-Group II-A, the excess, if any, of the Certificate Principal
Balances of the Class AV-1 Certificates immediately prior to such Distribution
Date over the sum of (i) the aggregate of the Scheduled Principal Balance of
each of the Group II-A Mortgage Loans plus (ii) the aggregate of the Scheduled
Principal Balance of each of the REO Properties in Sub-Group II-A, in each case
before reduction for any Realized Losses on such Distribution Date. As to any
Distribution Date and Sub-Group II-B, the excess, if any, of the Certificate
Principal Balances of the Class AV-2 Certificates immediately prior to such
Distribution Date over the sum of (i) the aggregate of the Scheduled Principal
Balance of each of the Group II-B Mortgage Loans plus (ii) the aggregate of the
Scheduled Principal Balance of each of the REO Properties in Sub-Group II-B, in
each case before reduction for any Realized Losses on such Distribution Date.

                  "Group II Undercollateralized Sub-Group": As to any
Distribution Date, either Sub-Group for which a Group II Undercollateralized
Amount greater than zero is calculated.

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

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
the either REMIC I or REMIC II within the meaning of Section 856(d)(3) of the
Code if either REMIC I or REMIC II were a real estate investment trust (except
that the ownership tests set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35% or more of any Class of
Certificates), so long as either REMIC I or REMIC II does not receive or derive
any income from such Person and provided that the relationship between such
Person and the Trust Fund is at

                                      -34-

<PAGE>

arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the
Trustee has received an Opinion of Counsel to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be taken by an
Independent Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.

                  "Index": With respect to any Group II Mortgage Loan, the index
for the adjustment of the Mortgage Rate set forth as such on the related
Mortgage Note.

                  "Initial Rate Cap": With respect to each Group II Mortgage
Loan, the maximum increase or decrease in the Mortgage Rate on the first
Adjustment Date as provided in the related Mortgage Note.

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

                  "Interest Accrual Period": With respect to any Distribution
Date and any Class of Regular Certificates (other than the Class PO
Certificates), the one-month period ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs.

                  "Interest Distribution Amount": With respect to any Class of
Regular Certificates (other than the Class PO Certificates) for any Distribution
Date, an amount equal to one month's interest accrued during the most recently
ended Interest Accrual Period at the applicable Pass- Through Rate on the
Certificate Principal Balance or Notional Amount thereof immediately prior to
such Distribution Date. The Class PO Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
The Interest Distribution Amount for any Class of Regular Certificates (a) will
also include, in the case of any Distribution Date subsequent to the initial
Distribution Date, the excess, if any, of the Interest Distribution Amount in
respect of such Certificates for the immediately preceding Distribution Date,
over the aggregate distributions of interest made in respect of such
Certificates pursuant to Section 4.01(a) on such immediately preceding
Distribution Date, and (b) will be reduced, in the case of any Distribution
Date, by the amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 3.24) and Relief
Act Interest Shortfalls that were allocated to such Certificates on such
Distribution Date pursuant to Section 1.02. The Interest Distribution Amount for
any Class of Certificates will be based on a 360 day year consisting of twelve
30 day Interest Accrual Periods.

                                      -35-

<PAGE>

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

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

                  "Liquidation Proceeds": The amount (including any Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.

                  "Loan Group": Any of Loan Group I-A, Loan Group I-B, Loan
Group II-A or Loan Group II-B.

                  "Loan Group I-A": The Loan Group consisting of the Group I-A
Mortgage Loans. With respect to the Class AF-1 Certificates, Loan Group I-A is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.

                  "Loan Group I-B": The Loan Group consisting of the Group I-B
Mortgage Loans. With respect to the Class AF-2 Certificates, Loan Group I-B is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.

                  "Loan Group II-A": The Loan Group consisting of the Group II-A
Mortgage Loans. With respect to the Class AV-1 Certificates, Loan Group II-A is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.

                  "Loan Group II-B": The Loan Group consisting of the Group II-B
Mortgage Loans. With respect to the Class AV-2 Certificates, Loan Group II-B is
sometimes referred to

                                      -36-

<PAGE>

herein as the related Loan Group and the Mortgage Loans in such Loan Group are
sometimes referred to herein as the related Mortgage Loans.

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

                  "Master Servicer": Union Planters PMAC, Inc. or any successor
master servicer appointed as herein provided, in its capacity as Master Servicer
hereunder.

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

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, 12:00 p.m. New York time on the third Business Day preceding
the related Distribution Date.

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

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

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

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

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

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

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

                                      -37-

<PAGE>

                  "Mortgage Loan Remittance Rate": With respect to any Mortgage
Loan or REO Property, as of any date of determination, the then applicable Net
Mortgage Rate in respect thereof.

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

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

                  (ii) the Mortgagor's name;

                  (iii) the street address of the Mortgaged Property including
the state and zip code;

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

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

                  (vi) the original months to maturity;

                  (vii) the original date of the mortgage;

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

                  (ix) the Mortgage Rate;

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

                  (xi) the stated maturity date;

                  (xii) the amount of the Monthly Payment as of the Cut-off
Date;

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

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

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

                  (xvi) a code indicating the purpose of the Mortgage Loan
(I.E., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

                                      -38-

<PAGE>

                  (xvii) a code indicating if the Mortgage Loan is subject to a
Primary Mortgage Insurance Policy;

                  (xviii) the Value of the Mortgaged Property;

                  (xix) the actual unpaid principal balance of the Mortgage Loan
as of the Cut-off Date;

                  (xx) the Class PO Percentage;

                  (xxi) the Loan Group;

                  (xxii) with respect to each Group II Mortgage Loan, the Gross
Margin;

                  (xxiii) with respect to each Group II Mortgage Loan, the
Maximum Mortgage Rate;

                  (xxiv) with respect to each Group II Mortgage Loan, the
Minimum Mortgage Rate;

                  (xxv) with respect to each Group II Mortgage Loan, the
Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate
adjustment;

                  (xxvi) with respect to each Group II Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;

                  (xxvii) a code indicating the documentation program; and

                  (xxviii) the risk grade.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
Scheduled Principal Balance of the Mortgage Loans as of the close of business on
the Cut-off Date (not taking into account any Principal Prepayments received on
the Cut-off Date); and (6) the amount of the Monthly Payment as of the Cut-off
Date. The Mortgage Loan Schedule shall be amended from time to time by the
Depositor in accordance with the provisions of this Agreement. With respect to
any Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.

                  "Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan; provided, however,
that with respect to a

                                      -39-

<PAGE>

Mortgage Loan on a Mortgaged Property located in the State of Texas, the
Mortgage Note may read "Renewal and Extension."

                  "Mortgage Pool": The pool of Mortgage Loans consisting of Loan
Group I-A , Loan Group I-B, Loan Group II-A and Loan Group II-B, identified on
Schedule 1 from time to time, and any REO Properties acquired in respect
thereof.

                  "Mortgage Rate": With respect to each Group I Mortgage Loan,
the annual rate at which interest accrues on such Mortgage Loan from time to
time in accordance with the provisions of the related Mortgage Note, without
regard to any reduction thereof as a result of a Debt Service Reduction or
operation of the Relief Act. With respect to each Group II Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate.
With respect to each Mortgage Loan that becomes an REO Property, as of any date
of determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor":  The obligor on a Mortgage Note.

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

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

                  "Non-Class PO Percentage": With respect to each Class IO
Mortgage Loan, 100%. With respect to each Class PO Mortgage Loan, 100% less the
Class PO Percentage.

                                      -40-

<PAGE>

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

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

                  "Notional Amount": For any Distribution Date, with respect to
the Class IO Certificates, the aggregate Stated Principal Balance of the Group I
Mortgage Loans for such Distribution Date.

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

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

                  "Original Group I Mortgage Loan": Any Mortgage Loan included
in Loan Group I-A or Loan Group I-B as of the Closing Date.

                  "Original Group II Mortgage Loan": Any Mortgage Loan included
in Loan Group II-A or Loan Group II-B as of the Closing Date.

                  "Original Mortgage Loan": Any of the Mortgage Loans included
in the Trust Fund as of the Closing Date.

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

                  "Pass-Through Rate": With respect to any Group I Certificate
(other than the Class IO Certificates and the Class PO Certificates) for any
Distribution Date, 7.000% per annum. With respect to the Class IO Certificates,
for any Distribution Date, the Weighted Average Stripped Interest Rate for such
Distribution Date. The Class PO Certificates shall have a Pass-Through Rate of
0.000% per annum and shall not be entitled to any distributions of interest.
With respect to any Class AV-1 Certificate, the Weighted Average Net Mortgage
Rate

                                      -41-

<PAGE>

of the Group II-A Mortgage Loans. With respect to any Class AV-2 Certificate,
the Weighted Average Net Mortgage Rate of the Group II-B Mortgage Loans. With
respect to any Group II Subordinate Certificates, prior to a Group II Prepayment
Crosscollateralization Date, the Weighted Average Net Mortgage Rate of the Group
II Mortgage Loans. With respect to any Group II Subordinate Certificates, after
a Group II Prepayment Crosscollateralization Date, for such Distribution Date,
the lesser of (a) the Weighted Average Net Mortgage Rate of the Group II-A
Mortgage Loans or (b) the Weighted Average Net Mortgage Rate of the Group II-B
Mortgage Loans.

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

                  "Percentage Interest": With respect to any Class of
Certificates, the portion of the respective Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the initial Certificate
Principal Balance or Notional Amount represented by such Certificate, and the
denominator of which is the initial aggregate Certificate Principal Balance or
Notional Amount of all of the Certificates of such Class. The Book-Entry
Certificates are issuable only in Percentage Interests corresponding to initial
Certificate Principal Balances of $100,000 and integral multiples of $1.00 in
excess thereof. The Class PO Certificates, Class IO Certificates and the
Subordinate Certificates are issuable only in Percentage Interests corresponding
to the initial Certificate Principal Balances or Notional Amounts of $100,000
and integral multiples of $1,000 in excess thereof; provided, however, that a
single Certificate of each such Class of Certificates may be issued having a
Percentage Interest corresponding to the remainder of the aggregate initial
Certificate Principal Balance or Notional Amount of such Class or to an
otherwise authorized denomination for such Class plus such remainder. The
Residual Certificates are issuable only in Percentage Interests of 20% and
multiples thereof.

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

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

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

                                      -42-

<PAGE>

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

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

                  (v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition thereof) that
is rated by each Rating Agency in its highest short-term unsecured debt rating
available at the time of such investment;

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

                  (vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each Rating Agency as a permitted investment
of funds backing securities having ratings equivalent to its highest initial
rating of the Senior Certificates; provided, however, that no instrument
described hereunder shall evidence either the right to receive (a) only interest
with respect to the obligations underlying such instrument or (b) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provide a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations.

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

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.03.

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

                  "Prepayment Assumption": With respect to the Group I Mortgage
Loans, a prepayment rate of 16% CPR. With respect to the Group II Mortgage
Loans, a prepayment rate

                                      -43-

<PAGE>

of 22% CPR. The Prepayment Assumption is used solely for determining the accrual
of original issue discount on the Certificates for federal income tax purposes.
A CPR (or Constant Prepayment Rate) represents an annualized constant assumed
rate of prepayment each month of a pool of mortgage loans relative to its
outstanding principal balance for the life of such pool.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full or in part that was applied
by the Master Servicer to reduce the outstanding principal balance of such loan
on a date preceding the Due Date in the succeeding Prepayment Period, an amount
equal to interest at the applicable Mortgage Loan Remittance Rate on the amount
of such Principal Prepayment for the number of days commencing on the date on
which the prepayment is applied and ending on the last day of the related
Prepayment Period. The obligations of the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.24.

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

                  "Primary Mortgage Insurance Policy": Each primary policy of
mortgage guaranty insurance in effect as represented in the Mortgage Loan
Purchase Agreement and as so indicated on the Mortgage Loan Schedule, or any
replacement policy therefor obtained by the Master Servicer or any Sub-Servicer
pursuant to Section 3.13. Any Mortgage Loan which has a Primary Mortgage
Insurance Policy is set forth on Schedule 2 attached hereto.

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

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of: (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Mortgage Loan
Remittance Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
Master Servicer, which payment or advance had as of the date of purchase been
distributed pursuant to Section 4.01, through the end of the calendar month in
which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Mortgage
Loan Remittance Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
Master Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in

                                      -44-

<PAGE>

which such purchase is to be effected, minus the total of all net rental income,
Insurance Proceeds, Liquidation Proceeds and P&I Advances that as of the date of
purchase had been distributed as or to cover REO Imputed Interest pursuant to
Section 4.01; (iii) any unreimbursed Servicing Advances and P&I Advances and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property; (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Sections 3.11(a)(ix) and Section
3.16(b); and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Master Servicer or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.

                  "Qualified Insurer": Any insurer which meets the requirements
of Fannie Mae and Freddie Mac.

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) be covered under a Primary Mortgage
Insurance Policy if such Qualified Substitute Mortgage Loan has a Loan-to-Value
Ratio in excess of 80% and the Deleted Mortgage Loan was covered by a Primary
Mortgage Insurance Policy, (iv) have a remaining term to maturity not greater
than (and not more than one year less than) that of the Deleted Mortgage Loan,
(v) have the same Due Date as the Due Date on the Deleted Mortgage Loan, (vi)
have a Loan-to-Value Ratio as of the date of substitution equal to or lower than
the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vii) with
respect to each Group II Mortgage Loan, have a Maximum Mortgage Rate not less
than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (viii) with respect
to each Group II Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (ix) with respect to each
Group II Mortgage Loan, have a Gross Margin equal to the Gross Margin of the
Deleted Mortgage Loan, (x) with respect to each Group II Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, ; and (xi) conform to each representation and
warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Mortgage Loan. In the event that one or more mortgage
loans are substituted for one or more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Mortgage Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Rates, the terms described
in clause (iv) shall be determined on the basis of weighted average remaining
terms to maturity, the Loan-to-Value Ratios described in clause (vi) hereof
shall be satisfied as to each such mortgage loan; provided that no Mortgage Loan
have a maturity date after the "latest possible maturity date" identified in the
Preliminary Statement and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (viii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

                                      -45-

<PAGE>

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than $1,000 in excess of the existing first
mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
$1,000) to satisfy the then existing first mortgage loan and any subordinate
mortgage loan of the Mortgagor on the related Mortgaged Property and to pay
related closing costs.

                  "Rating Agency": S&P and Fitch or their successors. If such
agencies or their successors are no longer in existence, the "Rating Agencies"
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which designation
shall be given to the Trustee and Master Servicer. References herein to "the
Rating Agency" shall be deemed to refer to both Rating Agencies, as the context
may require.

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)
the proceeds, if any, received in respect of such Mortgage Loan prior to the
date such Final Recovery Determination was made, net of amounts that are payable
therefrom to the Master Servicer with respect to such Mortgage Loan pursuant to
Section 3.11(a)(iii)(A) and (B).

                  With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of either REMIC I or REMIC II, plus
(ii) accrued interest from the Due Date as to which interest was last paid by
the Mortgagor in respect of the related Mortgage Loan through the calendar month
in which such Final Recovery Determination was made, calculated in the case of
each calendar month during such period (A) at an annual rate equal to the annual
rate at which interest was then accruing on the related Mortgage Loan and (B) on
a principal amount equal to the Stated Principal Balance of the related Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, plus (iii) any amounts previously withdrawn from the Collection Account
in respect of the related Mortgage Loan pursuant to Section 3.11(a)(ix) and
Section 3.16(b), minus (iv) the aggregate of all P&I Advances and Servicing
Advances made by the Master Servicer in respect of such REO Property or the
related Mortgage Loan and any unpaid Servicing Fees for which the Master
Servicer has been or, in connection with such Final Recovery Determination, will
be reimbursed pursuant to Section 3.11(a)(iii)(A) or (B) or Section 3.23 out of
rental income, Insurance Proceeds and Liquidation Proceeds received in respect
of such REO Property, minus (v) the total of all net rental income, Insurance
Proceeds and

                                      -46-

<PAGE>

Liquidation Proceeds received in respect of such REO Property that has been, or
in connection with such Final Recovery Determination, will be transferred to the
Distribution Account pursuant to Section 3.23.

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

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

                  "Record Date": With respect to each Distribution Date and
Certificate, the last Business Day of the month immediately preceding the month
in which such Distribution Date occurs.

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

                  "Regular Certificate": Any Group I Senior Certificate, Class
IO Certificate, Class PO Certificate, Group I Subordinate Certificate, Group II
Senior Certificate or Group II Subordinate Certificate.

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

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

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

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Group I Mortgage Loans as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof; (ii) any REO Property, together with
all collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Group I Mortgage Loans under all insurance policies required to
be maintained pursuant to this Agreement and any

                                      -47-

<PAGE>

proceeds thereof; (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement with respect to the Group I Mortgage Loans (including any security
interests created thereby and excluding Section 17 thereof); and (v) the
Collection Account, the Distribution Account and any REO Account relating to the
Group I Mortgage Loans and such assets that are deposited therein from time to
time and any investments thereof, together with any and all income, proceeds and
payments with respect thereto. Notwithstanding the foregoing, however, REMIC I
specifically excludes all payments and other collections of principal and
interest due on the Group I Mortgage Loans on or before the Cut-off Date.

                  "REMIC II": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Group II Mortgage Loans as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof; (ii) any REO Property, together with
all collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Group II Mortgage Loans under all insurance policies required to
be maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement with respect to
the Group II Mortgage Loans (including any security interests created thereby
and excluding Section 17 thereof); and (v) the Collection Account, the
Distribution Account and any REO Account relating to the Group II Mortgage Loans
and such assets that are deposited therein from time to time and any investments
thereof, together with any and all income, proceeds and payments with respect
thereto. Notwithstanding the foregoing, however, REMIC II specifically excludes
all payments and other collections of principal and interest due on the Group II
Mortgage Loans on or before the Cut-off Date.

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

                  "Remittance Report": A report in form and substance acceptable
to the Trustee prepared by the Master Servicer pursuant to Section 4.03 with
such additions, deletions and modifications as agreed to by the Trustee and the
Master Servicer.

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

                  "REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.

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

                                      -48-

<PAGE>

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

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and P&I Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

                  "Request for Release": A release signed by a Servicing
Officer, or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer, in the form of
Exhibit E attached hereto.

                  "Residential Dwelling": Any one of the following: (i) an
attached or detached one-family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium
project, or (iv) a detached one-family dwelling in a planned unit development,
none of which is a co-operative, mobile or manufactured home (as defined in 42
United States Code, Section 5402(6)).

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

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

                  "Responsible Officer": When used with respect to the Trustee,
the President, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer, any trust
officer or assistant trust officer, the Controller and any assistant controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and, with respect to a
particular matter, to

                                      -49-

<PAGE>

whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of such REO Property for all previously ended calendar months; and (b)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such REO Property, zero.

                  "Seller": Union Planters Bank, National Association or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.

                  "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property,
and (iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The Master Servicer
shall not be required to make any Servicing Advance in respect of a Mortgage
Loan or REO

                                      -50-

<PAGE>

Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

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

                  "Servicing Fee Rate": With respect to the Group I Mortgage
Loans a rate equal to 0.25% per annum. With respect to the Group II Mortgage
Loans a rate equal to 0.375% per annum

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

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

                  "Special Hazard Loss": Any Realized Loss or portion thereof
not in excess of the lesser of the cost of repair or replacement of a Mortgaged
Property suffered by such Mortgaged Property by reason of damage caused by
certain hazards (including earthquakes, mudflows, and, to a limited extent,
floods) not insured against under the hazard insurance policies or fire or flood
insurance policies required to be maintained in respect of such Mortgaged
Property pursuant to Section 3.14, or by reason of the application of any
co-insurance provision. Special Hazard Losses shall not include any
Extraordinary Loss or any of the following:

                  (i) wear and tear, deterioration, rust or corrosion, mold, wet
or dry rot; inherent vice or latent defect; animals, birds, vermin, insects;

                  (ii) smog, smoke, vapor, liquid or dust discharge from
agricultural or industrial operations; pollution; contamination;

                  (iii) settling, subsidence, cracking, shrinkage, bulging or
expansion of pavements, foundations, walls, floors, roofs or ceilings; and

                                      -51-

<PAGE>

                  (iv) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then only for
the ensuing loss.

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

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

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer and distributed pursuant to Section 4.01 on
or before such date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16, to the extent distributed pursuant to
Section 4.01 on or before such date of determination, and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the sum of (I) if such REO
Property was acquired before the Distribution Date in any calendar month, the
principal portion of the Monthly Payment due on the Due Date in the calendar
month of acquisition, to the extent advanced by the Master Servicer and
distributed pursuant to Section 4.01 on or before such date of determination, to
the extent distributed pursuant to Section 4.01 on or before such date of
determination, and (II) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

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

                                      -52-

<PAGE>

                  "Stripped Interest Rate": With respect to any Group I Mortgage
Loan or related REO Property, the excess, if any, of the Net Mortgage Rate minus
7.000% per annum.

                  "Subordinate Certificates": Together, the Group I Subordinate
Certificates and the Group II Subordinate Certificates.

                  "Sub-Group": Any of Sub-Group I-A, Sub-Group I-B, Sub-Group
II-A or Sub- Group II-A.

                  "Sub-Group I-A": The Sub-Group consisting of the Group I-A
Mortgage Loans. With respect to the Class AF-1 Certificates, Sub-Group I-A is
sometimes referred to herein as the related Sub-Group and the Mortgage Loans in
such Sub-Group are sometimes referred to herein as the related Mortgage Loans.

                  "Sub-Group I-B": The Sub-Group consisting of the Group I-B
Mortgage Loans. With respect to the Class AF-2 Certificates, Sub-Group I-B is
sometimes referred to herein as the related Sub-Group and the Mortgage Loans in
such Sub-Group are sometimes referred to herein as the related Mortgage Loans.

                  "Sub-Group II-A": The Sub-Group consisting of the Group II-A
Mortgage Loans. With respect to the Class AV-1 Certificates, Sub-Group II-A is
sometimes referred to herein as the related Sub-Group and the Mortgage Loans in
such Sub-Group are sometimes referred to herein as the related Mortgage Loans.

                  "Sub-Group II-B": The Sub-Group consisting of the Group II-B
Mortgage Loans. With respect to the Class AV-2 Certificates, Sub-Group II-B is
sometimes referred to herein as the related Sub-Group and the Mortgage Loans in
such Sub-Group are sometimes referred to herein as the related Mortgage Loans.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I and REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other

                                      -53-

<PAGE>

information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

                  "Termination Price": As defined in Section 9.01.

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

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

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

                  "Trigger Amount": With respect to the Group I Senior
Certificates and any Distribution Date, the Trigger Amount occurring after the
first five years will be as follows: for any Distribution Date during the sixth
year after the Closing Date, 30% of the initial sum of the Certificate Principal
Balances of the Group I Subordinate Certificates; for any Distribution Date
during the seventh year after the Closing Date, 35% of the initial sum of the
Certificate Principal Balances of the Group I Subordinate Certificates; for any
Distribution Date during the eighth year after the Closing Date, 40% of the
initial sum of the Certificate Principal Balances of the Group I Subordinate
Certificates; for any Distribution Date during the ninth year after the Closing
Date, 45% of the initial sum of the Certificate Principal Balances of the Group
I Subordinate Certificates; and for any Distribution Date during the tenth year
(or any year thereafter) after the Closing Date, 50% of the initial sum of the
Certificate Principal Balances of the Group I Subordinate Certificates.

                  With respect to the Group II Senior Certificates and any
Distribution Date, 30% of the initial sum of the Certificate Principal Balances
of the Group II Subordinate Certificates.

                  "Trust Fund": Collectively, all of the assets of REMIC I and
REMIC II.

                  "Trustee": Wells Fargo Bank Minnesota, National Association,
or its successor in interest, or any successor trustee appointed as herein
provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder. The
Trustee Fee shall be an amount equal to interest or investment income earned on
funds deposited in the Distribution Account.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.

                                      -54-

<PAGE>

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any State thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations), or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States Persons have the authority to control all
substantial decisions of the trust. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

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

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, (i) 98% of all of the Voting Rights shall be allocated
to the Regular Certificates, other than the Class IO Certificates, in proportion
to their then outstanding Certificate Principal Balances, (ii) 1% of all of the
Voting Rights shall be allocated to the Class IO Certificates, in proportion to
their then outstanding Notional Amounts, and (iii) 1/2 of 1% of all Voting
Rights will be allocated among the holders of each Class of Residual
Certificates, in proportion to their Percentage Interests in each such Class.
All Voting Rights allocated to any Class of Certificates shall be allocated
among such Certificates PRO RATA in accordance with the respective Percentage
Interests evidenced thereby.

                  "Weighted Average Net Mortgage Rate": As of any date of
determination, the weighted average of the Net Mortgage Rates on the Group II
Mortgage Loans, weighed on the basis of the Stated Principal Balance of the
Group II Mortgage Loans.

                  "Weighted Average Stripped Interest Rate": With respect to any
Distribution Date, the weighted average of the Stripped Interest Rates in effect
during the most recently ended calendar month for the Group I Mortgage Loans and
REO Properties based on the respective Scheduled Principal Balances thereof as
of the Due Date in such most recently ended calendar month (or, in the case of
the initial Distribution Date, as of the Cut-off Date).

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
3.24) and any Relief Act Interest Shortfall incurred in respect of the Group I
Mortgage Loans for any Distribution Date shall be allocated among the Group I
Certificates (other than the Class PO Certificates), PRO RATA in accordance
with, and to the extent of one month's interest at the Pass-Through Rate on the

                                      -55-

<PAGE>

respective Certificate Principal Balance or Notional Amount of such Certificate
immediately prior to such Distribution Date.

                  The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
3.24) and any Relief Act Interest Shortfall incurred in respect of the Group II
Mortgage Loans for any Distribution Date shall be allocated among the Group II
Certificates, PRO RATA in accordance with, and to the extent of one month's
interest at the Pass-Through Rate on the respective Certificate Principal
Balance of such Certificate immediately prior to such Distribution Date.

                                      -56-

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01.             Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 17 thereof), and all other
assets included or to be included in the Trust Fund. Such assignment includes
all interest and principal received by the Depositor or the Master Servicer on
or with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan
Purchase Agreement.

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

                  (i) the original Mortgage Note, endorsed by the originator or
the originator's successor in interest (which in all cases will be the Seller or
an Affiliate) in the following form: "Pay to the order of Wells Fargo Bank
Minnesota, N.A., as Trustee under the applicable agreement, without recourse",
or with respect to any lost Mortgage Note, an original Lost Note Affidavit
stating that the original mortgage note was lost, misplaced or destroyed,
together with a copy of the related mortgage note; provided, however, that such
substitutions of Lost Note Affidavits for original Mortgage Notes may occur only
with respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance of
which is less than or equal to 2.00% of the Pool Balance as of the Cut-off Date;

                  (ii) if in connection with any Mortgage Loan, the Depositor
has not caused the original recorded Mortgage or power of attorney to be
delivered to the Trustee because of a delay caused by the public recording
office where such Mortgage or power of attorney has been delivered for
recordation or because such Mortgage or power of attorney has been lost or
because such public recording office retains the original recorded Mortgage or
power of attorney, the Mortgage File shall include, in lieu of such Mortgage or
power of attorney, a photocopy of such Mortgage or power of attorney, together
with (a) in the case of a delay caused by the public recording office, an
Officer's Certificate of the title insurer insuring the Mortgage stating that
such Mortgage and power of attorney has been delivered to the appropriate public
recording office for recordation and that the original recorded Mortgage or
power of attorney or a copy of such Mortgage and power of attorney certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage and power of attorney will be promptly delivered to the
Trustee upon receipt by the Depositor; or (b) in the case where a public
recording office retains the original recorded Mortgage or power of attorney or
in the case where a Mortgage or power of attorney is lost after recordation

                                      -57-

<PAGE>

in a public recording office, a copy of such Mortgage or power of attorney with
the recording information thereon certified by such public recording office to
be a true and complete copy of the original recorded Mortgage or power of
attorney;

                  (iii) an original Assignment of the Mortgage executed by the
originator or the originator's successor in interest (which in all cases will be
the Seller or an Affiliate) in the following form: "Wells Fargo Bank Minnesota,
N.A., as Trustee under the applicable agreement";

                  (iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to the
Person assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), or if any such intervening assignment has not been
returned from the applicable public recording office or has been lost or if such
public recording office retains the original recorded Assignments of Mortgage,
the Mortgage File shall include a photocopy of such intervening assignment,
together with (a) in the case of a delay caused by the public recording, an
Officer's Certificate of the title insurer insuring the Mortgage stating that
such intervening Assignment of Mortgage has been delivered to the appropriate
public recording office for recordation and that such original recorded
intervening Assignment of Mortgage or a copy of such intervening Assignment of
Mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening Assignment of Mortgage will
be promptly delivered to the Trustee upon receipt thereof by the Depositor; or
(b) in the case of an intervening Assignment of Mortgage where a public
recording office retains the original recorded intervening Assignment of
Mortgage or in the case where an intervening Assignment of Mortgage is lost
after recordation in a public recording office, a copy of such intervening
Assignment with recording information thereon certified by such public recording
office to be a true and complete copy of the original recorded intervening
Assignment of Mortgage;

                  (v) the originals of all assumption, modification,
consolidation or extension agreements, if any;

                  (vi) the original of any guarantee executed in connection with
the Mortgage Note;

                  (vii) if such Mortgage Loan has a Loan-to-Value Ratio at the
Cut-off Date in excess of 80% (as shown in the Mortgage Loan Schedule), the
original Primary Insurance Policy, or in the event such original Primary
Insurance Policy is unavailable, a written commitment from the mortgage insurer
to issue such policy;

                  (viii) the original lender's title insurance policy, together
with all endorsements or riders which were issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a first lien
on the Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is unavailable, a written
commitment or uniform binder or preliminary report of title issued by the title
insurance or escrow company or an attorney's title opinion, if customary in the
related jurisdiction where the Mortgaged Property is located;

                                      -58-

<PAGE>

                  (ix) the original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage; and

                  (x) (A) the power of attorney pursuant to which the Master
Servicer is authorized to act on behalf of Jefferson Heritage Bank or (B) if
necessary, a true and complete copy, certified as such by an officer of the
Seller, of each certificate or other evidence of merger or change of name, if
any of the Mortgage Loans were acquired by the Seller by merger or acquired or
originated by the Seller while conducting business under a name other than its
present name and such certificate or other evidence shall not have been recorded
in the public recording office where the related Mortgage is required to be
recorded.

                  Notwithstanding the foregoing, the parties hereto acknowledge
that on the Closing Date, the Depositor will deliver to, and deposit with, the
Trustee, the Mortgage Note and will deliver the remaining contents of each
Mortgage File within 60 days following the Closing Date.

                  The Trustee agrees to execute and deliver to the Depositor on
or prior to the Closing Date an acknowledgment of receipt of the original
Mortgage Note (with any exceptions noted), substantially in the form attached as
Exhibit C-3 hereto.

                  The Master Servicer shall enforce the obligations of the
Seller under the Mortgage Loan Purchase Agreement to cause all Assignments
referred to in Section 2.01(iii) hereof and, to the extent necessary, in Section
2.01(iv) hereof to be recorded; provided, however, the Seller need not cause to
be recorded any Assignment which relates to a Mortgage Loan in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel delivered by the
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee' s interest in the related
Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, the Master Servicer shall enforce the obligations of the Seller under
the Mortgage Loan Purchase Agreement to submit each Assignment for recording, at
no expense to the Trust Fund or Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02
hereof, (v) with respect to any one Assignment the occurrence of a foreclosure
relating to the Mortgagor under the related Mortgage and (vi) on or after the
90th day on which the payment for such Mortgage Loan was due and payable and not
received. Notwithstanding the foregoing, if the Seller fails to pay the cost of
recording the Assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust. The Master Servicer
shall furnish the Trustee, or its designated agent, with a copy of each
Assignment submitted for recording. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Master Servicer
shall cause the Seller to promptly have a substitute Assignment prepared or have
such defect cured, as the case may be, and thereafter cause each such Assignment
to be duly recorded.

                  The Depositor shall deliver or cause to be delivered to the
Trustee promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with

                                      -59-

<PAGE>

respect to any Mortgage Loan, including, but not limited to, any original
documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan.

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

                  SECTION 2.02.             Acceptance of the Trust Fund by the
                                            Trustee.

                  Subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review, or that it has reviewed pursuant to Section 2.01 each Mortgage File
on or prior to the Closing Date, with respect to each Mortgage Loan (or, with
respect to any document delivered after the Startup Day, within 90 days of
receipt and with respect to any Qualified Substitute Mortgage, within 90 days
after the assignment thereof). The Trustee further agrees, for the benefit of
the Certificateholders, to certify in substantially the form attached hereto as
Exhibit C-1, within 90 days following the date on which the Trustee receives the
remaining contents of each Mortgage File from the Depositor, with respect to
each Mortgage Loan (or, with respect to any document delivered after the Startup
Day, within 90 days of receipt and with respect to any Qualified Substitute
Mortgage, within 90 days after the assignment thereof) that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), (i) all documents
required to be delivered to it pursuant Section 2.01 of this Agreement are in
its possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i), (ii), (iii) and (xiv) of
the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee is under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable, or appropriate for the represented purpose or that they
have actually been recorded or that they are other than what they purport to be
on their face.

                                      -60-

<PAGE>

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Trustee shall so notify the Depositor and the Master Servicer. In
addition, upon the discovery by the Depositor or the Master Servicer (or upon
receipt by the Trustee of written notification of such breach) of a breach of
any of the representations and warranties made by the Seller in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties to this Agreement.

                  The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.

                  SECTION 2.03.             Repurchase or Substitution of
                                            Mortgage Loans by the Seller.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the Seller
and the Master Servicer of such defect, missing document or breach and request
that the Seller deliver such missing document or cure such defect or breach
within 90 days from the date the Seller was notified of such missing document,
defect or breach, and if the Seller does not deliver such missing document or
cure such defect or breach in all material respects during such period, the
Trustee shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to repurchase such Mortgage Loan from the Trust Fund at the
Purchase Price within 90 days after the date on which the Seller was notified
(subject to Section 2.03(e)) of such missing document, defect or breach, if and
to the extent that the Seller is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
furnish to it and as shall be necessary

                                      -61-

<PAGE>

to vest in the Seller any Mortgage Loan released pursuant hereto, and the
Trustee shall have no further responsibility with regard to such Mortgage File.
In lieu of repurchasing any such Mortgage Loan as provided above, if so provided
in the Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan
to be removed from the Trust Fund (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in
the manner and subject to the limitations set forth in Section 2.03(d). It is
understood and agreed that the obligation of the Seller to cure or to repurchase
(or to substitute for) any Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.

                  (b) [Reserved];

                  (c) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects. In addition, within 90 days of the earlier of
discovery by the Master Servicer or receipt of notice by the Master Servicer of
a Mortgagor's intent to convert from an adjustable Mortgage Rate to a fixed
Mortgage Rate, the Master Servicer shall repurchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Master Servicer was notified.

                  (d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day of the REMIC
contained in the Trust Fund.

                  As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and shall thereafter, review such documents within the time periods and in
the manner specified in Section 2.02 and deliver the applicable certifications,
with any applicable exceptions noted thereon, within the time periods and in the
manner specified in Section 2.02. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the Seller. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Trustee shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, and the Master Servicer shall amend the Mortgage
Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the
terms of this Agreement and the

                                      -62-

<PAGE>

substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement, in each case as of the date of substitution.

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

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

                  (e) Upon discovery by the Depositor, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller or the Depositor shall repurchase
or, subject to the limitations set forth in Section 2.03(d), substitute one or
more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within
90 days of the earlier of discovery or receipt of such notice with respect to
such affected Mortgage Loan. Such repurchase or substitution shall be made by
(i) the Seller, if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Seller under the Mortgage Loan Purchase Agreement, or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or substitution
shall be made in the same manner as set forth in Sections 2.03(a). The Trustee
shall reconvey to the Depositor or the Seller, as the case may be, the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased by the Seller for breach
of a representation or warranty.

                  SECTION 2.04.             [Reserved].

                                      -63-

<PAGE>

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

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

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

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

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

                                      -64-

<PAGE>

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

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

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

                  (vii) The Master Servicer covenants that its computer and
other systems used in servicing the Mortgage Loans operate in a manner such that
the Master Servicer can service the Mortgage Loans in accordance with the terms
of this Agreement.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee.

                  SECTION 2.06.             Issuance of the Certificates.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in the Trust Fund delivered on the date hereof, receipt of which
is hereby acknowledged. Concurrently with such assignment and delivery of such
assets delivered on the date hereof and in exchange therefor, the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations. The interests evidenced
by the Certificates constitute the entire beneficial ownership interest in the
Trust Fund.

                                      -65-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01.             Master Servicer to Act as Master
                                            Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders and loan servicers administering similar
mortgage loans but without regard to:

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

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

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

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

                  To the extent consistent with the foregoing, the Master
Servicer shall also seek to maximize the timely and complete recovery of
principal and interest on the Mortgage Notes. Subject only to the
above-described servicing standards and the terms of this Agreement and of the
respective Mortgage Loans, the Master Servicer shall have full power and
authority, acting alone or through Sub-Servicers as provided in Section 3.02, to
do or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the name
of a Sub-Servicer is hereby authorized and empowered by the Trustee when the
Master Servicer believes it appropriate in its best judgment in accordance with
the servicing standards set forth above, to execute and deliver, on behalf of
the Certificateholders and the Trustee, and upon notice to the Trustee, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each

                                      -66-

<PAGE>

insurer under each Primary Mortgage Insurance Policy and any standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall execute, at the
written request of the Master Servicer, and furnish to the Master Servicer and
any Sub-Servicer such documents as are necessary or appropriate to enable the
Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to the Master
Servicer a power of attorney to carry out such duties. The Trustee shall not be
liable for the actions of the Master Servicer or any Sub- Servicers under such
powers of attorney.

                  In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not
permit any modification, waiver or amendment of any term of any Mortgage Loan,
unless (i) the Master Servicer provides an Opinion of Counsel that such action
will not both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause either REMIC I or REMIC II to fail to
qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions or (ii) such modification, waiver or amendment is made in accordance
with the terms of Section 3.07.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.

                  SECTION 3.02.             Sub-Servicing Agreements Between the
                                            Master Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by the Rating Agency of the rating on any Class of Certificates)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-

                                      -67-

<PAGE>

Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts of
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.

                  SECTION 3.03.             Successor Sub-Servicers.

                  The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed

                                      -68-

<PAGE>

simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

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

                  SECTION 3.04.             Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

                  SECTION 3.05.             No Contractual Relationship Between
                                            Sub-Servicers and Trustee or
                                            Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.

                  SECTION 3.06.             Assumption or Termination of Sub-
                                            Servicing Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master

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Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  SECTION 3.07.             Collection of Certain Mortgage Loan
                                            Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Primary Mortgage Insurance Policy
and any other applicable insurance policies, follow such collection procedures
as it would follow with respect to mortgage loans comparable to the Mortgage
Loans and held for its own account. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, penalty interest, only upon determining that the coverage of such
Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not
be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided that any extension
pursuant to clause (ii) above shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder, except as provided
below. In the event of any such arrangement pursuant to clause (ii) above, the
Master Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.03 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the standards set
forth in Section 3.01, may also accept payment from the related Mortgagor of an
amount less than the Stated Principal Balance in final satisfaction of such
Mortgage Loan (such payment, a "Short Pay-off") or consent to the postponement
of strict compliance with any such term or otherwise grant indulgence to any
Mortgagor.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not adjust the Mortgage Rate on any Mortgage Loan
originated as an adjustable-rate Mortgage Loan.

                  SECTION 3.08.             Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an

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<PAGE>

Eligible Account and shall comply with all requirements of this Agreement
relating to the Collection Account. The Sub-Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub- Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than one Business Day after the deposit of such funds into the clearing account.
The Sub-Servicer shall thereafter deposit such proceeds in the Collection
Account or remit such proceeds to the Master Servicer for deposit in the
Collection Account not later than two Business Days after the deposit of such
amounts in the Sub-Servicing Account. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Sub-Servicer receives such payments.

                  SECTION 3.09.             Collection of Taxes, Assessments and
                                            Similar Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, fire and hazard insurance premiums, Primary Mortgage
Insurance Premiums, water charges, sewer rents and comparable items for the
account of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
one Business Day after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the

                                      -71-

<PAGE>

payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.

                  SECTION 3.10.             Collection Account and Distribution
                                            Account.

                  (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than two Business Days after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than one Business Day after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it from
and after the Cut-off Date (other than in respect of principal or interest on
the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:

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

                           (ii) all payments on account of interest (net of the
related Servicing Fee) on each Mortgage Loan;

                           (iii) all Insurance Proceeds and Liquidation Proceeds
(other than proceeds collected in respect of any particular REO Property and
amounts paid by the Master Servicer in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 9.01);

                           (iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;

                           (v) any amounts required to be deposited by the
Master Servicer pursuant to the second paragraph of Section 3.14(a) in respect
of any blanket policy deductibles;

                           (vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 9.01; and

                           (vii) all amounts required to be deposited in
connection with shortfalls in principal amount of Qualified Substitute Mortgage
Loans pursuant to Section 2.03.

                  For purposes of the immediately preceding sentence, the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution.

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<PAGE>

                  The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges or assumption fees need not be deposited by the Master Servicer in the
Collection Account. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding. To the extent that the Master Servicer
incorrectly applies any curtailment on any Mortgage Loan, the Master Servicer
may withdraw such amount from the Collection Account to the extent of future
curtailments.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 12:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.26, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay
such amounts to the Persons entitled thereto.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Master Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver

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<PAGE>

to the Trustee from time to time for deposit, and upon written notification from
the Master Servicer, the Trustee shall so deposit, in the Distribution Account:

                           (i) any P&I Advances, as required pursuant to Section
4.03, unless delivered directly to the Trustee by an Advancing Person;

                           (ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;

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

                           (iv) any amounts required to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest Shortfalls; and

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

                  (e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder.

                  (f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.

                  SECTION 3.11.             Withdrawals from the Collection
                                            Account and Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:

                           (i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence of Section
3.10(d);

                           (ii) subject to Section 3.16(d), to reimburse the
Master Servicer for P&I Advances, but only to the extent of amounts received
which represent Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 4.03;

                           (iii) subject to Section 3.16(d), to pay the Master
Servicer or any Sub- Servicer (A) any unpaid Servicing Fees, (B) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but only to
the extent of any Liquidation Proceeds, Insurance Proceeds or other

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<PAGE>

amounts as may be collected by the Master Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan and (C) any nonrecoverable
Servicing Advances following the final liquidation of a Mortgage Loan, but only
to the extent that Late Collections, Liquidation Proceeds and Insurance Proceeds
received with respect to such Mortgage Loan are insufficient to reimburse the
Master Servicer or any Sub-Servicer for such Servicing Advances;

                           (iv) to pay to the Master Servicer as servicing
compensation (in addition to the Servicing Fee) on the Master Servicer
Remittance Date any interest or investment income earned on funds deposited in
the Collection Account;

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

                           (vi) to reimburse the Master Servicer for any P&I
Advance previously made which the Master Servicer has determined to be a
Nonrecoverable P&I Advance in accordance with the provisions of Section 4.03;

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

                           (viii) to reimburse the Master Servicer or the
Trustee, as the case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the purchase obligation under Section 2.03 or
Section 2.04 of this Agreement that were included in the Purchase Price of the
Mortgage Loan, including any expenses arising out of the enforcement of the
purchase obligation;

                           (ix) to pay, or to reimburse the Master Servicer for
advances in respect of expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b); and

                           (x) to clear and terminate the Collection Account
pursuant to Section 9.01.

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

                  (b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:

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<PAGE>

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

                           (ii) to pay to itself amounts to which each is
entitled pursuant to Section 8.05 and any other Extraordinary Trust Fund
Expenses;

                           (iii) to pay itself any interest income earned on
funds deposited in the Distribution Account pursuant to Section 3.12(c);

                           (iv) to reimburse itself pursuant to Section 7.02 or
pursuant to Section 7.01 to the extent such amounts in Section 7.01 were not
reimbursed by the Master Servicer;

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

                           (vi) to pay to an Advancing Person reimbursements for
P&I Advances and/or Servicing Advances pursuant to Section 3.26;

                           (vii) to reimburse itself for any P&I Advance made by
it under Section 7.01 (if not reimbursed by the Master Servicer) to the same
extent the Master Servicer would be entitled to reimbursement under Section
3.11(a); and

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

                  SECTION 3.12.             Investment of Funds in the
                                            Collection Account and the
                                            Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:

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<PAGE>

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

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

                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.

                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

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

                  SECTION 3.13.             Maintenance of the Primary Mortgage
                                            Insurance Policies; Collections
                                            Thereunder.

                  The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreement and to the extent available, a Primary
Mortgage Insurance Policy with respect to each Mortgage Loan so insured as of
the Closing Date (or, in the case of a Qualified Substitute Mortgage Loan, on
the date of substitution). Such coverage will be maintained with respect to each
such Mortgage Loan for so long as it is outstanding, subject to any applicable
laws or until the related Loan-to-Value Ratio is reduced to less than or equal
to 80% based on Mortgagor payments. The Master Servicer shall cause the premium
for each Primary Mortgage Insurance Policy to be paid on a timely basis and
shall pay such premium out of its own funds if it is not otherwise paid. The
Master Servicer or the related Sub-Servicer, if any, will not cancel or refuse
to renew any such Primary Mortgage Insurance Policy in effect on the Closing
Date (or, in the case of a Qualified Substitute Mortgage Loan, on the date of
substitution) that is required to be kept in force under this Agreement unless a
replacement

                                      -77-

<PAGE>

Primary Mortgage Insurance Policy for such canceled or non-renewed policy is
obtained from and maintained with a Qualified Insurer.

                  The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Mortgage Insurance
Policy. In connection with any assumption and modification agreement or
substitution of liability agreement entered into or to be entered into pursuant
to Section 3.15, the Master Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage under
the Primary Mortgage Insurance Policy. If any such Primary Mortgage Insurance
Policy is terminated as a result of such assumption, the Master Servicer or the
related Sub-Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.

                  In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by
the Master Servicer under any Primary Mortgage Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11; and any amounts collected by the Master Servicer under any Primary
Mortgage Insurance Policy in respect of any REO Property shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 3.23. In those
cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer,
on behalf of itself, the Trustee, and the Certificateholders, will present
claims to the insurer under any Primary Mortgage Insurance Policy and all
collections thereunder shall be deposited initially in the Sub-Servicing
Account.

                  SECTION 3.14.             Maintenance of Hazard Insurance and
                                            Errors and Omissions and Fidelity
                                            Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued

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<PAGE>

interest at the Mortgage Rate and related Servicing Advances. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts to be collected by the Master Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the property subject
to the related Mortgage or amounts to be released to the Mortgagor in accordance
with the procedures that the Master Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.23, if received in respect of an REO Property. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Master Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of B+:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer

                                      -79-

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shall provide the Trustee (upon the Trustee's reasonable request) with copies of
any such insurance policies and fidelity bond. The Master Servicer shall be
deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancellable without thirty days'
prior written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.

                  SECTION 3.15.             Enforcement of Due-On-Sale Clauses;
                                            Assumption Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Mortgage Insurance Policy or hazard
insurance policy, or a new policy meeting the requirements of this Section is
obtained. Any fee collected by the Master Servicer in respect of an assumption
or substitution of liability agreement will be retained by the Master Servicer
as additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

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                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.16.             Realization Upon Defaulted Mortgage
                                            Loans.

                  (a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.

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

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

                  (2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such

                                      -81-

<PAGE>

materials are present for which such action could be required, that it would be
in the best economic interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                  (c) The Master Servicer may at its option purchase from the
Trust Fund any Mortgage Loan on or after the 90th day on which the payment on
such Mortgage Loan was due and payable and not received, which the Master
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price; provided,
however, that the Master Servicer shall purchase any such Mortgage Loans or
related REO Properties on the basis of delinquency, purchasing the most
delinquent Mortgage Loans or related REO Properties first. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release or cause to be released to the Master
Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer shall furnish and as shall be necessary to vest in the Master
Servicer title to any Mortgage Loan released pursuant hereto.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii)(A) or
(B); second, to accrued and unpaid interest on the Mortgage Loan, to the date of
the Final Recovery Determination, or to the Due Date prior to the Distribution
Date on which such amounts are to be distributed if not in connection with a
Final Recovery Determination; and third, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than the full amount of accrued and unpaid interest due on such Mortgage Loan,
the amount of such recovery will be

                                      -82-

<PAGE>

allocated by the Master Servicer as follows: first, to unpaid Servicing Fees;
and second, to the balance of the interest then due and owing. The portion of
the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Master Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii)(A).

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

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivery of two copies of a Request for
Release in the form of Exhibit E (which shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such copies of the Request
for Release, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

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

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

                                      -83-

<PAGE>

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

                  SECTION 3.18.             Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section
3.11(a)(iii)(A) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges and other similar fees and charges shall be retained
by the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.

                  SECTION 3.19.             Reports to the Trustee; Collection
                                            Account Statements.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, upon the request of the Trustee, a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on the last day of the calendar
month relating to such Distribution Date and showing, for the period covered by
such statement, the aggregate amount of deposits into and withdrawals from the
Collection Account of each category of deposit specified in Section 3.10(a) and
each category of withdrawal specified in Section 3.11. Such statement may be in
the form of the then current Fannie Mae Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.

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<PAGE>

                  SECTION 3.20.             Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the Depositor
and the Rating Agency on or before April 15 of each calendar year commencing in
2001, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.

                  SECTION 3.21.             Independent Public Accountants'
                                            Servicing Report.

                  Not later than April 15 of each calendar year commencing in
2001, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee and the
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee. In the event
such firm of independent certified public accountants requires the Trustee to
agree to the procedures performed by such firm, the Master Servicer shall direct
the Trustee in writing to so agree; it being understood and agreed that the
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Master Servicer, and the Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.

                  SECTION 3.22.             Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of the
Controller of the Currency, the Office of Thrift Supervision, the FDIC, and any
other federal or state banking or insurance regulatory

                                      -85-

<PAGE>

authority that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans required by applicable laws and regulations will be provided
to such Certificateholder, the Trustee and to any Person identified to the
Master Servicer as a prospective transferee of a Certificate, upon reasonable
request during normal business hours at the offices of the Master Servicer
designated by it at the expense of the Person requesting such access.

                  SECTION 3.23.             Title, Management and Disposition of
                                            REO Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property before the close of the third taxable year
following the year the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the Trust Fund of such REO Property subsequent to three
years after its acquisition will will not result in the imposition on REMIC I or
REMIC II of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause REMIC I or REMIC II to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by REMIC I or REMIC II of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

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

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing

                                      -86-

<PAGE>

account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
two Business Days after the Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than one Business Day
after the deposit of such funds into the clearing account, all revenues received
by it with respect to an REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:

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

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

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

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

                  Notwithstanding the foregoing, none of the Master Servicer or
the Trustee shall:

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

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

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

                  (iv) authorize any Person to Directly Operate any REO Property
on any date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.

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

                                      -87-

<PAGE>

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

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

                  (iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Master Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders with respect to
the operation and management of any such REO Property; and

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

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees.

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. Any income
from the related REO Property received during any calendar months prior to a
Final Recovery Determination, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d), shall be withdrawn by the Master Servicer from
each REO Account maintained by it and deposited into the Distribution Account in
accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date
relating to a Final Recovery Determination with respect to such Mortgage Loan,
for distribution on the related Distribution Date in accordance with Section
4.01.

                  (e) Subject to the time constraints set forth in Section
3.23(a), and further subject to obtaining the approval of the insurer under any
related Primary Mortgage Insurance Policy (if and to the extent that such
approvals are necessary to make claims under such policies in respect of the
affected REO Property), each REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
shall deem necessary or advisable, as shall be normal and usual in its general
servicing activities for similar properties.

                                      -88-

<PAGE>

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

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

                  SECTION 3.24.             Obligations of the Master Servicer
                                            in Respect of Prepayment Interest
                                            Shortfalls.

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 12:00 p.m. New York time on the
Master Servicer Remittance Date from its own funds an amount equal to the lesser
of (i) the aggregate of the Prepayment Interest Shortfalls for the related
Distribution Date resulting from full or partial Principal Prepayments during
the related Prepayment Period and (ii) the amount of its aggregate Servicing Fee
for the most recently ended calendar month.

                  SECTION 3.25.             Obligations of the Master Servicer
                                            in Respect of Monthly Payments.

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

                  SECTION 3.26.             Advance Facility.

                  (a) The Master Servicer is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may fund P&I Advances and/or Servicing Advances under this Agreement, although
no such facility shall reduce or otherwise affect the Master Servicer's
obligation to fund such P&I Advances and/or Servicing Advances. To the extent
that an Advancing Person funds any P&I Advance or any Servicing Advance and
provides the Trustee with notice acknowledged by the Master Servicer that such
Advancing Person is entitled

                                      -89-

<PAGE>

to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.26(b). Such notice from the Advancing Person must specify the
amount of the reimbursement and must specify which Section of this Agreement
permits the applicable P&I Advance or Servicing Advance to be reimbursed. The
Trustee shall have no duty or liability with respect to any calculation of any
reimbursement to be paid to an Advancing Person and shall be entitled to rely
without independent investigation on the Advancing Person's notice provided
pursuant to this Section 3.26. An Advancing Person whose obligations hereunder
are limited to the funding of P&I Advances and/or Servicing Advances shall not
be required to meet the qualifications of a Sub-Servicer pursuant to Section
3.02 hereof.

                  (b) If an Advancing Person is entitled to reimbursement for
any particular P&I Advance or Servicing Advance, then the Master Servicer shall
not be permitted to reimburse itself therefor under Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), but instead the Master
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.10(b) to the extent of amounts on deposit in the
Collection Account on the related Master Servicer Remittance Date. The Trustee
is hereby authorized to pay to an Advancing Person, reimbursements for P&I
Advances and Servicing Advances from the Distribution Account to the same extent
the Master Servicer would have been permitted to reimburse itself for such P&I
Advances and/or Servicing Advances in accordance with Section 3.11(a)(ii),
Section 3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), as the case
may be, had the Master Servicer made such Advance or Servicing Advance. The
Trustee is hereby authorized to pay directly to the Advancing Person such
portion of the Servicing Fee as the parties to any advancing facility agree.

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

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01.             Distributions.

                  (a)(i) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the sum of the Group I-A
Available Distribution Amount and the Group I-B Available Distribution Amount
and distribute to the Class AF-1 Certificateholders and the Class AF-2
Certificateholders, from the Group I-A Available Distribution Amount or the
Group I-B Available Distribution Amount, respectively, (and, in the case of the
Class IO Certificates, the Class PO Certificates, the Group I Subordinate
Certificates and the Class R-I Certificates, from the Group I-A Available
Distribution Amount and the Group I-B Available Distribution Amount) the
following amounts, in the following order of priority:

                  FIRST, to distributions of interest in respect of the Class
                  AF-1 Certificates, the Class AF-2 Certificates and the Class
                  IO Certificates, in an amount (allocable among such
                  Certificates PRO RATA in accordance with the respective
                  amounts payable as to each pursuant to this clause first)
                  equal to the aggregate of the Interest Distribution Amounts in
                  respect of such Certificates for such Distribution Date;

                  SECOND, to the extent of the Class PO Principal Distribution
                  Amount, to distributions of principal to the Class PO
                  Certificates (applied to reduce the Certificate Principal
                  Balances of such Certificates), until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  THIRD, to the extent of the Group I Senior Principal
                  Distribution Amount, to distributions of principal to the
                  Class AF-1 Certificates and the Class AF-2 Certificates
                  (applied to reduce the Certificate Principal Balance of such
                  Certificates), until the Certificate Principal Balance of each
                  Class of the Group I Senior Certificates has been reduced to
                  zero;

                  FOURTH, to distributions of interest in respect of the Group I
                  Subordinate Certificates, other than the Class of Group I
                  Subordinate Certificates with the highest numerical
                  designation then outstanding, in an amount (allocable among
                  such Certificates PRO RATA in accordance with the respective
                  amounts payable as to each pursuant to this clause fourth, in
                  the order of priority from the Class of Group I Subordinate
                  Certificates with the lowest numerical designation to the
                  Class of Group I Subordinate Certificates with the highest
                  numerical designation entitled to a distribution of interest
                  pursuant to this clause fourth) equal to the aggregate of the
                  Interest Distribution Amounts in respect of such Certificates
                  for such Distribution Date;

                  FIFTH, to distributions of principal to the Class PO
                  Certificates (applied to reduce the Certificate Principal
                  Balance of such Certificates) in an amount equal to the
                  excess,

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<PAGE>

                  if any, of the Class PO Percentage of the Stated Principal
                  Balance of each Class PO Mortgage Loan as to which a Final
                  Liquidation has occurred, over the amount distributed in
                  respect of such Class PO Mortgage Loan to the Class PO
                  Certificates pursuant to clause second above;

                  SIXTH, to distributions in respect of the Class of Group I
                  Subordinate Certificates with the highest numerical
                  designation then outstanding, in an amount equal to the
                  Interest Distribution Amount in respect of such Certificates
                  for such Distribution Date;

                  SEVENTH, to the Holders of the Classes of the Group I
                  Subordinate Certificates, an aggregate amount equal to the
                  Group I Subordinate Principal Distribution Amount for such
                  Distribution Date (applied to reduce the Certificate Principal
                  Balances of such Certificates), allocable among the Classes of
                  Group I Subordinate Certificates PRO RATA in accordance with
                  the respective amounts payable as to each such Class pursuant
                  to the priorities and amounts set forth in Section 4.01(b)(i);
                  and

                  EIGHTH, to the Holders of the Class R-I Certificates, any
                  remaining amounts.

                  (ii) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the sum of the Group II-A
Available Distribution Amount and the Group II-B Available Distribution Amount
and distribute to the Class AV-1 Certificateholders and the Class AV-2
Certificateholders, from the Group II-A Available Distribution Amount or the
Group II-B Available Distribution Amount, respectively, (and, in the case of the
Group II Subordinate Certificates and the Class R-II Certificates, from the
Group II-A Available Distribution Amount and the Group II-B Available
Distribution Amount) the following amounts, in the following order of priority:

                  FIRST, to distributions of interest in respect of the Class
                  AV-1 Certificates and the Class AV-2 Certificates, in an
                  amount equal to the aggregate of the Interest Distribution
                  Amounts in respect of such Certificates for such Distribution
                  Date;

                  SECOND, to the extent of the Group II Senior Principal
                  Distribution Amount, to distributions of principal to the
                  Class AV-1 Certificates and the Class AV-2 Certificates
                  (applied to reduce the Certificate Principal Balance of such
                  Certificates), until the Certificate Principal Balance of each
                  Class of the Group II Senior Certificates has been reduced to
                  zero;

                  THIRD, to distributions of interest in respect of the Group II
                  Subordinate Certificates (allocable among such Certificates
                  PRO RATA in accordance with the respective amounts payable as
                  to each pursuant to this clause third, in the order of
                  priority from the Class of Group II Subordinate Certificates
                  with the lowest numerical designation to the Class of Group II
                  Subordinate Certificates with the highest numerical
                  designation entitled to a distribution of interest pursuant to
                  this clause third) equal to the aggregate of the Interest
                  Distribution Amounts in respect of such Certificates for such
                  Distribution Date;

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<PAGE>

                  FOURTH, to the Holders of the Classes of the Group II
                  Subordinate Certificates, an aggregate amount equal to the
                  Group II Subordinate Principal Distribution Amount for such
                  Distribution Date (applied to reduce the Certificate Principal
                  Balances of such Certificates), allocable among the Classes of
                  Group II Subordinate Certificates PRO RATA in accordance with
                  the respective amounts payable as to each such Class pursuant
                  to the priorities and amounts set forth in Section
                  4.01(c)(ii); and

                  FIFTH, to the Holders of the Class R-II Certificates, any
                  remaining amounts.

                  (iii) All references above to the Certificate Principal
Balance of any Class of Certificates shall be to the Certificate Principal
Balance of such Class prior to the allocation of Extraordinary Trust Fund
Expenses and Realized Losses, in each case allocated to such Class of
Certificates, on such Distribution Date pursuant to Section 4.04.

                  (b)(i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Group I Subordinate
Certificates pursuant to Section 4.01(a)(i) seventh above shall be applied among
the various Classes thereof, in the order of priority from the Class of Group I
Subordinate Certificates with the lowest numerical designation to the Class of
Group I Subordinate Certificates with the highest numerical designation, in each
case to the extent of remaining available funds up to the amount allocable to
such Class for such Distribution Date and in each case until the Certificate
Principal Balance of each such Class is reduced to zero, in an amount with
respect to each such Class equal to the sum of (X) the related Class B
Percentage of the amounts described in clauses (i) through (v) of clause (a) of
the definition of Group I Subordinate Principal Distribution Amount, (Y) the
portion of the amounts described in clauses (b) and (c) of the definition of
Group I Subordinate Principal Distribution Amount allocable to such Class
pursuant to Section 4.01(b)(ii) below and (Z) the excess, if any, of the amount
required to be distributed to such Class pursuant to this Section 4.01(b)(i) for
the immediately preceding Distribution Date, over the aggregate distributions of
principal made in respect of such Class of Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that any such
excess is not attributable to Realized Losses which were allocated to Group I
Subordinate Certificates with a lower priority pursuant to Section 4.04.

                  (ii) (A) On any Distribution Date, with respect to the Group I
Mortgage Loans, the portion of (a) all net Liquidation Proceeds and Insurance
Proceeds with respect to any Group I Mortgage Loans that were the subject of a
Final Recovery Determination in the related Prepayment Period and (b) all
Principal Prepayments received in respect of the Group I Mortgage Loans in the
related Prepayment Period, allocable to principal and not included in the Group
I Senior Principal Distribution Amount and the Class PO Principal Distribution
Amount, will be allocated on a PRO RATA basis among the following Classes of
Group I Subordinate Certificates (each, an "Eligible Class") in proportion to
the respective outstanding Certificate Principal Balances thereof: (i) the Class
BF-1 Certificates, (ii) the Class BF-2 Certificates, if on such Distribution
Date the aggregate percentage interest in the Loan Group I-A and Loan Group I-B
evidenced by the Class BF-2 Certificates, the Class BF-3 Certificates, the Class
BF-4 Certificates, the Class BF-5 Certificates and the Class BF-6 Certificates
equal or exceeds 1.00% before giving effect to distributions on such
Distribution Date, (iii) the Class BF-3 Certificates, if on such Distribution
Date the aggregate

                                      -93-

<PAGE>

percentage interest in Loan Group I-A and Loan Group I-B evidenced by the Class
BF-3 Certificates, the Class BF-4 Certificates, the Class BF-5 Certificates and
the Class BF-6 Certificates equal or exceeds 0.65% before giving effect to
distributions on such Distribution Date, (iv) the Class BF-4 Certificates, if on
such Distribution Date the aggregate percentage interest in Loan Group I-A and
Loan Group I-B evidenced by the Class BF-4 Certificates, the Class BF-5
Certificates and the Class BF-6 Certificates equal or exceeds 0.45% before
giving effect to distributions on such Distribution Date, (v) the Class BF-5
Certificates, if on such Distribution Date the aggregate percentage interest in
Loan Group I-A and Loan Group I-B evidenced by the Class BF-5 Certificates and
the Class BF-6 Certificates equal or exceeds 0.25% before giving effect to
distributions on such Distribution Date and (iii) the Class BF-6 Certificates,
if on such Distribution Date the percentage interest in Loan Group I-A and Loan
Group I-B evidenced by the Class BF-6 Certificates equals or exceeds 0.15%
before giving effect to distributions on such Distribution Date. Notwithstanding
the foregoing, if the application of the foregoing on any Distribution Date as
provided in Section 4.01 would result in a distribution in respect of principal
to any Class or Classes of Group I Subordinate Certificates in an amount greater
than the remaining Certificate Principal Balance thereof (any such Class, a
"Maturing Class") then: (a) the amount to be allocated to each Maturing Class
shall be reduced to a level that, when applied as described above, would exactly
reduce the Certificate Principal Balance of such Class to zero and (b) the total
amount of the reductions pursuant to clause (a) above in the amount to be
allocated to the Maturing Class or Classes shall be allocated among the
remaining Eligible Classes on a PRO RATA basis in proportion to the respective
outstanding Certificate Principal Balances thereof prior to the allocation
thereto of any of the amounts described in the preceding sentence.

                  (c)(i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Group II Subordinate
Certificates pursuant to Section 4.01(a)(ii) fourth above shall be applied among
the various Classes thereof, in the order of priority from the Class of Group II
Subordinate Certificates with the lowest numerical designation to the Class of
Group II Subordinate Certificates with the highest numerical designation, in
each case to the extent of remaining available funds up to the amount allocable
to such Class for such Distribution Date and in each case until the Certificate
Principal Balance of each such Class is reduced to zero, in an amount with
respect to each such Class equal to the sum of (X) the related Class B
Percentage of the amounts described in clauses (i) through (v) of clause (a) of
the definition of Group II Subordinate Principal Distribution Amount, (Y) the
portion of the amounts described in clauses (b) and (c) of the definition of
Group II Subordinate Principal Distribution Amount allocable to such Class
pursuant to Section 4.01(c)(ii) below and (Z) the excess, if any, of the amount
required to be distributed to such Class pursuant to this Section 4.01(c)(i) for
the immediately preceding Distribution Date, over the aggregate distributions of
principal made in respect of such Class of Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that any such
excess is not attributable to Realized Losses which were allocated to Group II
Subordinate Certificates with a lower priority pursuant to Section 4.04.

                  (ii) (A) On any Distribution Date, with respect to the Group
II Mortgage Loans, the portion of (a) all net Liquidation Proceeds and Insurance
Proceeds with respect to any Group II Mortgage Loans that were the subject of a
Final Recovery Determination in the related Prepayment Period and (b) all
Principal Prepayments received in respect of the Group II Mortgage Loans in the

                                      -94-

<PAGE>

related Prepayment Period, allocable to principal and not included in the Group
II Senior Principal Distribution Amount, will be allocated on a PRO RATA basis
among the following Classes of Group II Subordinate Certificates (each, an
"Eligible Class") in proportion to the respective outstanding Certificate
Principal Balances thereof: (i) the Class BV-1 Certificates, (ii) the Class BV-2
Certificates, if on such Distribution Date the aggregate percentage interest in
Loan Group II-A and Loan Group II-B evidenced by the Class BV-2 Certificates,
the Class BV-3 Certificates, the Class BV-4 Certificates, the Class BV-5
Certificates and the Class BV-6 Certificates equal or exceeds 2.70% before
giving effect to distributions on such Distribution Date, (iii) the Class BV-3
Certificates, if on such Distribution Date the aggregate percentage interest in
Loan Group II-A and Loan Group II-B evidenced by the Class BV-3 Certificates,
the Class BV-4 Certificates, the Class BV-5 Certificates and the Class BV-6
Certificates equal or exceeds 1.80% before giving effect to distributions on
such Distribution Date, (iv) the Class BV-4 Certificates, if on such
Distribution Date the aggregate percentage interest in Loan Group II-A and Loan
Group II-B evidenced by the Class BV-4 Certificates, the Class BV-5 Certificates
and the Class BV-6 Certificates equal or exceeds 1.25% before giving effect to
distributions on such Distribution Date, (v) the Class BV-5 Certificates, if on
such Distribution Date the aggregate percentage interest in Loan Group II-A and
Loan Group II-B evidenced by the Class BV-5 Certificates and the Class BV-6
Certificates equal or exceeds 0.65% before giving effect to distributions on
such Distribution Date and (iii) the Class BV- 6 Certificates, if on such
Distribution Date the percentage interest in Loan Group II-A and Loan Group II-B
evidenced by the Class BV-6 Certificates equals or exceeds 0.35% before giving
effect to distributions on such Distribution Date. Notwithstanding the
foregoing, if the application of the foregoing on any Distribution Date as
provided in Section 4.01 would result in a distribution in respect of principal
to any Class or Classes of Group II Subordinate Certificates in an amount
greater than the remaining Certificate Principal Balance thereof (any such
Class, a "Maturing Class") then: (a) the amount to be allocated to each Maturing
Class shall be reduced to a level that, when applied as described above, would
exactly reduce the Certificate Principal Balance of such Class to zero and (b)
the total amount of the reductions pursuant to clause (a) above in the amount to
be allocated to the Maturing Class or Classes shall be allocated among the
remaining Eligible Classes on a PRO RATA basis in proportion to the respective
outstanding Certificate Principal Balances thereof prior to the allocation
thereto of any of the amounts described in the preceding sentence.

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

                                      -95-

<PAGE>

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

                  (e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee or the
Master Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

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

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

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

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to remaining non-tendering Certificateholders concerning surrender of
their Certificates and shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Salomon Smith Barney
Inc. all such amounts, and all rights of non-tendering Certificateholders in or
to such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's

                                      -96-

<PAGE>

failure to surrender its Certificate(s) for final payment thereof in accordance
with this Section 4.01(e).

                  SECTION 4.02.             Statements to Certificateholders.

                  On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trustee shall prepare and
make available to each Holder of the Regular Certificates, the Master Servicer
and the Rating Agencies, a statement as to the distributions to be made on such
Distribution Date:

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

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

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

                  (iv) the aggregate amount of P&I Advances for each Loan Group
for such Distribution Date;

                  (v) the aggregate Stated Principal Balance of the Mortgage
Loans and any REO Properties in each Loan Group at the close of business on such
Distribution Date;

                  (vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the Mortgage
Loans in each Loan Group as of the related Due Date;

                  (vii) the number and aggregate unpaid principal balance of
Mortgage Loans in each Loan Group that are (a) delinquent 30 to 59 days, (b)
delinquent 60 to 89 days, (c) delinquent 90 or more days in each case, as of the
last day of the preceding calendar month, (d) as to which foreclosure
proceedings have been commenced and (e) with respect to which the related
Mortgagor has filed for protection under applicable bankruptcy laws, with
respect to whom bankruptcy proceedings are pending or with respect to whom
bankruptcy protection is in force;

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

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

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<PAGE>

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

                  (xi) the aggregate amount of Realized Losses with respect to
the Mortgage Loans in each Loan Group incurred during the related Prepayment
Period (or, in the case of Bankruptcy Losses allocable to interest, in respect
of the related Due Period), separately identifying whether such Realized Losses
constituted Fraud Losses, Special Hazard Losses or Bankruptcy Losses;

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

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

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

                  (xv) the Interest Distribution Amount in respect of each such
Class of Certificates (other than the Class PO Certificates) for such
Distribution Date (separately identifying any reductions in the case of
Subordinate Certificates resulting from the allocation of Realized Losses
allocable to interest and Extraordinary Trust Fund Expenses on such Distribution
Date) and the respective portions thereof, if any, remaining unpaid following
the distributions made in respect of such Certificates on such Distribution
Date;

                  (xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by payments by
the Master Servicer pursuant to Section 3.24;

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

                  (xviii) the then-applicable Bankruptcy Amount, Fraud Loss
Amount, and Special Hazard Amount;

                  (xix) the Weighted Average Stripped Interest Rate with respect
to the Mortgage Loans for such Distribution Date;

                  (xx) with respect to any Mortgage Loan as to which foreclosure
proceedings have been concluded, the loan number and unpaid principal balance of
such Mortgage Loan as of the date of such conclusion of foreclosure proceedings;
and

                                      -98-

<PAGE>

                  (xxi) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the unpaid principal
balance of such Mortgage Loans as of the date of such Final Liquidation and the
amount of proceeds (including Liquidation Proceeds and Insurance Proceeds)
collected in respect of such Mortgage Loans.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Master Servicer and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at "www.ctslink.com". Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.

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

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

                  On each Distribution Date, the Trustee shall forward to the
Depositor, each Holder of a Residual Certificate and the Master Servicer, a copy
of the reports forwarded to the Regular Certificateholders on such Distribution
Date and a statement setting forth the amounts, if any, actually distributed
with respect to the Residual Certificates, respectively, on such Distribution
Date.

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

                  Upon request, the Trustee shall forward to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the

                                      -99-

<PAGE>

Certificateholder in accordance with such reasonable and explicit instructions
and directions as the Certificateholder may provide. For purposes of this
Section 4.02, the Trustee's duties are limited to the extent that the Trustee
receives timely reports as required from the Master Servicer.

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

                  SECTION 4.03.             Remittance Reports; P&I Advances.

                  (a) On the Determination Date, the Master Servicer shall
deliver to the Trustee by telecopy (or by such other means as the Master
Servicer and the Trustee may agree from time to time) a Remittance Report with
respect to the related Distribution Date. Such Remittance Report will include
(i) the amount of P&I Advances to be made by the Master Servicer in respect of
the related Distribution Date, the aggregate amount of P&I Advances outstanding
after giving effect to such P&I Advances, and the aggregate amount of
Nonrecoverable P&I Advances in respect of such Distribution Date and (ii) such
other information with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.02. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.

                  (b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Due Period and as to which REO Property an REO Disposition did not occur
during the related Due Period, an amount equal to the excess, if any, of the REO
Imputed Interest on such REO Property for the most recently ended calendar
month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.

                  On or before 12:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance

                                      -100-

<PAGE>

Date to the extent that the Available Distribution Amount for the related
Distribution Date (determined without regard to P&I Advances to be made on the
Master Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make P&I Advances. The Trustee will provide notice to the Master
Servicer by telecopy by the close of business on the Master Servicer Remittance
Date in the event that the amount remitted by the Master Servicer to the Trustee
on such Master Servicer Remittance Date is less than the P&I Advances required
to be made by the Master Servicer for the related Distribution Date.

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

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

                  SECTION 4.04.             Allocation of Extraordinary Trust
                                            Fund Expenses and Realized Losses.

                  (a) Prior to each Distribution Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Fraud Losses or Special Hazard
Losses; and (iii) the respective portions of such Realized Losses allocable to
interest and allocable to principal. Prior to each Distribution Date, the Master
Servicer shall also determine as to each Mortgage Loan: (A) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (B) the total amount of Realized
Losses, if any, incurred in connection with Debt Service Reductions in respect
of Monthly Payments due during the related Due Period. The information described
in the two preceding sentences that is to be supplied by the Master Servicer
shall be evidenced by an Officers' Certificate delivered to the Trustee by the
Master Servicer prior to the Determination Date immediately following the end of
(x) in the case of Bankruptcy Losses allocable to interest, the Due Period
during which any such Realized Loss was incurred, and (y) in the case of all
other Realized Losses, the Prepayment Period during which any such Realized Loss
was incurred.

                  (b) All Realized Losses on the Group I Mortgage Loans (other
than Excess Losses) shall be allocated by the Trustee on each Distribution Date
as follows: first, to the Class BF- 6 Certificates; second, to the Class BF-5
Certificates; third, to the Class BF-4 Certificates; fourth,

                                      -101-

<PAGE>

to the Class BF-3 Certificates; fifth, to the Class BF-2 Certificates; and
sixth, to the Class BF-1 Certificates, in each case until the Certificate
Principal Balance thereof has been reduced to zero. Thereafter, upon the
reduction of the Certificate Principal Balances of the Group I Subordinate
Certificates to zero, if Realized Losses are on a Class IO Mortgage Loan, such
Realized Losses will be allocated on any Distribution Date to the Class AF-1
Certificates, if the Realized Loss is on a Group I-A Mortgage Loan and to the
Class AF-2 Certificates, if the Realized Loss is on a Group I-B Mortgage Loan.
If Realized Losses are on a Class PO Mortgage Loan, such Realized Losses will be
allocated to the Class PO Certificates in an amount equal to the Class PO
Percentage of the Realized Losses and the remainder of the Realized Losses will
be allocated on any Distribution Date to the Class AF-1 Certificates, if the
Realized Loss is on a Group I-A Mortgage Loan and to the Class AF-2
Certificates, if the Realized Loss is on a Group I-B Mortgage Loan.

                  Realized Losses on the Group II Mortgage Loans (other than
Excess Losses), will be allocated on any Distribution Date as follows: first, to
the Class BV-6 Certificates; second, to the Class BV-5 Certificates; third, to
the Class BV-4 Certificates; fourth, to the Class BV-3 Certificates; fifth, to
the Class BV-2 Certificates; and sixth, to the Class BV-1 Certificates, in each
case until the Certificate Principal Balance of the related Class has been
reduced to zero. Thereafter, the remainder of the Realized Losses will be
allocated on any Distribution Date to the Class AV-1 Certificates, if the
Realized Loss is on a Group II-A Mortgage Loan and to the Class AV-2
Certificates, if the Realized Loss is on a Group II-B Mortgage Loan.

                  With respect to the Group I-A Mortgage Loans, Excess Losses on
a Class IO Mortgage Loan will be allocated on any Distribution Date by
allocating the related Group I Senior Percentage of the Excess Loss to the Class
AF-1 Certificates and the Group I-A Subordinate Percentage of the Excess Loss to
the Group I Subordinate Certificates. With respect to the Group I-B Mortgage
Loans, Excess Losses on a Class IO Mortgage Loan will be allocated on any
Distribution Date by allocating the related Group I Senior Percentage of the
Excess Loss to the Class AF-2 Certificates and the Group I-B Subordinate
Percentage of the Excess Loss to the Group I Subordinate Certificates.

                  With respect to the Group I Mortgage Loans, Excess Losses on a
Class PO Mortgage Loan will be allocated to the Class PO Certificates in an
amount equal to the related Class PO Percentage of the Excess Losses and the
remainder of the Excess Losses will be allocated on any Distribution Date to the
Group I Senior Certificates by allocating the related Group I Senior Percentage
of the Excess Loss to the related Group I Senior Certificates and the Group I-A
Subordinate Percentage or the Group I-B Subordinate Percentage, as applicable,
of the Excess Loss to the Group I Subordinate Certificates.

                  With respect to the Group II-A Mortgage Loans, Excess Losses
will be allocated on any Distribution Date by allocating the related Group II
Senior Percentage of the Excess Loss to the Class AV-1 Certificates and the
Group II-A Subordinate Percentage of the Excess Loss to the Group II Subordinate
Certificates on a PRO RATA basis. With respect to the Group II-B Mortgage Loans,
Excess Losses will be allocated on any Distribution Date by allocating the
related Group II Senior Percentage of the Excess Loss to the Class AV-2
Certificates and the Group II-B Subordinate Percentage of the Excess Loss to the
Group II Subordinate Certificates on a PRO RATA basis.

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<PAGE>

                  Extraordinary Trust Fund Expenses relating to Loan Group I or
Loan Group II, as applicable, will be allocated on any Distribution Date as
follows: first, to the Class BF-6 Certificates or the Class BV-6 Certificates,
as applicable; second, to the Class BF-5 Certificates or the Class BV- 5
Certificates, as applicable; third, to the Class BF-4 Certificates or the Class
BV-5 Certificates, as applicable; fourth, to the Class BF-3 Certificates or the
Class BV-3 Certificates, as applicable; fifth, to the Class BF-2 Certificates or
the Class BV-2 Certificates, as applicable; and sixth, to the Class BF-1
Certificates or the Class BV-1 Certificates, as applicable, in each case until
the Certificate Principal Balance of the related Class has been reduced to zero.
Thereafter, the Extraordinary Trust Fund Expenses will be allocated on any
Distribution Date among the Group I Senior Certificates or the Group II Senior
Certificates, as applicable, on a PRO RATA basis.

                  As used herein, an allocation of a Realized Loss or
Extraordinary Trust Fund Expense on a "PRO RATA basis" among two or more
specified Classes of Certificates means an allocation on a PRO RATA basis, among
the various Classes so specified, to each such Class of Certificates on the
basis of their then outstanding Certificate Principal Balances prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.

                  (c) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate be
reduced more than once in respect of any particular amount both (i) allocable to
such Certificate in respect of Realized Losses or Extraordinary Trust Fund
Expenses pursuant to Section 4.04 and (ii) payable to the Holder of such
Certificate pursuant to Section 4.01(a) as a portion of the related Senior
Principal Distribution Amount.

                  SECTION 4.05.             Compliance with Withholding
                                            Requirements.

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

                  SECTION 4.06.             [Reserved].

                  SECTION 4.07.             Commission Reporting.

                  Within 15 days after each Distribution Date, the Trustee
shall, in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System, a Form 8-K with a copy of the
statement to Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2002, the Trustee shall in accordance with
industry standards file a Form 15 Suspension Notification with respect to the
Trust Fund, if applicable. Prior to March 30, 2002, the Trustee shall file a
Form 10-K, in substance conforming to industry standards, with

                                      -103-

<PAGE>

respect to the Trust Fund. The Depositor hereby grants to the Trustee a limited
power of attorney to execute and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Trustee shall
have no responsibility to file any items other than those specified in this
Section.

                                      -104-

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01.             The Certificates.

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

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-20. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed,
authenticated and delivered by the Trustee to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Trustee by manual signature, and
such certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.

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

                                      -105-

<PAGE>

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

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

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book- Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of
$100,000, except that any beneficial ownership that was represented by a
Book-Entry Certificate in an amount less than $100,000 immediately prior to the
issuance of a Definitive Certificate shall be issued in a minimum denomination
equal to the amount represented by such Book-Entry Certificate. None of the
Depositor, the Master Servicer nor the Trustee shall be liable for any delay in
the delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and

                                      -106-

<PAGE>

performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.

                  SECTION 5.02.             Registration of Transfer and
                                            Exchange of Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided.

                  (b) No transfer of any Class IO Certificate, Class PO
Certificate, Subordinate Certificate or Class R Certificate (the "Private
Certificates") shall be made unless that transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer of
a Private Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee shall require, receipt
of: (i) if such transfer is purportedly being made in reliance upon Rule 144A
under the 1933 Act, written certifications from the Certificateholder desiring
to effect the transfer and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee, the Master Servicer, in its
capacity as such, or the Trust Fund), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither the Depositor or the Trustee is obligated to
register or qualify the Private Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a
Private Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  (c) No transfer of a Class IO Certificate, Class PO
Certificate, Subordinate Certificate or a Residual Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the DOL Regulations ("Plan Assets") unless (i) the Depositor, the
Trustee and the Master Servicer are provided with an Opinion of Counsel which
establishes to the satisfaction of the Depositor, the Trustee and the Master
Servicer that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense

                                      -107-

<PAGE>

of the Depositor, the Master Servicer, the Trustee or the Trust Fund or (ii) in
the case of a Class IO Certificate or Class PO Certificate, such Certificate has
been the subject of an ERISA Qualifying Underwriting. In the case of the
Subordinate Certificates, in lieu of such Opinion of Counsel, any prospective
Transferee of such Certificates may provide a certification in the form of
Exhibit G to this Agreement (or other form acceptable to the Depositor, the
Trustee and the Master Servicer), which the Trustee may rely upon without
further inquiry or investigation. An Opinion of Counsel, any certification or a
deemed representation will not be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

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

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

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

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

                                      -108-

<PAGE>

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

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

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

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

                  (iii) (A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section 5.02(d),
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. The Trustee shall be
under no liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 5.02(d) or for making
any payments due on such Certificate to the holder thereof or for taking any
other action with respect to such holder under the provisions of this Agreement.

                  (B) If any purported Transferee shall become a holder of a
Residual Certificate in violation of the restrictions in this Section 5.02(d)
and to the extent that the retroactive restoration of the rights of the holder
of such Residual Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have the right,
without notice to the holder or any prior holder of such Residual Certificate,
to sell such Residual Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Trustee. Such purchaser may be the Trustee itself or any
Affiliate of the Trustee. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Trustee or its

                                      -109-

<PAGE>

Affiliates), expenses and taxes due, if any, will be remitted by the Trustee to
such purported Transferee. The terms and conditions of any sale under this
clause (iii)(B) shall be determined in the sole discretion of the Trustee, and
the Trustee shall not be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such discretion.

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

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

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

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

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

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be

                                      -110-

<PAGE>

accompanied by a written instrument of transfer in the form satisfactory to the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing.

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

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

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

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

                  SECTION 5.04.             Persons Deemed Owners.

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

                  SECTION 5.05.             Certain Available Information.

                  On or prior to the date of the first sale of any Private
Certificate to an Independent third party, the Depositor shall provide to the
Trustee ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of the
Private Certificates. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
make

                                      -111-

<PAGE>

available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Trustee as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder or prospective transferee of a Private Certificate, the
private placement memorandum or other disclosure document relating to such
Certificates in the form most recently provided to the Trustee; and (ii) in all
cases, (A) this Agreement and any amendments hereof entered into pursuant to
Section 11.01, (B) all monthly statements required to be delivered to
Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 10.01(h), (D) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date to evidence the
Master Servicer's determination that any P&I Advance was, or if made, would be a
Nonrecoverable P&I Advance and (E) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date pursuant to Section
4.04(a). Copies and mailing of any and all of the foregoing items will be
available from the Trustee upon request at the expense of the person requesting
the same.

                                      -112-

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

                                      -113-

<PAGE>

willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer may rely in good faith on any document of any
kind which, PRIMA FACIE, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer and
any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense to
any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor and the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, unless the Depositor or the Master Servicer acts without the consent of
Holders of Certificates entitled to at least 51% of the Voting Rights (which
consent shall not be necessary in the case of litigation or other legal action
by either to enforce their respective rights or defend themselves hereunder),
the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder) shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor (subject to
the limitations set forth above) and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account.

                  SECTION 6.04.             Limitation on Resignation of the
                                            Master Servicer.

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

                                      -114-

<PAGE>

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

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

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub- Servicer's) most recent financial
statements of the parent company of the Master Servicer and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's written consent, except as required
pursuant to this Agreement or to the extent that it is appropriate to do so (i)
in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor, the Trustee or
the Trust Fund, and in either case, the Depositor or the Trustee, as the case
may be, shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer under this Agreement and may, but
is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights of
the Master Servicer under this Agreement; provided that the Master Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. The Depositor shall not
have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.

                                      -115-

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01.             Master Servicer Events of Default.

                  "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
for distribution to the Certificateholders any payment (other than a P&I Advance
required to be made from its own funds on any Master Servicer Remittance Date
pursuant to Section 4.03) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to the Master Servicer by the
Depositor or the Trustee (in which case notice shall be provided by telecopy),
or to the Master Servicer, the Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or

                  (ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any of the covenants or agreements on
the part of the Master Servicer contained in the Certificates or in this
Agreement which continues unremedied for a period of 45 days after the earlier
of (i) the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by the Depositor or
the Trustee, or to the Master Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the Voting Rights and (ii)
actual knowledge of such failure by a Servicing Officer of the Master Servicer;
or

                  (iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceeding, or for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and if such proceeding is being contested by
the Master Servicer in good faith such decree or order shall have remained in
force undischarged or unstayed for a period of 60 consecutive days or results in
the entry of an order for relief or any such adjudication or appointment; or

                  (iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; or

                  (v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its obligations;
or

                                      -116-

<PAGE>

                  (vi) any failure of the Master Servicer to make any P&I
Advance on any Master Servicer Remittance Date required to be made from its own
funds pursuant to Section 4.03 which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure (which
notice the Trustee must provide by 3:00 p.m. New York time on the Business Day
following the Master Servicer Remittance Date), requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee.

                  If a Master Servicer Event of Default described in clauses (i)
through (v) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Master Servicer (and to the Depositor if given by the
Trustee or to the Trustee if given by the Depositor), terminate all of the
rights and obligations of the Master Servicer in its capacity as a Master
Servicer under this Agreement, to the extent permitted by law, and in and to the
Mortgage Loans and the proceeds thereof. If a Master Servicer Event of Default
described in clause (vi) hereof shall occur, the Trustee shall, by notice in
writing to the Master Servicer and the Depositor, terminate all of the rights
and obligations of the Master Servicer in its capacity as Master Servicer under
this Agreement and in and to the Mortgage Loans and the proceeds thereof. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect to
the Certificates (other than as a Holder of any Certificate) or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of
and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees, at its sole cost
and expense, promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement, and to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Trustee for administration by it of all cash amounts which at the time shall be
or should have been credited by the Master Servicer to the Collection Account
held by or on behalf of the Master Servicer, the Distribution Account or any REO
Account or Servicing Account held by or on behalf of the Master Servicer or
thereafter be received with respect to the Mortgage Loans or any REO Property
serviced by the Master Servicer (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of P&I Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.03, notwithstanding any such termination, with respect to
events occurring prior to such termination). For purposes of this Section 7.01,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Default unless a Responsible Officer of the Trustee assigned to and working in
the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a Master Servicer Event of
Default is received by the Trustee and such notice references the Certificates,
the Trust Fund or this Agreement.

                                      -117-

<PAGE>

                  The Trustee shall be entitled to be reimbursed by the Master
Servicer (or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor master servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.

                  SECTION 7.02.             Trustee to Act; Appointment of
                                            Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.12) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
P&I Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, the Trustee
shall be entitled to the Servicing Fees and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding the
above and subject to the next paragraph, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans, or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to the Rating Agency and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. No appointment of a successor to the
Master Servicer under this Agreement shall be effective until the assumption by
the successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer as such hereunder. The Depositor, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Pending appointment of a
successor to the Master Servicer under this Agreement, the Trustee shall act in
such capacity as hereinabove provided.

                                      -118-

<PAGE>

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the related Servicing Fee. Within thirty days
after any such public announcement, the Trustee, with the cooperation of the
Depositor, shall negotiate in good faith and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain such servicing. The Trustee upon receipt of the purchase
price shall pay such purchase price to the Master Servicer being so removed,
after deducting from any sum received by the Trustee from the successor to the
Master Servicer in respect of such sale, transfer and assignment all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities reasonably incurred hereunder. After
such deductions, the remainder of such sum shall be paid by the Trustee to the
Master Servicer at the time of such sale.

                  (b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such advance,
without interest, by withdrawing from the Distribution Account, out of amounts
on deposit therein, an amount equal to the portion of such advance attributable
to the Stayed Funds.

                  SECTION 7.03.             Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee

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shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.

                  SECTION 7.04.             Waiver of Master Servicer Events of
                                            Default.

                  Subject to Section 11.09(d), the Holders representing at least
66% of the Voting Rights evidenced by all Classes of Certificates affected by
any default or Master Servicer Event of Default hereunder may waive such default
or Master Servicer Event of Default; provided, however, that a default or Master
Servicer Event of Default under clause (i) or (vi) of Section 7.01 may be waived
only by all of the Holders of the Regular Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01.             Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to it, which are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, it shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to its satisfaction, it will provide notice thereof
to the Certificateholders.

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

                  (i) Prior to the occurrence of a Master Servicer Event of
Default, and after the curing of all such Master Servicer Events of Default
which may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee that conform to the
requirements of this Agreement;

                  (ii) The Trustee shall not be personally liable for any error
of judgment made in good faith by a Responsible Officer or Responsible Officers
unless it shall be proved that it was negligent in ascertaining the pertinent
facts;

                  (iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates entitled to at
least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the it or exercising any
trust or power conferred upon it, under this Agreement; and

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         (iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default unless a Responsible Officer of the
Trustee shall have received written notice thereof or a Responsible Officer of
the Trustee shall have actual knowledge thereof. In the absence of receipt of
such notice or actual knowledge, the Trustee may conclusively assume there is no
default.

                  SECTION 8.02.             Certain Matters Affecting the
                                            Trustee.

                  (a)      Except as otherwise provided in Section 8.01:

                  (i) The Trustee and any director, officer, employee or agent
of the Trustee may request and rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties;

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

                  (iii) The Trustee shall not be under any obligation to
exercise any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Master Servicer Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs;

                  (iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing of all Master Servicer Events of Default
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee not reasonably assured
to the Trustee by such

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<PAGE>

Certificateholders, the Trustee may require reasonable indemnity against such
cost, expense, or liability from such Certificateholders as a condition to
taking any such action;

                  (vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys;

                  (vii) The Trustee shall not be personally liable for any loss
resulting from the investment of funds held in the Collection Account at the
direction of the Master Servicer pursuant to Section 3.12; and

                  (viii) Any request or direction of the Depositor, the Master
Servicer or the Certificateholders mentioned herein shall be sufficiently
evidenced in writing.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

                  SECTION 8.03.             Trustee not Liable for Certificates
                                            or Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.12) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 8.12) or of the Certificates (other than the signature of the Trustee
and authentication of the Trustee on the Certificates) or of any Mortgage Loan
or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer, other than
any funds held by or on behalf of the Trustee in accordance with Section 3.10.

                  SECTION 8.04.             Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                  SECTION 8.05.             Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the

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<PAGE>

Trustee, including the compensation and the expenses and disbursements of its
agents and counsel, in the ordinary course of the Trustee's performance in
accordance with the provisions of this Agreement) incurred by the Trustee in
connection with any claim or legal action or any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its obligations and duties under this Agreement, other than
any loss, liability or expense (i) for which the Trustee is indemnified by the
Master Servicer, (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder or as a result of a breach of the Trustee's obligations under Article
X hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee or any director, officer, employee or agent of the Trustee
may have hereunder in its capacity as such, may be withdrawn by the Trustee from
the Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment under this Section
8.05(b) made by the Master Servicer to the Trustee shall be from the Master
Servicer's own funds, without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of S&P and Fitch for ongoing surveillance from its own funds without right
of reimbursement.

                  SECTION 8.06.             Eligibility Requirements for
                                            Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07.             Resignation and Removal of the
                                            Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and

                                      -124-

<PAGE>

to the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee and the Master Servicer by the Depositor. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed, and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee and the Master Servicer by the
Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08.             Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and the Trustee, and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder and the Depositor and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by the Rating Agency, as evidenced by a letter from the Rating Agency.

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<PAGE>

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09.             Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10.             Appointment of Co-Trustee or
                                            Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
the Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.

                                      -126-

<PAGE>

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.

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

                  SECTION 8.11.             [intentionally omitted].

                  SECTION 8.12.             Appointment of Office or Agency.

                  The Trustee will appoint an office or agency in the City of
Minneapolis, Minnesota where the Certificates may be surrendered for
registration of transfer or exchange, and presented for final distribution, and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served.

                  SECTION 8.13.             Representations and Warranties.

                  The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:

                           (i) It is duly organized, validly existing and in
good standing under the laws of the United States.

                           (ii) The execution and delivery of this Agreement by
it, and the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or any of its
assets.

                           (iii) It has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement.

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<PAGE>

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

                           (v) It is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in its
good faith and reasonable judgment, is likely to affect materially and adversely
either the ability of the it to perform its obligations under this Agreement or
the financial condition of it.

                           (vi) No litigation is pending or, to the best of its
knowledge, threatened against it which would prohibit it from entering into this
Agreement or, in its good faith reasonable judgment, is likely to materially and
adversely affect either the ability of it to perform its obligations under this
Agreement or the financial condition of it.

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<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01              Termination Upon Repurchase or
                                            Liquidation of the Trust Fund.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee with respect to the Mortgage Loans (other than the obligations of
the Master Servicer to the Trustee pursuant to Section 8.05 and of the Master
Servicer to provide for and the Trustee to make payments to the Holders of the
related Class(es) of Certificates as hereinafter set forth) shall terminate upon
payment to the Certificateholders and the deposit of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Master Servicer of all Group I Mortgage Loans and related REO
Property remaining in the Trust Fund and the purchase by the Master Servicer of
all Group II Mortgage Loans and related REO Property remaining in the Trust Fund
(ii) the final payment or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan or REO Property remaining in the Trust Fund;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof. The purchase by the Master
Servicer of all the Group I Mortgage Loans and related REO Property or the
purchase by the Master Servicer of all the Group II Mortgage Loans and related
REO Property shall be at a price (the "Termination Price") equal to the greater
of (A) the aggregate Purchase Price of all the Mortgage Loans included in the
related Loan Groups, plus the appraised value of each REO Property, if any,
included in such Loan Groups, such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee in their reasonable
discretion and (B) the aggregate fair market value of all of the assets in the
Loan Groups (as determined by the Master Servicer, with the consent of the
Trustee, as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01).

                  (b) The Master Servicer shall have the right to purchase all
of the Group I Mortgage Loans and each REO Property remaining in Loan Group I-A
and Loan Group I-B pursuant to clause (i) of the preceding paragraph no later
than the Determination Date in the month immediately preceding the Distribution
Date on which the Group I Certificates will be retired; provided, however, that
the Master Servicer, as provided above, may elect to purchase all of the Group I
Mortgage Loans and each REO Property remaining in Loan Group I-A and Loan Group
I-B pursuant to clause (i) above only if the aggregate Stated Principal Balance
of the Group I Mortgage Loans and each REO Property remaining in Loan Group I-A
and Loan Group I-B at the time of such election is reduced to less than 5% of
the aggregate Stated Principal Balance of the Group I Mortgage Loans at the
Cut-off Date. The Master Servicer shall have the right to purchase all of the
Group II Mortgage Loans and each REO Property remaining in Loan Group II-A and
Loan Group II-B pursuant to clause (i) of the preceding paragraph no later than
the Determination Date in the month immediately preceding the Distribution Date
on which the Group II Certificates will be

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<PAGE>

retired; provided, however, that the Master Servicer, as provided above, may
elect to purchase all of the Group II Mortgage Loans and each REO Property
remaining in the Loan Group II-A and Loan Group II-B pursuant to clause (i)
above only if the aggregate Stated Principal Balance of the Group II Mortgage
Loans and each REO Property remaining in Loan Group II-A and Loan Group II-B at
the time of such election is reduced to less than 10% of the aggregate Stated
Principal Balance of the Group II Mortgage Loans at the Cut-off Date. For
federal income tax purposes, the purchase by the Master Servicer of all Mortgage
Loans and all REO Properties underlying the Regular Interests in either REMIC I
or REMIC II is intended to facilitate a redemption of such Regular Interests
pursuant to a "cleanup call" within the meaning of Treasury regulation section
1.860G-2(j). Notwithstanding the foregoing, the Master Servicer shall have the
right to transfer, sell or assign its rights to purchase all of the Mortgage
Loans and each REO Property remaining in any Loan Group.

                  (c) Notice of the liquidation of the Regular Interests in a
Loan Group shall be given promptly by the Trustee by letter to
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property remaining in such
Loan Group by the Master Servicer, not earlier than the 15th day and not later
than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
specifying (i) the Distribution Date upon which the REMIC (or in the case of the
second REMIC to be terminated, the Trust Fund) will terminate and final payment
of the related Certificates will be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
Certificates from and after the Interest Accrual Period relating to the final
Distribution Date therefor and (iv) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee. In
the event such notice is given in connection with the purchase of all of the
Mortgage Loans and each REO Property remaining in a Loan Group by the Master
Servicer, the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account not later than the related Master Servicer Remittance Date
of the month in which such distribution will be made an amount in immediately
available funds equal to the Termination Price. Upon certification to the
Trustee by a Servicing Officer of the making of such final deposit, the Trustee
shall promptly release or cause to be released to the Master Servicer the
Mortgage Files for the remaining Mortgage Loans in such Loan Group, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to

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<PAGE>

surrender their Certificates for cancellation in order to receive the final
distribution with respect thereto. If within one year after the second notice
all such Certificates shall not have been surrendered for cancellation, the
Trustee shall, directly or through an agent, mail a final notice to remaining
related non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Trustee shall pay to
Salomon Smith Barney Inc. all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Regular Interests of either REMIC I or REMIC II, such REMIC
shall terminate. Upon the termination of the second REMIC in the Trust Fund, the
Trust Fund shall terminate.

                  SECTION 9.02              Additional Termination Requirements.

                  (a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property in REMIC or REMIC II, such REMIC shall be
terminated in accordance with the following additional requirements (or in
connection with the final payment on or other liquidation of the last Mortgage
Loan or REO Property remaining in such REMIC, the additional requirement
specified in clause (i) below):

                  (i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the REMIC's final Tax Return
pursuant to Treasury regulation Section 1.860F- 1, and such termination shall
satisfy all requirements of a qualified liquidation under Section 860F of the
Code and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Master Servicer;

                  (ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the Trustee shall
sell all of the assets of the related REMIC to the Master Servicer for cash; and

                  (iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Holders of the applicable Class of Residual Certificates all
cash on hand in the REMIC (other than cash retained to meet claims), and the
REMIC shall terminate at that time.

                  (b) At the expense of the Master Servicer (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of the REMIC pursuant to
this Section 9.02.

                                      -131-

<PAGE>

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for the related REMIC, which authorization shall be binding upon all successor
Certificateholders.

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<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01.            REMIC Administration.

                  (a) The Trustee shall elect to treat each of REMIC I and REMIC
II as a REMIC under the Code and, if necessary, under applicable state law. Such
election shall be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of the Group I
Certificates shall be designated as the Regular Interests in REMIC I and the
Class R-I Certificates shall be designated as the Residual Interests in REMIC I.
The Group II Certificates shall be designated as the Regular Interests in REMIC
II and the Class R-II Certificates shall be designated as the Residual Interests
in REMIC II. The Trustee shall not permit the creation of any "interests" in the
REMIC (within the meaning of Section 860G of the Code) other than the interests
represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to either REMIC I or REMIC
II that involve the Internal Revenue Service or state tax authorities), other
than the expense of obtaining any tax related Opinion of Counsel as specified
herein. The Trustee, as agent for both of REMIC I's and REMIC II's tax matters
person, shall (i) act on behalf of the Trust Fund in relation to any tax matter
or controversy involving either REMIC I or REMIC II and (ii) represent the Trust
Fund in any administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority with respect thereto. The holder of
the largest Percentage Interest of each Class of Residual Certificates shall be
designated, in the manner provided under Treasury regulations section
1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1, as the tax
matters person of the related REMIC created hereunder. By their acceptance
thereof, the holder of the largest Percentage Interest of the Residual
Certificates hereby agrees to irrevocably appoint the Trustee or an Affiliate as
its agent to perform all of the duties of the tax matters person for the Trust
Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of the Trust Fund created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee without any
right of reimbursement therefor. The Master Servicer shall provide on a timely
basis to the Trustee or its designee such information with respect to the assets
of the Trust Fund as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this Article.

                  (e) The Trustee shall perform on behalf of each of REMIC I and
REMIC II all reporting and other tax compliance duties that are the
responsibility of the REMIC under the Code,

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<PAGE>

the REMIC Provisions or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties, as
required by the Code, the REMIC Provisions or other such compliance guidance,
the Trustee shall provide (i) to any Transferor of a Residual Certificate such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any Person who is not a Permitted
Transferee, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of REMIC I and REMIC II. The Master Servicer shall provide on a
timely basis to the Trustee such information with respect to the assets of the
Trust Fund, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Master Servicer and the Trustee shall take such action
and shall cause each REMIC created hereunder to take such action as shall be
necessary to create or maintain the status thereof as a REMIC under the REMIC
Provisions. The Master Servicer and the Trustee shall not take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of REMIC I or REMIC II as a REMIC or (ii)
result in the imposition of a tax upon the Trust Fund (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, an "Adverse REMIC Event") unless the Trustee has
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee,
to the extent the Trustee is taking such action on behalf of the
Certificateholders) to the effect that the contemplated action will not, with
respect to either REMIC I or REMIC II, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action. In addition, prior
to taking any action with respect to REMIC I or REMIC II or the respective
assets of each, or causing REMIC I or REMIC II to take any action, which is not
contemplated under the terms of this Agreement, the Master Servicer will consult
with the Trustee or its designee, in writing, with respect to whether such
action could cause an Adverse REMIC Event to occur with respect to either REMIC
I or REMIC II, and the Master Servicer shall not take any such action or cause
either REMIC I or REMIC II to take any such action as to which the Trustee has
advised it in writing that an Adverse REMIC Event could occur. The Trustee may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee (to the extent the
Trustee is taking such action on behalf of the Certificateholders). At all times
as may be required by the Code, the Trustee will ensure that substantially all
of the assets of both REMIC I and REMIC II will consist of "qualified mortgages"

                                      -134-

<PAGE>

as defined in Section 860G(a)(3) of the Code and "permitted investments" as
defined in Section 860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of the REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of the REMIC as defined
in Section 860G(c) of the Code, on any contributions to the REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) On or before April 15 of each calendar year, commencing
April 15, 2002, the Trustee shall deliver to the Master Servicer and the Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X (without regard to the actions of any
Person other than the Trustee) .

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC I and REMIC II on a
calendar year and on an accrual basis. The Trustee will apply for an Employee
Identification Number from the Internal Revenue Service via Form SS-4 or such
other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to either REMIC I or REMIC II other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause the
related REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject such REMIC to any tax under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which REMIC I or REMIC II will receive a fee or other
compensation for services nor permit either such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

                  SECTION 10.02.            Prohibited Transactions and
                                            Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a

                                      -135-

<PAGE>

purchase of Mortgage Loans pursuant to Article II or III of this Agreement), nor
acquire any assets for either REMIC I or REMIC II (other than REO Property
acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any
investments in the Collection Account or the Distribution Account for gain, nor
accept any contributions to either REMIC I or REMIC II after the Closing Date
(other than a Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee, to the extent the Trustee is taking such action on behalf of the
Certificateholders) that such sale, disposition, substitution, acquisition or
contribution will not (a) affect adversely the status of either REMIC I or REMIC
II as a REMIC or (b) cause either REMIC I or REMIC II to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

                  SECTION 10.03.            Master Servicer and Trustee
                                            Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer as a result of a breach of the
Trustee's covenants set forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X.

                                      -136-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01.            Amendment.

                   This Agreement may be amended from time to time by the
Depositor, the Master Service and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders) or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.

                  This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner, other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on either REMIC I or REMIC II pursuant
to the REMIC Provisions or cause either REMIC I or REMIC II to fail to qualify
as a REMIC at any time that any Certificates are outstanding.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the

                                      -137-

<PAGE>

authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee, to
the extent the Trustee is taking such action on behalf of the
Certificateholders.

                  Notwithstanding the foregoing, the Trustee may, but shall not
be obligated to, enter into any amendment pursuant to this Section that affects
its rights, duties and immunities under this Agreement or otherwise.

                  SECTION 11.02.            Recordation of Agreement;
                                            Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03.            Limitation on Rights of
                                            Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this

                                      -138-

<PAGE>

Agreement, unless (i) such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and (ii) the Holders of Certificates entitled to at least 25% of the
Voting Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 15 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatsoever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section, each and every Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

                  SECTION 11.04.            Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

                  SECTION 11.05.            Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 390 Greenwich Street, New York, New York 10013,
Attention: Mortgage Finance Group (telecopy number (212) 723-8604), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer and the Trustee in writing by the Depositor, (b) in the case of the
Master Servicer, Union Planters PMAC, Inc., 215 Forrest Street, Hattiesburg,
Mississippi 39401-3476 Attention: Morgan McCarty (telecopy number (601) 583-
7100), or such other address or telecopy number as may hereafter be furnished to
the Trustee and the Depositor in writing by the Master Servicer, and (c) in the
case of the Trustee, Wells Fargo Bank Minnesota, N.A., 11000 Broken Land
Parkway, Columbia, Maryland 21044, Attention: Union Planters Mortgage
Pass-Through Certificates, Series 2001-UP1 (telecopy number (410) 884-2360),
with a copy to Wells Fargo Bank Minnesota, N.A., Sixth and Marquette,
Minneapolis, Minnesota 55479, Attention: Union Planters Mortgage Pass-Through
Certificates, Series 2001-UP1 (telecopy number (612) 667-3539), or such other
address or telecopy number as may hereafter be furnished to the Master Servicer
and the Depositor in writing by the Trustee. Any notice required or permitted to
be given to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or

                                      -139-

<PAGE>

not the Certificateholder receives such notice. A copy of any notice required to
be telecopied hereunder also shall be mailed to the appropriate party in the
manner set forth above.

                  SECTION 11.06.            Severability of Provisions.

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

                  SECTION 11.07.            Notice to Rating Agency.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agency with respect to each of the following of which it
has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Master Servicer Event of Default that
has not been cured or waived;

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

                  4. The repurchase or substitution of Mortgage Loans pursuant
to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
Certificates;

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

                  7. Any event that would result in the inability of the
Trustee, were it to succeed as Master Servicer, to make advances regarding
delinquent Mortgage Loans; and

                  8. The filing of any claim under the Master Servicer's blanket
bond and errors and omissions insurance policy required by Section 3.14 or the
cancellation or material modification of coverage under any such instrument.

                  In addition, the Trustee shall promptly furnish to the Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer, as required pursuant to Section 3.20 and Section 3.21,
shall promptly furnish to the Rating Agency copies of the following:

                  1. Each annual statement as to compliance described in Section
3.20; and

                                      -140-

<PAGE>

                  2. Each annual independent public accountants' servicing
report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's Ratings Services, 55 Water Street, 41st Floor, New York, NY
10041, Attention: Residential Mortgage Surveillance Group. and Fitch, Inc., One
State Street Plaza, New York, New York 10004, or such other addresses as each
such Rating Agency may designate in writing to the parties hereto.

                  SECTION 11.08.            Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09.            Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Depositor,
then, (a) it is the express intent of the parties that such conveyance be deemed
a pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt
or other obligation of the Depositor and (b)(1) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York;
(2) the conveyance provided for in Section 2.01 hereof shall be deemed to be a
grant by the Depositor to the Trustee of a security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute

                                      -141-

<PAGE>

and unconditional sale of the Mortgage Loans and assets constituting the Trust
Fund by the Depositor to the Trustee.

                                      -142-

<PAGE>

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

                                           SALOMON BROTHERS MORTGAGE
                                           SECURITIES VII, INC.,
                                           as Depositor

                                           By:  /s/ Matthew R. Bollo
                                              ------------------------------
                                           Name:    Matthew R. Bollo
                                           Title:   Assistant Vice President

                                           UNION PLANTERS PMAC, INC.,
                                           as Master Servicer

                                           By:  /s/ Morgan McCarty
                                              ------------------------------
                                           Name:    Morgan McCarty
                                           Title:   President

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:  /s/ Randall Reider
                                              ------------------------------
                                           Name:    Randall Reider
                                           Title:   Assistant Vice President

                                      -143-

<PAGE>

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

                  On the ____ day of March 2001, before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.

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

                                                Notary Public

[Notarial Seal]

                                      -144-

<PAGE>

STATE OF ______________    )
                           ) ss.:
COUNTY OF _____________    )

                  On the ____ day of March 2001, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
________________ of Union Planters PMAC, Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                  Notary Public

[Notarial Seal]

                                      -145-

<PAGE>

STATE OF ____________      )
                           ) ss.:
COUNTY OF ____________     )

                  On the ____ day of March 2001, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
_______________ of Wells Fargo Bank Minnesota, National Association, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

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

                                                     Notary Public

[Notarial Seal]

                                      -146-

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                         FORM OF CLASS AF-1 CERTIFICATE

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

Series 2001-UP1, Class AF-1                Aggregate Certificate Principal
                                           Balance of Class AF-1 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $79,642,448.00

Date of Agreement and Cut-off Date:        Denomination: $79,642,448.00
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC,Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

                                           CUSIP: 79548K 5Q 7

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-1-1

<PAGE>

            UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

             SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class AF-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class AF-1 Certificates in REMIC I created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon the
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose as provided in the Agreement.

                                      A-1-2

<PAGE>

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                                      A-1-3

<PAGE>

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-1-4

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class AF-1 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-1-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2
                                   -----------

                         FORM OF CLASS AF-2 CERTIFICATE

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

Series 2001-UP1, Class AF-2                Aggregate Certificate Principal
                                           Balance of Class AF-2 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $13,497,833.00

Date of Agreement and Cut-off Date:        Denomination: $13,497,833.00
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

                                           CUSIP: 79548K 5R 5

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-2-1

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class AF-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class AF-2 Certificates in REMIC I created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AF-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-2-2

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                      A-2-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-2-4

<PAGE>

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

Dated:  March __, 2001

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION
                                            as Trustee

                                           By:_________________________________
                                                     Authorized Officer

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

          This is one of the Class AF-2 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-2-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-2-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-2-7

<PAGE>

                                   EXHIBIT A-3
                                   -----------

                         FORM OF CLASS AV-1 CERTIFICATE

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

Series 2001-UP1, Class AV-1                Aggregate Certificate Principal
                                           Balance of Class AV-1 Certificates as
Pass-Through Rate:  Variable (As           of the Issue Date: $219,510,286.00
calculated in the Agreement)
                                           Denomination: $219,510,286.00

Date of Agreement and Cut-off Date:        Master Servicer: Union Planters
March 1, 2001                              PMAC, Inc.

First Distribution Date: April 25, 2001    Trustee: Wells Fargo Bank Minnesota,
                                           National Association
No. 1
                                           Issue Date: March 28, 2001

                                           CUSIP: 79548K 5N 4

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-3-1

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class AV-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class AV-1 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AV-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-3-2

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                      A-3-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-3-4

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class AV-1 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-3-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-3-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-3-7

<PAGE>

                                   EXHIBIT A-4
                                   -----------

                         FORM OF CLASS AV-2 CERTIFICATE

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

Series 2001-UP1, Class AV-2                Aggregate Certificate Principal
                                           Balance of Class AV-2 Certificates as
Pass-Through Rate:  Variable (As           of the Issue Date: $56,117,650.00
calculated in the Agreement)
                                           Denomination: $56,117,650.00
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No. 1                                      National Association

                                           Issue Date: March 28, 2001

                                           CUSIP: 79548K 5P 9

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-4-1

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class AV-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class AV-2 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AV-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-4-2

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                      A-4-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-4-4

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class AV-2 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-4-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-4-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-4-7

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                          FORM OF CLASS IO CERTIFICATE

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

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

Series 2001-UP1, Class IO                  Aggregate Notional Amount of Class IO
                                           Certificates as of the Issue Date:
Pass-Through Rate:  Variable (As           $97,332,880.00
calculated in the Agreement)
                                           Notional Amount of this Class IO
Date of Agreement and Cut-off Date:        Certificate: $97,332,880.00
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

                                      A-5-1

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  TRUSTEE  OR ANY OF THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS
     CERTIFICATE  NOR THE UNDERLYING  MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Union Planters Bank, National Association is the
registered owner of a Percentage Interest (obtained by dividing the Notional
Amount of this Certificate by the aggregate Notional Amount of the Class IO
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class IO Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class IO Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon the
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose as provided in the Agreement.

                                      A-5-2

<PAGE>

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A

                                      A-5-3

<PAGE>

under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the party designated in the Agreement at a price determined
as provided in the Agreement from REMIC I of all the Mortgage Loans and each REO
Property remaining therein, and (ii) the final payment (or any advance with
respect thereto) on or other liquidation of the last Mortgage Loan or REO
Property remaining in REMIC I. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan remaining
therein at a price determined as provided in the Agreement. The exercise of such
right will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 5% of the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date.

                                      A-5-4

<PAGE>

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-5-5

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-5-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-5-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-5-8

<PAGE>

                                   EXHIBIT A-6
                                   -----------

                          FORM OF CLASS PO CERTIFICATE

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

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

Series 2001-UP1, Class PO                  Aggregate Certificate Principal
                                           Balance of Class PO Certificates as
Pass-Through Rate: 0.00% per annum         of the Issue Date: $2,002,609.00

Date of Agreement and Cut-off Date:        Denomination: $2,002,609.00
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-6-1

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Bank, National Association is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
PO Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class PO Certificates in REMIC I created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class PO Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-6-2

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                      A-6-3

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                      A-6-4

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-6-5

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-6-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-6-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-6-8

<PAGE>

                                   EXHIBIT A-7
                                   -----------

                         FORM OF CLASS BF-1 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES  AND
     THE CLASS AF-2  CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
     REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                      A-7-1

<PAGE>

Series 2001-UP1, Class BF-1                Aggregate Certificate Principal
                                           Balance of Class BF-1 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $1,216,661.00

Date of Agreement and Cut-off Date:        Denomination: $1,216,661.00
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-7-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-1 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-7-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                      A-7-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                      A-7-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-7-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK, MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BF-1 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-7-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-7-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-7-9

<PAGE>

                                   EXHIBIT A-8
                                   -----------

                         FORM OF CLASS BF-2 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES,  THE
     CLASS AF-2 CERTIFICATES AND THE CLASS BF-1 CERTIFICATES TO THE EXTENT
     DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                      A-8-1

<PAGE>

Series 2001-UP1, Class BF-2                Aggregate Certificate Principal
                                           Balance of Class BF-2 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $340,665.08

Date of Agreement and Cut-off Date:        Denomination: $340,665.08
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-8-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-2 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-8-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                      A-8-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                      A-8-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-8-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

                  This is one of the Class BF-2 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-8-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-8-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-8-9

<PAGE>

                                   EXHIBIT A-9
                                   -----------

                         FORM OF CLASS BF-3 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES,  THE
     CLASS AF-2  CERTIFICATES,  THE CLASS BF-1  CERTIFICATES AND THE CLASS
     BF-2  CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT  REFERRED
     TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                      A-9-1

<PAGE>

Series 2001-UP1, Class BF-3                Aggregate Certificate Principal
                                           Balance of Class BF-3 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $194,665.76

Date of Agreement and Cut-off Date:        Denomination: $194,665.76
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                      A-9-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-3
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-3 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                      A-9-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                      A-9-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                      A-9-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-9-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BF-3 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                      A-9-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                      A-9-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                      A-9-9

<PAGE>

                                  EXHIBIT A-10
                                  ------------

                         FORM OF CLASS BF-4 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES,  THE
     CLASS AF-2 CERTIFICATES,  THE CLASS BF-1 CERTIFICATES, THE CLASS BF-2
     CERTIFICATES AND THE CLASS BF-3  CERTIFICATES TO THE EXTENT DESCRIBED
     IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-10-1

<PAGE>

Series 2001-UP1, Class BF-4                Aggregate Certificate Principal
                                           Balance of Class BF-4 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $194,665.76

Date of Agreement and Cut-off Date:        Denomination: $194,665.76
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-10-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-4 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-10-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-10-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-10-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-10-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BF-4 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-10-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-10-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-10-9

<PAGE>

                                  EXHIBIT A-11
                                  ------------

                         FORM OF CLASS BF-5 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES,  THE
     CLASS AF-2 CERTIFICATES,  THE CLASS BF-1 CERTIFICATES, THE CLASS BF-2
     CERTIFICATES,   THE  CLASS  BF-3  CERTIFICATES  AND  THE  CLASS  BF-4
     CERTIFICATES  TO THE EXTENT  DESCRIBED IN THE  AGREEMENT  REFERRED TO
     HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-11-1

<PAGE>

Series 2001-UP1, Class BF-5                Aggregate Certificate Principal
                                           Balance of Class BF-5 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $97,332.88

Date of Agreement and Cut-off Date:        Denomination: $97,332.88
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-11-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-5 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-5 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-11-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-11-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-11-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-11-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BF-5 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-11-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-11-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-11-9

<PAGE>

                                  EXHIBIT A-12
                                  ------------

                         FORM OF CLASS BF-6 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF-1  CERTIFICATES,  THE
     CLASS AF-2 CERTIFICATES,  THE CLASS BF-1 CERTIFICATES, THE CLASS BF-2
     CERTIFICATES,   THE  CLASS   BF-3   CERTIFICATES,   THE  CLASS   BF-4
     CERTIFICATES AND THE BF-5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
     AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-12-1

<PAGE>

Series 2001-UP1, Class BF-6                Aggregate Certificate Principal
                                           Balance of Class BF-6 Certificates as
Pass-Through Rate: 7.000% per annum        of the Issue Date: $145,999.32

Date of Agreement and Cut-off Date:        Denomination: $145,999.32
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-12-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BF-6
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-6 Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BF-6 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-12-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-12-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-12-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-12-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BF-6 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-12-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-12-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-12-9

<PAGE>

                                  EXHIBIT A-13
                                  ------------

                         FORM OF CLASS BV-1 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES  AND
     THE CLASS AV-2  CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
     REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-13-1

<PAGE>

Series 2001-UP1, Class BV-1                Aggregate Certificate Principal
                                           Balance of Class BV-1 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $5,932,149.80
calculated in the Agreement)
                                           Denomination: $5,932,149.80
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No. 1                                      National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-13-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-1 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-13-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-13-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-13-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-13-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK, MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-1 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-13-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-13-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-13-9

<PAGE>

                                  EXHIBIT A-14
                                  ------------

                         FORM OF CLASS BV-2 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES,  THE
     CLASS AV-2 CERTIFICATES AND THE CLASS BV-1 CERTIFICATES TO THE EXTENT
     DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-14-1

<PAGE>

Series 2001-UP1, Class BV-2                Aggregate Certificate Principal
                                           Balance of Class BV-2 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $2,604,358.45
calculated in the Agreement)
                                           Denomination: $2,604,358.45
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No.1                                       National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-14-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT  REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS  MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE  TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
     ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-2 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-14-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-14-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-14-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-14-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-2 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-14-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-14-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-14-9

<PAGE>

                                  EXHIBIT A-15
                                  ------------

                         FORM OF CLASS BV-3 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES,  THE
     CLASS AV-2  CERTIFICATES,  THE CLASS BV-1  CERTIFICATES AND THE CLASS
     BV-2  CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT  REFERRED
     TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-15-1

<PAGE>

Series 2001-UP1, Class BV-3                Aggregate Certificate Principal
                                           Balance of Class BV-3 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $1,591,552.39
calculated in the Agreement)
                                           Denomination: $1,591,552.39
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No. 1                                      National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-15-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-3
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-3 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-15-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-15-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-15-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-15-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-3 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-15-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-15-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-15-9

<PAGE>

                                  EXHIBIT A-16
                                  ------------

                         FORM OF CLASS BV-4 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES,  THE
     CLASS AV-2 CERTIFICATES,  THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2
     CERTIFICATES AND THE CLASS BV-3  CERTIFICATES TO THE EXTENT DESCRIBED
     IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-16-1

<PAGE>

Series 2001-UP1, Class BV-4                Aggregate Certificate Principal
                                           Balance of Class BV-4 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $1,736,238.97
calculated the Agreement)
                                           Denomination: $1,736,238.97
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No. 1                                      National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-16-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-4 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-16-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-16-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-16-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-16-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-4 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-16-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-16-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-16-9

<PAGE>

                                  EXHIBIT A-17
                                  ------------

                         FORM OF CLASS BV-5 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES,  THE
     CLASS AV-2 CERTIFICATES,  THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2
     CERTIFICATES,   THE  CLASS  BV-3  CERTIFICATES  AND  THE  CLASS  BV-4
     CERTIFICATES  TO THE EXTENT  DESCRIBED IN THE  AGREEMENT  REFERRED TO
     HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-17-1

<PAGE>

Series 2001-UP1, Class BV-5                Aggregate Certificate Principal
                                           Balance of Class BV-5 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $868,119.48
calculated in the Agreement)
                                           Denomination: $868,119.48
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters PMAC,
                                           Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
No. 1                                      National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-17-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-5 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-5 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-17-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-17-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-17-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-17-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-5 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-17-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-17-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-17-9

<PAGE>

                                  EXHIBIT A-18
                                  ------------

                         FORM OF CLASS BV-6 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1  CERTIFICATES,  THE
     CLASS AV-2 CERTIFICATES,  THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2
     CERTIFICATES,   THE  CLASS   BV-3   CERTIFICATES,   THE  CLASS   BV-4
     CERTIFICATES AND THE BV-5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
     AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

                                     A-18-1

<PAGE>

Series 2001-UP1, Class BV-6                No. 1 Aggregate Certificate Principal
                                           Balance of Class BV-6 Certificates as
Pass-Through Rate: Variable (As            of the Issue Date: $1,012,806.06
calculated in the Agreement)
                                           Denomination: $1,012,806.06
Date of Agreement and Cut-off Date:
March 1, 2001                              Master Servicer: Union Planters
                                           PMAC, Inc.
First Distribution Date: April 25, 2001
                                           Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

     DISTRIBUTIONS  IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH   HEREIN.
     ACCORDINGLY,  THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE  DENOMINATION
     OF THIS CERTIFICATE.

                                     A-18-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class BV-6
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-6 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class BV-6 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

                                     A-18-3

<PAGE>

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

                                     A-18-4

<PAGE>

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC II, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC II of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC II all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans

                                     A-18-5

<PAGE>

at the time of purchase being less than 5% of the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-18-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

          This is one of the Class BV-6 Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-18-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-18-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-18-9

<PAGE>

                                  EXHIBIT A-19
                                  ------------

                          FORM OF CLASS R-I CERTIFICATE

     THIS  CERTIFICATE  MAY  NOT BE  TRANSFERRED  TO A  NON-UNITED  STATES
     PERSON.

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

     ANY RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IN  ACCORDANCE  WITH THE  PROVISIONS OF SECTION 5.02 OF THE
     AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

     ANY RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
     TRUSTEE THAT (A) SUCH  TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
     POSSESSION THEREOF,  ANY STATE OR POLITICAL  SUBDIVISION THEREOF, ANY
     FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION,  OR ANY AGENCY OR
     INSTRUMENTALITY OF ANY OF THE FOREGOING,  (2) ANY ORGANIZATION (OTHER
     THAN A  COOPERATIVE  DESCRIBED  IN  SECTION  521 OF THE CODE) THAT IS
     EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE

                                     A-19-1

<PAGE>

     CODE  UNLESS  SUCH  ORGANIZATION  IS  SUBJECT  TO THE TAX  IMPOSED BY
     SECTION 511 OF THE CODE,  (3) ANY  ORGANIZATION  DESCRIBED IN SECTION
     1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
     CLAUSES  (1),  (2) OR  (3)  SHALL  HEREINAFTER  BE  REFERRED  TO AS A
     "DISQUALIFIED  ORGANIZATION")  OR  (4)  AN  AGENT  OF A  DISQUALIFIED
     ORGANIZATION  AND (B) NO  PURPOSE OF SUCH  TRANSFER  IS TO IMPEDE THE
     ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH  TRANSFEREE  SATISFIES
     CERTAIN ADDITIONAL  CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
     THE PROPOSED  TRANSFEREE.  NOTWITHSTANDING  THE  REGISTRATION  IN THE
     CERTIFICATE  REGISTER OF ANY TRANSFER,  SALE OR OTHER  DISPOSITION OF
     THIS  CERTIFICATE  TO A  DISQUALIFIED  ORGANIZATION  OR AN AGENT OF A
     DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
     NO LEGAL  FORCE OR EFFECT  WHATSOEVER  AND SUCH  PERSON  SHALL NOT BE
     DEEMED  TO  BE  A   CERTIFICATEHOLDER   FOR  ANY  PURPOSE  HEREUNDER,
     INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF  DISTRIBUTIONS ON THIS
     CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE  BY ACCEPTANCE  HEREOF
     SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH
     AND THE  PROVISIONS OF SECTION  5.02(D) OF THE AGREEMENT  REFERRED TO
     HEREIN. ANY PERSON THAT IS A DISQUALIFIED  ORGANIZATION IS PROHIBITED
     FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2001-UP1, Class R-I                 Aggregate Percentage Interest of
                                           Class R-I Certificates as of the
Date of Agreement and Cut-off Date:        Issue Date: 100.00%
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

                                     A-19-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class R-I
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class R-I Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-I Certificates on such Distribution
Date pursuant to the Agreement. All distributions to the Holder of this
Certificate under the Agreement will be made or caused to be made by or on
behalf of the Trustee by wire transfer in immediately available funds to the
account of the Person entitled thereto if such Person shall have so notified the
Trustee in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender

                                     A-19-3

<PAGE>

of this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that

                                     A-19-4

<PAGE>

such a transfer of this Certificate is to be made without registration or
qualification, the Trustee shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit F-1, and (ii) in all other cases, an
Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee or the Master
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor or the Trustee is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-I Certificates have been designated as a
residual interest in REMIC I, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon REMIC I.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                     A-19-5

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the Trust Fund, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the Trust Fund of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all the Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining therein at a price determined as
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-19-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-19-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-19-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-19-9

<PAGE>

                                  EXHIBIT A-20
                                  ------------

                         FORM OF CLASS R-II CERTIFICATE

     THIS  CERTIFICATE  MAY  NOT BE  TRANSFERRED  TO A  NON-UNITED  STATES
     PERSON.

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

     ANY RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IN  ACCORDANCE  WITH THE  PROVISIONS OF SECTION 5.02 OF THE
     AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS  REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR  IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT  FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER  APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS  CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH  A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),  OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN  COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

     ANY RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
     TRUSTEE THAT (A) SUCH  TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
     POSSESSION THEREOF,  ANY STATE OR POLITICAL  SUBDIVISION THEREOF, ANY
     FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION,  OR ANY AGENCY OR
     INSTRUMENTALITY OF ANY OF THE FOREGOING,  (2) ANY ORGANIZATION (OTHER
     THAN A  COOPERATIVE  DESCRIBED  IN  SECTION  521 OF THE CODE) THAT IS
     EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE

                                     A-20-1

<PAGE>

     CODE  UNLESS  SUCH  ORGANIZATION  IS  SUBJECT  TO THE TAX  IMPOSED BY
     SECTION 511 OF THE CODE,  (3) ANY  ORGANIZATION  DESCRIBED IN SECTION
     1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
     CLAUSES  (1),  (2) OR  (3)  SHALL  HEREINAFTER  BE  REFERRED  TO AS A
     "DISQUALIFIED  ORGANIZATION")  OR  (4)  AN  AGENT  OF A  DISQUALIFIED
     ORGANIZATION  AND (B) NO  PURPOSE OF SUCH  TRANSFER  IS TO IMPEDE THE
     ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH  TRANSFEREE  SATISFIES
     CERTAIN ADDITIONAL  CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
     THE PROPOSED  TRANSFEREE.  NOTWITHSTANDING  THE  REGISTRATION  IN THE
     CERTIFICATE  REGISTER OF ANY TRANSFER,  SALE OR OTHER  DISPOSITION OF
     THIS  CERTIFICATE  TO A  DISQUALIFIED  ORGANIZATION  OR AN AGENT OF A
     DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
     NO LEGAL  FORCE OR EFFECT  WHATSOEVER  AND SUCH  PERSON  SHALL NOT BE
     DEEMED  TO  BE  A   CERTIFICATEHOLDER   FOR  ANY  PURPOSE  HEREUNDER,
     INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF  DISTRIBUTIONS ON THIS
     CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE  BY ACCEPTANCE  HEREOF
     SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH
     AND THE  PROVISIONS OF SECTION  5.02(D) OF THE AGREEMENT  REFERRED TO
     HEREIN. ANY PERSON THAT IS A DISQUALIFIED  ORGANIZATION IS PROHIBITED
     FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2001-UP1, Class R-II                Aggregate Percentage Interest of
                                           Class R-II Certificates as of the
Date of Agreement and Cut-off Date:        Issue Date: 100.00%
March 1, 2001
                                           Master Servicer: Union Planters
First Distribution Date: April 25, 2001    PMAC, Inc.

No. 1                                      Trustee: Wells Fargo Bank Minnesota,
                                           National Association

                                           Issue Date: March 28, 2001

                                     A-20-2

<PAGE>

                UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2001-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate
and adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE  DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE  SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN  SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE  UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY  OF THE UNITED
     STATES.

          This certifies that Union Planters Corporation is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class R-II
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class R-II Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-II Certificates on such Distribution
Date pursuant to the Agreement.
          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender

                                     A-20-3

<PAGE>

of this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that

                                     A-20-4

<PAGE>

such a transfer of this Certificate is to be made without registration or
qualification, the Trustee shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit F-1, and (ii) in all other cases, an
Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee or the Master
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor or the Trustee is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-II Certificates have been designated as a
residual interest in REMIC II, (B) it will include in its income a PRO RATA
share of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon REMIC II.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                     A-20-5

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the Trust Fund, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the Trust Fund of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all the Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining therein at a price determined as
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-20-6

<PAGE>

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

Dated:  March __, 2001

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Officer

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

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION,
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-20-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT MIN ACT -  Custodian
                                                             ---------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                     _________________
          of survivorship and not as                        (State)
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.

Dated:

                                       _____________________________________
                                       Signature by or on behalf of assignor

                                       _____________________________________
                                       Signature Guaranteed

                                     A-20-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ________________________________________. Applicable
statements should be mailed to ________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or ____________________, as its agent.

                                     A-20-9

<PAGE>

                                    EXHIBIT B
                                    ---------

                                   [RESERVED]

                                       B-1

<PAGE>

                                   EXHIBIT C-1
                                   -----------

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                       [Date]

Salomon Brothers Mortgage              Union Planters PMAC, Inc.
Securities VII, Inc.                   215 Forrest Street
390 Greenwich Street                   Hattiesburg, Mississippi 39401-3476
New York, New York  10013

          Re:  Pooling and Servicing Agreement, dated as of March 1, 2001, among
               Salomon Brothers Mortgage Securities VII, Inc. as Depositor Union
               Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
               Minnesota, National Association as Trustee, Union Planters
               Mortgage Pass-Through Certificates, Series 2001-UP1
               -----------------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or specifically identified in the exception report annexed
hereto), (i) subject to the next sentence, all documents required to be
delivered to it pursuant Section 2.01 of the Pooling and Servicing Agreement are
in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based
on its examination and only as to the foregoing, the information set forth in
the Mortgage Loan Schedule that corresponds to items (i), (ii), (iii) and (xiv)
of the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. With respect to any document required to be delivered pursuant to
clauses (vi), (viii) (to the extent not part of the original policy) and (ix),
we have not determined whether such documents should be contained in each
Mortgage File, but if such documents are contained in the Mortgage File, they
relate to the Mortgage Loan; and with respect to any document required to be
delivered pursuant to clause (vii), we have, with your permission, relied on a
schedule of Mortgage Loans received from or on behalf of the Seller.

                                      C-1-1

<PAGE>

     The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.

                                               WELLS FARGO BANK MINNESOTA,
                                               NATIONAL ASSOCIATION

                                               By:_____________________________
                                               Name:
                                               Title:

                                      C-1-2

<PAGE>

                                   EXHIBIT C-2
                                   -----------

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                            [Date]

Salomon Brothers Mortgage                   Union Planters PMAC, Inc.
Securities VII, Inc.                        215 Forrest Street
390 Greenwich Street                        Hattiesburg, Mississippi 39401-3476
New York, New York  10013

          Re:  Pooling and Servicing Agreement, dated as of March 1, 2001, among
               Salomon Brothers Mortgage Securities VII, Inc. as Depositor Union
               Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
               Minnesota, National Association as Trustee, Union Planters
               Mortgage Pass-Through Certificates, Series 2001-UP1
               -----------------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage loan paid in full or
listed on Schedule I hereto) it has received the applicable documents listed in
Section 2.01 of the Pooling and Servicing Agreement.

     The undersigned hereby certifies that, subject to the next sentence, as to
each Mortgage Loan identified on the Mortgage Loan Schedule, other than any
Mortgage Loan listed on Schedule I hereto, it has reviewed the documents listed
above and has determined that each such document appears to be complete and,
based on an examination of such documents, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i), (ii), (iii) and (xiv) of
the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. With respect to any document required to be delivered pursuant to
clauses (vi), (viii) (to the extent not part of the original policy) and (ix),
we have not determined whether such documents should be contained in each
Mortgage File, but if such documents are contained in the Mortgage File, they
relate to the Mortgage Loan; and with respect to any document required to be
delivered pursuant to clause (vii), we have, with your permission, relied on a
schedule of Mortgage Loans received from or on behalf of the Seller.

                                      C-2-1

<PAGE>

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

                                          By:_____________________________
                                          Name:
                                          Title:

                                      C-2-2

<PAGE>

                                   EXHIBIT C-3
                                   -----------

                    FORM OF TRUSTEE RECEIPT OF MORTGAGE NOTES

                                            [Date]

Salomon Brothers Mortgage                   Union Planters PMAC, Inc.
Securities VII, Inc.                        215 Forrest Street
390 Greenwich Street                        Hattiesburg, Mississippi 39401-3476
New York, New York  10013

          Re:  Pooling and Servicing Agreement, dated as of March 1, 2001, among
               Salomon Brothers Mortgage Securities VII, Inc. as Depositor Union
               Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
               Minnesota, National Association as Trustee, Union Planters
               Mortgage Pass-Through Certificates, Series 2001-UP1
               -----------------------------------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, we hereby
acknowledge the receipt of the original Mortgage Notes with any exceptions
thereto listed on Exhibit 1.

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                             WELLS FARGO BANK MINNESOTA,
                                             NATIONAL ASSOCIATION

                                             By:_____________________________
                                             Name:
                                             Title:

                                      C-3-1

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated March 26, 2001, between Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser") and Union Planters Bank, National
Association, a national banking association (the "Seller").

                              Preliminary Statement
                              ---------------------

                  The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser intends to deposit the Mortgage Loans into a
mortgage pool comprising the trust fund. The trust fund will be evidenced by a
single series of mortgage pass-through certificates designated as Series
2001-UP1 (the "Certificates"). The Certificates will consist of nineteen classes
of certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of March 1, 2001 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, Union Planters PMAC, Inc. as
master servicer (the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before March 28, 2001 (the "Closing
Date"), certain fixed and adjustable- rate, conventional residential mortgage
loans (the "Mortgage Loans"), having an aggregate principal balance as of the
close of business on March 1, 2001 (the "Cut-off Date") of approximately
$386,706,042.70 (the "Closing Balance"), after giving effect to all payments due
on the Mortgage Loans on or before the Cut-off Date, whether or not received.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that together shall describe such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement. The
Closing Schedule will conform to the requirements set forth in this Agreement
and to the definition of "Mortgage Loan Schedule" under the Pooling and
Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net sale proceeds of the Class A Certificates
(which amount is net of fees and expenses of Salomon Smith Barney, Inc.), plus
accrued interest and (ii) deliver to the Seller the Subordinate Certificates,
the Class IO Certificates, the Class PO Certificates and the Class R
Certificates (the "Union Planters Certificates").

<PAGE>

                                       -2-

                           (b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Cut-off Date, all other payments of principal due and
collected after the Cut-off Date, and all payments of interest on the Mortgage
Loans allocable to the period after the Cut-off Date. All scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date shall belong to the Seller.

                           (c) Pursuant to the Pooling and Servicing Agreement,
the Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the related Certificateholders.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell, transfer, assign, set over and convey to the Purchaser, without
recourse but subject to the terms of this Agreement, all of its right, title and
interest in, to and under the Mortgage Loans. The contents of each Mortgage File
not delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. In
connection with such transfer and assignment, the Seller does hereby deliver to,
and deposit with, the Purchaser, the following documents or instruments with
respect to each Mortgage Loan so transferred and assigned (a "Mortgage File"):

                  (i) the original Mortgage Note, endorsed by the originator or
         the originator's successor in interest (which in all cases will be the
         Seller or an Affiliate) in the following form: "Pay to the order of
         Wells Fargo Bank Minnesota, N.A., as Trustee under the applicable
         agreement, without recourse", or with respect to any lost Mortgage
         Note, an original Lost Note Affidavit stating that the original
         mortgage note was lost, misplaced or destroyed, together with a copy of
         the related mortgage note; PROVIDED, HOWEVER, that such substitutions
         of Lost Note Affidavits for original Mortgage Notes may occur only with
         respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance
         of which is less than or equal to 2.00% of the Pool Balance as of the
         Cut-off Date;

                  (ii) if in connection with any Mortgage Loan, the Depositor
         has not caused the original recorded Mortgage or power of attorney to
         be delivered to the Trustee because of a delay caused by the public
         recording office where such Mortgage or power of attorney has been
         delivered for recordation or because such Mortgage or power of attorney
         has been lost or because such public recording office retains the
         original recorded Mortgage or power of

<PAGE>

                                       -3-

         attorney, the Mortgage File shall include, in lieu of such Mortgage or
         power of attorney, a photocopy of such Mortgage or power of attorney,
         together with (a) in the case of a delay caused by the public recording
         office, an Officer's Certificate of the title insurer insuring the
         Mortgage stating that such Mortgage and power of attorney has been
         delivered to the appropriate public recording office for recordation
         and that the original recorded Mortgage or power of attorney or a copy
         of such Mortgage and power of attorney certified by such public
         recording office to be a true and complete copy of the original
         recorded Mortgage and power of attorney will be promptly delivered to
         the Trustee upon receipt by the Depositor; or (b) in the case where a
         public recording office retains the original recorded Mortgage or power
         of attorney or in the case where a Mortgage or power of attorney is
         lost after recordation in a public recording office, a copy of such
         Mortgage or power of attorney with the recording information thereon
         certified by such public recording office to be a true and complete
         copy of the original recorded Mortgage or power of attorney;

                  (iii) an original Assignment of the Mortgage executed by the
         originator or the originator's successor in interest (which in all
         cases will be the Seller or an Affiliate) in the following form: "Wells
         Fargo Bank Minnesota, N.A., as Trustee under the applicable agreement";

                  (iv) the original recorded Assignment or Assignments of the
         Mortgage showing a complete chain of assignment from the originator to
         the Person assigning the Mortgage to the Trustee as contemplated by the
         immediately preceding clause (iii), or if any such intervening
         assignment has not been returned from the applicable public recording
         office or has been lost or if such public recording office retains the
         original recorded Assignments of Mortgage, the Mortgage File shall
         include a photocopy of such intervening assignment, together with (a)
         in the case of a delay caused by the public recording, an Officer's
         Certificate of the title insurer insuring the Mortgage stating that
         such intervening Assignment of Mortgage has been delivered to the
         appropriate public recording office for recordation and that such
         original recorded intervening Assignment of Mortgage or a copy of such
         intervening Assignment of Mortgage certified by the appropriate public
         recording office to be a true and complete copy of the original
         recorded intervening Assignment of Mortgage will be promptly delivered
         to the Trustee upon receipt thereof by the Depositor; or (b) in the
         case of an intervening Assignment of Mortgage where a public recording
         office retains the original recorded intervening Assignment of Mortgage
         or in the case where an intervening Assignment of Mortgage is lost
         after recordation in a public recording office, a copy of such
         intervening Assignment with recording information thereon certified by
         such public recording office to be a true and complete copy of the
         original recorded intervening Assignment of Mortgage;

                  (v) the originals of all assumption, modification,
         consolidation or extension agreements, if any;

                  (vi) the original of any guarantee executed in connection with
         the Mortgage Note;

<PAGE>

                                       -4-

                  (vii) if such Mortgage Loan has a Loan-to-Value Ratio at the
         Cut-off Date in excess of 80% (as shown in the Mortgage Loan Schedule),
         the original Primary Insurance Policy, or in the event such original
         Primary Insurance Policy is unavailable, a written commitment from the
         mortgage insurer to issue such policy;

                  (viii) the original lender's title insurance policy, together
         with all endorsements or riders which were issued with or subsequent to
         the issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company or an attorney's title opinion, if customary in the related
         jurisdiction where the Mortgaged Property is located;

                  (ix) the original of any security agreement, chattel mortgage
         or equivalent document executed in connection with the Mortgage; and

                  (x) (A) the power of attorney pursuant to which Union Planters
         PMAC, Inc. is authorized to act on behalf of Jefferson Heritage Bank or
         (B) if necessary, a true and complete copy, certified as such by an
         officer of the Seller, of each certificate or other evidence of merger
         or change of name, if any of the Mortgage Loans were acquired by the
         Seller by merger or acquired or originated by the Seller while
         conducting business under a name other than its present name and such
         certificate or other evidence shall not have been recorded in the
         public recording office where the related Mortgage is required to be
         recorded.

                  Notwithstanding the foregoing, the parties hereto acknowledge
that on the Closing Date, the Seller will deliver to, and deposit with, the
Purchaser, the Mortgage Note and will deliver the remaining contents of each
Mortgage File within 60 days following the Closing Date.

                  The Seller shall cause all Assignments referred to in clause
(iii) above and, to the extent necessary, in (iv) above to be recorded;
PROVIDED, HOWEVER, the Seller need not cause to be recorded any Assignment which
relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and
the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan; PROVIDED, HOWEVER,
notwithstanding the delivery of any Opinion of Counsel, the Seller shall submit
each Assignment for recording, at no expense to the Trust Fund or Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Seller, (iv) the occurrence of a servicing
transfer as described in Section 7.02 of the Pooling and Servicing Agreement,
(v) with respect to any one Assignment the occurrence of a foreclosure relating
to the Mortgagor under the related Mortgage and (vi) on or after the 90th day on
which the payment for such Mortgage Loan was due and payable and not received.
Notwithstanding the foregoing, if the Seller fails to pay the cost of recording
the Assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expenses by the Trust as set forth in the Pooling and
Servicing Agreement. In

<PAGE>

                                       -5-

the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Seller shall promptly have a substitute Assignment prepared
or have such defect cured, as the case may be, and thereafter cause each such
Assignment to be duly recorded.

                  The Seller shall deliver or cause to be delivered to the
Purchaser promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan.

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

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser, the Master Servicer or the
Trustee in connection with enforcing any obligations of the Seller under this
Agreement will be promptly reimbursed by the Seller.

                           (e) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete

<PAGE>

                                       -6-

examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             SELLER

                  (a) The Seller hereby represents and warrants, as of the date
hereof and as of the Closing Date, and covenants, that:

                           (i) The Seller is a national banking association,
duly organized and validly existing and in good standing under the laws of the
United States with full corporate power and authority to conduct its business as
presently conducted by it to the extent material to the consummation of the
transactions contemplated herein. The Seller had the full corporate power and
authority to acquire the Mortgage Loans. The Seller has the full corporate power
and authority to own the Mortgage Loans and to transfer and convey the Mortgage
Loans to the Purchaser and has the full corporate power and authority to execute
and deliver, engage in the transactions contemplated by, and perform and observe
the terms and conditions of this Agreement;

                           (ii) This Agreement has been duly and validly
authorized, executed and delivered by the Seller, all requisite corporate action
having been taken, and (assuming the due authorization, execution and delivery
hereof by the Purchaser) constitutes the valid, legal and binding obligation of
the Seller, enforceable in accordance with its terms, except as such enforcement
may be limited by (A) bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, (B) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (C) public
policy considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities;

                           (iii) No consent, approval, authorization or order
of, registration or filing with, or notice to any governmental authority or
court is required, under federal laws for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agree ment
or the consummation by the Seller of any other transaction contemplated hereby
and by the Pooling and Servicing Agreement; provided, however, that the Seller
makes no representation or warranty regarding federal or state securities laws
in connection with the sale or distribution of the Certificates;

                           (iv) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Seller to the
Purchaser, any affiliate of the Purchaser or the Trustee for use in connection
with the purchase of the Mortgage Loans and the transactions contemplated
hereunder and under the Pooling and Servicing Agreement will contain any untrue
statement of a material fact, or omit a material fact necessary to make the
information, certificate, statement or report not misleading in any material
respect.

<PAGE>

                                       -7-

                           (v) Neither the sale of the Mortgage Loans to the
Purchaser, nor the execution, delivery or performance of this Agreement by the
Seller, conflicts or will conflict with or results or will result in a breach of
or constitutes or will constitute a default (or an event, which with notice or
lapse of time or both, would constitute a default) under (A) any terms or
provisions of the certificate of incorporation or by-laws of the Seller, (B) any
term or provision of any material agreement, contract, instrument or indenture,
to which the Seller is a party or by which the Seller or any of its property is
bound or (C) any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Seller or any of its property, or results or will result in the creation or
imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans;

                           (vi) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans;

                           (vii) There is no litigation currently pending or, to
the best of the Seller's knowledge, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates, the execution, delivery, performance or
enforceability of this Agreement or that would result in a material adverse
change in the financial condition of the Seller;

                           (viii) Each Mortgage Note, each Mortgage, each
Assignment and any other document required to be delivered by or on behalf of
the Seller under this Agreement or the Pooling and Servicing Agreement to the
Purchaser or any assignee, transferee or designee of the Purchaser for each
Mortgage Loan has been or will be, in accordance with Section 4(b) hereof,
delivered to the Purchaser or any such assignee, transferee or designee. With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File in compliance with the Pooling and Servicing Agreement, except for
such documents that (A) have been delivered (1) to the Purchaser or any
assignee, transferee or designee of the Purchaser or (2) for recording to the
appropriate public recording office and have not yet been returned or (B) are
not required to be delivered to the Purchaser or any assignee, transferee or
designee of the Purchaser until 90 days following the Closing Date or such later
date as provided in Section 4;

                           (ix) The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any relevant jurisdiction, except any as may have been complied with;

                           (x) The Seller (A) is a solvent entity and is paying
its debts as they become due and (B) after giving effect to the transfer of the
Mortgage Loans, will be a solvent entity and will have sufficient resources to
pay its debts as they become due;

<PAGE>

                                       -8-

                           (xi) The form of endorsement of each Mortgage Note
satisfied the requirement, if any, of endorsement in order to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note; and each Assignment to be delivered
hereunder is in recordable form and is sufficient to effect the assignment of
and to transfer to the assignee thereunder the benefits of the assignor, as
mortgagee or assignee thereof, under each Mortgage to which that Assignment
relates;

                           (xii) The transfer of the Mortgage Loans to the
Purchaser at the Closing Date will be treated by the Seller for financial
accounting and reporting purposes as a sale of assets;

                           (xiii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller had good title to, and
was the sole owner of, the Mortgage Loans, and such sale validly transfers the
Mortgage Loans to the Purchaser free and clear of any pledge, lien, encumbrance
or security interest;

                           (xiv) With respect to the Mortgage Loans, the Seller
hereby represents and warrants, as of the date hereof and as of the Closing
Date, that each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

                           (xv) The transfer of the Mortgage Loans by the Seller
was intended to be a sale and to be reported as such under United States
generally accepted accounting principles ("GAAP") and for United States federal
income tax purposes, and meets all of the requirements for such accounting and
tax treatment (except for the GAAP requirement that the Mortgage Loans have been
legally isolated from the Seller);

                           (xvi) In connection with the sale of the Mortgage
Loans by the Seller, the Seller (i) was solvent at all relevant times prior
thereto and has not been rendered insolvent thereby, (ii) after giving effect
thereto, is able to pay its debts as they mature, (iii) has not been left with
unreasonably small capital for the business in which it is engaged and proposes
to be engaged, (iv) had and has no intention of commencing any bankruptcy,
insolvency or similar proceeding, (v) did not and does not have any intent to
hinder, delay or defraud any of the undersigned's creditors, (vi) had a valid
business reason therefor and (vii) received new value and consideration therefor
constituting reasonably equivalent value and adequate and fair consideration;
and

                           (xvii) The Seller has not acquired, and does not
intend to acquire at any time, any direct or indirect ownership or other
economic interest in, or other right or obligation with respect to, any Mortgage
Loan or Certificate, except as described in the Agreements.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser
that, as to each Mortgage Loan, as of the Closing Date (or such other date
specified herein) for such Mortgage Loan:

<PAGE>

                                       -9-

                  (i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;

                  (ii) To the best knowledge of the Seller, the Mortgage Loans
are in compliance with all requirements set forth on Exhibit 1, and the
characteristics of the Mortgage Loans as set forth on Exhibit 1 are true and
correct;

                  (iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Closing Date, with respect to
such Mortgage Loan under the terms of the Mortgage Note have been made and with
respect to any Mortgage Loan whose Due Date is any day other than the first day
of the month, the January payment on such Mortgage Loan has been received; and
(b) the Originator has not advanced funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any amount
required by the Mortgage Note or Mortgage;

                  (iv) To the best knowledge of the Seller, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;

                  (v) To the best knowledge of the Seller, the terms of the
Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments included in the Mortgage
File, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage; the substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage Loan Schedule.
No instrument of waiver, alteration or modification has been executed by the
Seller or any other person in the chain of title from the Seller, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the title insurer, to the extent required by
the policy, and the terms of which are reflected in the Mortgage Loan Schedule
and included in the related Mortgage File;

                  (vi) Prior to the transfer to the Purchaser by the Seller, the
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;

                  (vii) To the best knowledge of the Seller, all buildings upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of the Pooling and Servicing
Agreement. All such insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination

<PAGE>

                                      -10-

of the Mortgage Loan, the Mortgaged Property was in an area identified on a
Flood Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect which
policy conforms to the requirements of Fannie Mae and Freddie Mac. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;

                  (viii) To the best knowledge of the Seller, any and all
requirements of any federal, state or local law including, without limitation,
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
origination and servicing of the Mortgage Loan have been complied with;

                  (ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;

                  (x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the appraised
value of the Mortgaged Property and (c) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and,
as of the time it contributed the Mortgage Loan to the Purchaser, the Seller had
full right to contribute and assign the same to the Purchaser;

                  (xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with respect to any Mortgage Note
marked "Renewal and Extension," such Mortgage Note is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms;

                  (xii) To the best knowledge of the Seller, all parties to the
Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed by such
parties. The Mortgagor is a natural person who is a party to the Mortgage Note
and the Mortgage is in an individual capacity or family trust that is guaranteed
by a natural person;

<PAGE>

                                      -11-

                  (xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage
Note or Mortgage;

                  (xiv) As of the Closing Date and prior to the sale of the
Mortgage Loan to the Purchaser, the Seller was the sole legal, beneficial and
equitable owner of the Mortgage Note and the Mortgage and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest;

                  (xv) To the best knowledge of the Seller, all parties which
have had any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and disposed
of such interest, were) in compliance with any and all applicable "doing
business" and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;

                  (xvi) The Mortgage Loan is covered by either (i) an ALTA
lender's title insurance policy acceptable to Fannie Mae or Freddie Mac, issued
by a title insurer acceptable to Fannie Mae and Freddie Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (x)(a) and (b) above) the Seller, its
successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan or (ii) an attorney's title
opinion, if customary in the related jurisdiction where the Mortgaged Property
is located. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;

                  (xvii) Other than as specified in paragraph (iii) above, there
is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration;

                  (xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;

<PAGE>

                                      -12-

                  (xix) All improvements which were considered in determining
the appraised value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;

                  (xx) The Mortgage Loan was (i) originated by the Seller or by
a savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD or (ii)
acquired by the Seller directly through loan brokers or correspondents such that
(a) the Mortgage Loan was originated in conformity with the Seller's
underwriting guidelines, (b) the Seller approved the Mortgage Loan prior to
funding and (c) the Seller provided the funds used to originate the Mortgage
Loan and acquired the Mortgage Loan on the date of origination thereof;

                  (xxi) Except with respect to approximately 4.57% of the Group
I-A Mortgage Loans, approximately 5.03% of the Group I-B Mortgage Loans,
approximately 1.40% of the Group II-A Mortgage Loans and approximately 2.14% of
the Group II-B Mortgage Loans, in each case by aggregate principal balance of
the related Sub-Group as of the Cut-off Date, which were construction permanent
loans at origination, principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. The Mortgage Note is payable
on the day of each month set forth in the Mortgage Loan Schedule and in Monthly
Payments which will amortize the Stated Principal Balance of the Mortgage Loan
over its remaining term at the Mortgage Rate. Interest on the Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Mortgage Note does not permit negative amortization;

                  (xxii) The origination and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all respects
legal, proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Master Servicer (directly
or through a subservicer) and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow Payments,
if any, all such payments are in the possession of, or under the control of, the
Master Servicer and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the Master Servicer
have been capitalized under any Mortgage or the related Mortgage Note;

                  (xxiii) To the best knowledge of the Seller, the Mortgaged
Property is free of damage and waste and there is no proceeding pending for the
total or partial condemnation thereof;

                  (xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale and (b)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the

<PAGE>

                                      -13-

Mortgage. The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940;

                  (xxv) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;

                  (xxvi) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, approved by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac or those approved by the institution that originated
the related Mortgage Loan;

                  (xxvii) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;

                  (xxviii) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loans are not graduated payment mortgage loans and the
Mortgage Loans do not have shared appreciation or other contingent interest
features;

                  (xxix) If the Mortgage Loan is a Refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required by
applicable law with respect to the making of a Refinanced Mortgage Loan, and
evidence of such receipt is and will remain in the Mortgage File;

                  (xxx) Except with respect to approximately 4.57% of the Group
I-A Mortgage Loans, approximately 5.03% of the Group I-B Mortgage Loans,
approximately 1.40% of the Group II-A Mortgage Loans and approximately 2.14% of
the Group II-B Mortgage Loans, in each case by aggregate principal balance of
the related Sub-Group as of the Cut-off Date, which were originated as
construction permanent loans and which have since converted to permanent
financing on the related Mortgaged Property, no Mortgage Loan was made in
connection with (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged Property;

                  (xxxi) The Mortgage Note, the Mortgage, the Assignment and any
other documents required to be delivered with respect to each Mortgage Loan
pursuant to the Pooling and Servicing

<PAGE>

                                      -14-

Agreement, have been delivered to the Trustee all in compliance with the
specific requirements of the Pooling and Servicing Agreement;

                  (xxxii) To the best knowledge of the Seller, the Mortgaged
Property is lawfully occupied under applicable law; all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities;

                  (xxxiii) The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (xxxiv) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;

                  (xxxv) [Reserved];

                  (xxxvi) The Mortgage Loan was not intentionally selected by
the Seller in a manner intended to adversely affect the interest of the
Purchaser;

                  (xxxvii) The Seller has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement;

                  (xxxviii) The Mortgaged Property consists of a parcel of real
property with a single family residence erected thereon, or a two to four-family
dwelling, or an individual condominium unit in a low-rise or high-rise
condominium project, or an individual unit in a planned unit development. The
Mortgaged Property is improved with a Residential Dwelling. To the best
knowledge of the Seller, the Mortgaged Property does NOT consist of any of the
following property types: (a) co-operative units, (b) mobile homes and (c)
manufactured homes (as defined in the Fannie Mae Originator-Servicer's Guide),
except when the appraisal indicates that the home is of comparable construction
to a stick or beam construction home, is readily marketable, has been
permanently affixed to the site and is not in a mobile home "park." The
Mortgaged Property is a fee simple estate. The Mortgaged Property is either a
fee simple estate or a long-term residential lease. If the Mortgage Loan is
secured by a long-term residential lease, unless otherwise specifically
disclosed in the Mortgage Loan Schedule, (A) the terms of such lease expressly
permit the mortgaging of the leasehold estate, the assignment of the lease
without the lessor's consent (or the lessor's consent has been obtained and such
consent is the Mortgage File) and the acquisition by the holder of the Mortgage
of the rights of the lessee upon foreclosure or assignment in lieu of

<PAGE>

                                      -15-

foreclosure or provide the holder of the Mortgage with substantially similar
protection; (B) the terms of such lease do not (x) allow the termination thereof
upon the lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default or (y) prohibit
the holder of the Mortgage from being insured under the hazard insurance policy
relating to the Mortgaged Property; (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate earlier than
ten years after the maturity date of the Mortgage Note; and (E) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates for
residential properties is an accepted practice;

                  (xxxix) At the time of origination, the Loan-to-Value Ratio of
any Group I-A, or I-B Mortgage Loan was not greater than 96.07% or 94.85%,
respectively, and the Loan-to-Value Ratio of any Group II-A or II-B Mortgage
Loan was not greater than 102.73% or 102.02%, respectively;

                  (xl) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee, at the option of the Mortgagee;

                  (xlii) To the best of the Seller's knowledge, each Mortgage
Loan with a Loan-to- Value Ratio at origination in excess of 80% will be insured
by a primary mortgage insurance policy (a "Primary Insurance Policy") covering
(a) at least 25% of the Scheduled Principal Balance of the Mortgage Loan at
origination if the Loan-to-Value Ratio is between 90.01% and 95.00%, (b) at
least 12% of the principal balance if the Loan-to-Value Ratio is between 85.01%
and 90.00% and (c) at least 6% of the principal balance if the Loan-to-Value
Ratio is between 80.01% and 85.00% and each Primary Insurance Policy insures the
named insured and its successors and assigns, and the issuer of the Primary
Insurance Policy is an insurance company whose claims-paying ability is
currently acceptable to the Rating Agencies;

                  (xliii) To the best knowledge of the Seller, no error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;

                  (xliv) With respect to any assumption, modification,
consolidation or extension agreements, such agreement has been recorded by the
Seller if required under applicable law; and

                  (xlv) The Seller has delivered (A) the power of attorney
pursuant to which Union Planters PMAC, Inc. is authorized to act on behalf of
Jefferson Heritage Bank and such power of attorney, along with the documents
delivered pursuant to Section 4(b) hereof, conveys to the Purchaser the right to
foreclose the Mortgage or (B) each certificate, certified by an officer of the
Seller, or other evidence of merger or change of name, signed or stamped by the
applicable regulatory authority, if any of the Mortgage Loans were acquired by
the Seller by merger or acquired or originated by the Seller while conducting
business under a name other than its present name and

<PAGE>

                                      -16-

such certificate or other evidence is not recorded in the public recording
office where the related Mortgage is required to be recorded.

                  (xlvi) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan
is in violation of any state law or ordinance similar to HOEPA.

                  (xlvii) The Master Servicer for each Mortgage Loan has
accurately and fully reported its borrower credit files to each of the Credit
Repositories in a timely manner.

                  (xlviii) No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the origination of,
or as a condition to closing, such Mortgage Loan.

                  (xlix)   No Mortgage Loan has a prepayment charge term.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of Mortgage
Pass-Through Certificates evidencing an interest in all or a portion of the
Mortgage Loans. With respect to the representations and warranties contained
herein which are made to the knowledge or the best of knowledge of the Seller,
or as to which the Seller has no knowledge, if it is discovered that the
substance of any such representation and warranty was inaccurate as of the date
such representation and warranty was made or deemed to be made, and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interest therein of the Purchaser or the Purchaser's assignee,
transferee or designee, then notwithstanding the lack of knowledge by the Seller
with respect to the substance of such representation and warranty being
inaccurate at the time the representation and warranty was made, the Seller
shall take such action described in the following paragraph in respect of such
Mortgage Loan.

                  Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller as part of any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan, the Purchaser or the Purchaser's assignee,
transferee or designee or the party discovering the breach shall give prompt
written notice to the Seller. Within ninety (90) days of its discovery or its
receipt of notice of any such missing documentation which was not transferred to
the Purchaser as described above or materially defective documentation or any
breach of a represen tation and warranty, the Seller promptly shall deliver such
missing document or cure such defect or

<PAGE>

                                      -17-

breach in all material respects, or in the event the Seller cannot deliver such
missing document or such defect or breach cannot be cured, the Seller shall
within ninety (90) days of its discovery or receipt of notice, either (i)
repurchase the affected Mortgage Loan at the Purchase Price or (ii) pursuant to
the provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans. With respect to Mortgage Loans where the Mortgage
File is missing a material document that was transferred from the Seller to the
Purchaser or upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of a breach of any of the
representations and warranties contained in Section 5(xi), (xiii) and (xiv) that
materially and adversely affects the value of any Mortgage Loan, the Purchaser
or the Purchaser's assignee, transferee or designee, the party discovering such
breach shall give prompt written notice to the Seller. The Seller shall amend
the Closing Schedule to reflect the withdrawal of such Mortgage Loan from the
terms of this Agreement and the Pooling and Servicing Agreement and the
addition, if any, of a Qualified Substitute Mortgage Loan. The Seller shall
deliver to the Purchaser such amended Closing Schedule and shall deliver such
other documents as are required by this Agreement or the Pooling and Servicing
Agreement within five (5) days of any such amendment. Any repurchase pursuant to
this Section 7(a) shall be accomplished by deposit in the Collection Account of
the amount of the Purchase Price in accordance with Section 2.03 of the Pooling
and Servicing Agreement. Any repurchase or substitution required by this Section
shall be made in a manner consistent with Section 2.03 of the Pooling and
Servicing Agreement.

                  Furthermore, the Seller will repurchase, in accordance with
the terms set forth in the previous paragraph, any Group II Mortgage Loan that
converts to a fixed-rate mortgage loan.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, repurchase or substitute for a
defective Mortgage Loan constitute the sole remedies of the Purchaser against
the Seller, respecting a missing or defective document or a breach of the rep
resentations and warranties contained in Section 5 or Section 6. It is
understood and agreed that the obligations of the Seller set forth in this
Section 7 to repurchase or substitute for a Mortgage Loan as to which a material
document is missing constitute the sole remedies of the Purchaser against the
Seller respecting a missing document.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller under this Agreement shall be true and correct
                           in all material respects as of the date as of which
                           they are made and no event shall have occurred which,
                           with notice or the passage of time, would constitute
                           a default under this Agreement;

<PAGE>

                                      -18-

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Purchase Price and the Union Planters Certificates.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                           (a)      An Officers' Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and Salomon Smith Barney Inc. (the
                                    "Underwriter") may rely, in a form
                                    acceptable to the Purchaser;

                           (b)      An Secretary's Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in a
                                    form acceptable to the Purchaser, and
                                    attached thereto copies of the certificate
                                    of incorporation, by-laws and certificate of
                                    good standing of the Seller;

                           (c)      An Officers' Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in a
                                    form acceptable to the Purchaser, with
                                    respect to certain facts regarding the sale
                                    of the Mortgage Loans by the Seller to the
                                    Purchaser;

                           (d)      An Opinion of Counsel of the Seller, dated
                                    the Closing Date and addressed to the
                                    Purchaser and the Underwriter, in a form
                                    acceptable to the Purchaser;

                           (e)      Such opinions of counsel as the Rating
                                    Agencies or the Trustee may request in
                                    connection with the sale of the Mortgage
                                    Loans by the

<PAGE>

                                      -19-

                                    Seller to the Purchaser or the Seller's
                                    execution and delivery of, or performance
                                    under, this Agreement;

                            (f)     A letter from Deloitte & Touche L.L.P.,
                                    certified public accountants, dated the date
                                    hereof and to the effect that they have
                                    performed certain specified procedures as a
                                    result of which they determined that certain
                                    information of an accounting, financial or
                                    statistical nature set forth in the
                                    Purchaser's Prospectus Supplement, dated
                                    March 26, 2001 under the subheadings
                                    "Summary of Prospectus Supplement--The
                                    Mortgage Loans," "Risk Factors" (to the
                                    extent of information regarding the Mortgage
                                    Loans therein) "The Mortgage Pool" and "The
                                    Mortgage Loan Seller" agrees with the
                                    records of the Seller;

                            (g)     A letter from PricewaterhouseCoopers,
                                    L.L.P., certified public accountants, dated
                                    the date hereof and to the effect that they
                                    have performed certain specified procedures
                                    as a result of which they determined that
                                    certain information of an accounting,
                                    financial or statistical nature set forth in
                                    the Purchaser's Prospectus Supplement, dated
                                    March 26, 2001 under the subheading "Pooling
                                    and Servicing Agreement--The Master
                                    Servicer" agrees with the records of the
                                    Master Servicer; and

                           (h)      Such further information, certificates,
                                    opinions and documents as the Purchaser or
                                    the Underwriter may reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all necessary and reasonable costs and expenses incurred
directly in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, recording fees, fees for title policy endorsements
and continuations and the fees for recording Assignments, the costs and expenses
of printing (or otherwise reproducing) and delivering this Agreement, the
Pooling and Servicing Agreement, the Certificates, the prospectus, Prospectus
Supplement, and private placement memorandum relating to the Certificates and
other related documents, the initial fees, costs and expenses of the Trustee set
forth in an engagement letter delivered to the Seller by the Trustee, the fees
and expenses of the Depositor's counsel in connection with the preparation of
all documents relating to the securitization of the Mortgage Loans, the filing
fee charged by the Securities and Exchange Commission for registration of the
Certificates, the fees charged by any rating agency to rate the Certificates and
the ongoing expenses of the Rating Agencies. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. [Reserved].

<PAGE>

                                      -20-

                  SECTION 12. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price and
delivered or caused to be delivered the Union Planters Certificates, or any such
condition shall not have been waived or satisfied and the Purchaser determines
not to pay or cause to be paid the Purchase Price and not to deliver or cause to
deliver the Union Planters Certificates, the Purchaser shall immediately effect
the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred
and the security interest created by this Section 12 shall be deemed to have
been released.

                  SECTION 13. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 390 Greenwich Street, New York,
New York 10013, Attention: Mortgage Finance Group, or such other address as may
hereafter be furnished to the Seller in writing by the Purchaser; if to the
Seller, addressed to the Seller at 215 Forrest Street, Hattiesburg, Mississippi
39401-3476, Attention: Morgan McCarty or to such other address as the Seller may
designate in writing to the Purchaser.

                  SECTION 14. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating

<PAGE>

                                      -21-

the remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 15. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agree ment and the
Pooling and Servicing Agreement.

                  SECTION 16. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 17. INDEMNIFICATION. (a) The Seller will indemnify and
hold harmless each of (i) the Purchaser and (ii) each person, if any, who
controls the Purchaser within the meaning of the Securities Act of 1933, as
amended (the "1933 Act") (i) through (iii) collectively, the "Indemnified
Party"), against any losses, claims, damages or liabilities to which such
Indemnified Party may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (a) any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement dated
August 28, 2000 (the "Prospectus Supplement"), as amended or supplemented,
relating to the public offering of the Certificates, representing interests in
the Mortgage Loans, or in any other offering document (the "Private Placement
Memorandum") relating to the offering by the Purchaser or an affiliate thereof,
of the Subordinate Certificates, the Class IO Certificates or the Class PO
Certificates or in any revision or amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading in each case to the
extent and only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission relates to information furnished by
the Seller specifically for use in the Prospectus Supplement, under the captions
"Summary of Prospectus Supplement--The Mortgage Loans," "Risk Factors," "The
Mortgage Pool," "Pooling and Servicing Agreement--The Master Servicer" and "The
Mortgage Loan Seller" (and substantially identical information approved by the
Seller for inclusion in the Private Placement Memorandum relating to the Union
Planters Certificates), (b) any representation, warranty or covenant made by the
Seller in this Agreement and (c) any updated collateral information provided by
the Underwriter to a purchaser of the certificates derived from the data
provided by the Seller or in the Remittance Report or a current collateral tape
obtained from the Seller or an affiliate of the Seller, including the current
loan balances of the Mortgage Loans to the extent such information was
inaccurate ((a) through (c) collectively, the "Seller Information") and

<PAGE>

                                      -22-

will reimburse each such Indemnified Party for any legal or other expenses
reasonably incurred by such Indemnified Party and each such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action. The Seller's liability under this Section 17 shall be in
addition to any other liability the Seller may otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller, its officers and its directors, and each person who controls the Seller
within the meaning of the 1933 Act against any and all losses, claims, damages
or liabilities, joint or several, to which they may become subject under the
1933 Act, or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based in whole or in part upon any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus Supplement, the Prospectus or Private Placement Memorandum, or in any
revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, as of
the date thereof and as of the Closing Date, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made therein in reliance upon and in
conformity with the Seller Information and will reimburse the Seller and each
such controlling person for any legal or other expenses reasonably incurred by
the Seller and each such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. The Purchaser's
liability under this Section 17 shall be in addition to any other liability the
Purchaser may otherwise have.

                  (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 17(a) or 17(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by the Purchaser, in the case of
parties indemnified pursuant to clause 17(a) and by the Seller, in the case of
parties indemnified pursuant to clause 17(b). The indemnifying party may, at its
option, at any time upon written notice to the indemnified party, assume the
defense of any proceeding and may designate counsel satisfactory to the
indemnified party in connection therewith provided that the counsel so
designated would have

<PAGE>

                                      -23-

no actual or potential conflict of interest in connection with such
representation. Unless it shall assume the defense of any proceeding, the
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. If the indemnifying party assumes the defense of
any proceeding, it shall be entitled to settle such proceeding with the consent
of the indemnified party or, if such settlement provides for release of the
indemnified party in connection with all matters relating to the proceeding
which have been asserted against the indemnified party in such proceeding by the
other parties to such settlement, without the consent of the indemnified party.

                  (d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

                  (e) The Purchaser and the Seller agree that it would not be
just and equitable if contribution pursuant to Section 17 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the considerations referred to in Section 17(d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in this Section 17 shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, except where the
indemnified party is required to bear such expenses pursuant to this Section 17,
which expenses the indemnifying party shall pay as and when incurred, at the
request of the indemnified party, to the extent that the indemnifying party will
be ultimately obligated to pay such expenses. In the event that any expenses so
paid by the indemnifying party are subsequently determined to not be required to
be borne by the indemnifying party hereunder, the party which received such
payment shall promptly refund the amount so paid to the party which made such
payment. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

                  (f) The indemnity and contribution agreements contained in
this Section 17 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Purchaser or any person controlling the Purchaser or by or on behalf

<PAGE>

                                      -24-

of the Seller and their respective directors or officers or any person
controlling the Seller and (iii) acceptance of and payment for any of the
Certificates.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the con version, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law.

<PAGE>

                                      -25-

Any assignment of the interest of the Purchaser pursuant to Section 4(d) hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

<PAGE>

                                      -26-

                  IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                         SALOMON BROTHERS MORTGAGE
                                         SECURITIES VII, INC.

                                         By:/s/ Matthew R. Bollo
                                            ----------------------------
                                         Name:  Matthew R. Bollo
                                         Title: Assistant Vice President

                                         UNION PLANTERS BANK, NATIONAL
                                         ASSOCIATION

                                         By:/s/ Morgan McCarty
                                            ---------------------------
                                         Name:  Morgan McCarty
                                         Title: Vice President

<PAGE>

                                                                       EXHIBIT 1

                  Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:

                  All percentages set forth herein are based upon the aggregate
unpaid principal balances of the Mortgage Loans as of the Cut-off Date.

         (1)      No Mortgage Loan in any Sub-Group had an amortized
                  Loan-to-Value Ratio in excess of 102.65%;

         (2)      No more than 4.67% of the Group I-A Mortgage Loans, 7.86% of
                  the Group I-B Mortgage Loans, 3.50% of the Group II-A Mortgage
                  Loans and 8.14% of the Group II-B Mortgage Loans, in each
                  case, by aggregate principal balance of the related Sub- Group
                  as of the Cut-off Date, are related to Mortgaged Properties
                  located in any one zip code area;

         (3)      Each Mortgaged Property is located in one of the states listed
                  in the charts entitled "Geographic Distribution of the
                  Mortgaged Properties relating to the Group I Mortgage Loans"
                  and "Geographic Distribution of the Mortgaged Properties
                  relating to the Group II Mortgage Loans" in the Prospectus
                  Supplement;

         (4)      No more than 2.69% of the Group I-A Mortgage Loans, 3.10% of
                  the Group I-B Mortgage Loans, 9.54% of the Group II-A Mortgage
                  Loans and 4.65% of the Group II-B Mortgage Loans, in each
                  case, by aggregate principal balance of the related Sub- Group
                  as of the Cut-off Date, are secured by condominium units;

         (5)      No more than 0.72% of the Group I-A Mortgage Loans, 0.00% of
                  the Group I-B Mortgage Loans, 1.42% of the Group II-A Mortgage
                  Loans and 0.96% of the Group II-B Mortgage Loans, in each
                  case, by aggregate principal balance of the related Sub- Group
                  as of the Cut-off Date, are secured by Town Houses;

         (6)      No Group I-A Mortgage Loan or Group I-B Mortgage Loan had a
                  principal balance in excess of $267,845 or $416,847,
                  respectively, at origination and no Group II-A Mortgage Loan
                  or Group II-B Mortgage Loan had a principal balance in excess
                  of $270,609 or $966,680, respectively, at origination;

         (7)      Each Group I-A Mortgage Loan was originated between April 1973
                  and December 2000, each Group I-B Mortgage Loan was originated
                  between July 1977 and July 2000, each Group II-A Mortgage Loan
                  was originated between December 1979 and December 2000 and
                  each Group II-B Mortgage Loan was originated between October
                  1992 and January 2001;

         (8)      On the basis of representations made by the Mortgagors in
                  their loan applications, no more than 3.78% of the Group I-A
                  Mortgage Loans, 1.90% of the Group I-B Mortgage Loans, 9.62%
                  of the Group II-A Mortgage Loans and 3.94% of the Group II-B
                  Mortgage Loans, in each case, by aggregate principal balance
                  of the related Sub- Group as of the Cut-off Date, are secured
                  by non-owner occupied homes and at least 95.82% of the Group
                  I-A Mortgage Loans, 98.10% of the Group I-B Mortgage Loans,
                  88.22% of the Group II-A Mortgage Loans and 93.13% of the
                  Group II-B

<PAGE>

                                       -2-

                  Mortgage Loans, in each case, by aggregate principal balance
                  of the related Sub- Group as of the Cut-off Date, are
                  owner-occupied Mortgaged Properties;

         (9)      The Mortgage Rates borne by the Group I-A Mortgage Loans and
                  the Group I-B Mortgage Loans as of the Cut-off Date ranged
                  from 6.000% per annum to 9.875% per annum and 6.500% per annum
                  to 14.500% per annum, respectively, and the weighted average
                  Mortgage Rate for the Group I-A Mortgage Loans and the Group
                  I-B Mortgage Loans as of the Cut-off Date was 7.468% per annum
                  and 8.312% per annum, respectively, and the Mortgage Rates
                  borne by the Group II-A Mortgage Loans and the Group II-B
                  Mortgage Loans as of the Cut-off Date ranged from 5.750% per
                  annum to 11.875% per annum and 5.875% per annum to 9.125% per
                  annum, respectively, and the weighted average Mortgage Rate
                  for the Group II-A Mortgage Loans and the Group II-B Mortgage
                  Loans as of the Cut-off Date was 7.698% per annum and 7.473%
                  per annum, respectively; and

         (10)     As of the Cut-off Date, approximately 30.27% and 16.68% of the
                  Group I-A Mortgage Loans and Group I-B Mortgage Loans,
                  respectively, and approximately 16.25% and 15.87% of the Group
                  II-A Mortgage Loans and Group II-B Mortgage Loans,
                  respectively, were rate/term refinancings, approximately
                  11.95% and 20.58% of the Group I-A Mortgage Loans and Group
                  I-B Mortgage Loans, respectively, and approximately 6.40% and
                  21.27% of the Group II-A Mortgage Loans and Group II-B
                  Mortgage Loans, respectively, were cash out refinancings and
                  approximately 57.79% and 62.74% of the Group I-A Mortgage
                  Loans and Group I-B Mortgage Loans, respectively, and
                  approximately 67.35% and 62.86% of the Group II-A Mortgage
                  Loans and Group II-B Mortgage Loans, respectively, were made
                  to purchase the related Mortgaged Properties (in each case, by
                  aggregate principal balance of the related Loan Group as of
                  the Cut-off Date).

<PAGE>

                                    EXHIBIT E
                                    ---------

                               REQUEST FOR RELEASE

To:  Wells Fargo Bank Minnesota, N.A.
     1015 10th Avenue S.E.
     Minneapolis, MN  55414-0031
     Attn:   Inventory Control

             Re:  Pooling and Servicing Agreement dated as of March 1,
                  2001, among Salomon Brothers Mortgage Securities
                  VII, Inc., as Depositor, Union Planters PMAC, Inc.,
                  as Master Servicer, and Wells Fargo Bank Minnesota,
                  National Association, as Trustee
                  ----------------------------------------------------

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

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______       1.   Mortgage Paid in Full

_______       2.   Foreclosure

_______       3.   Substitution

_______       4.   Other Liquidation (Repurchases, etc.)

_______       5.   Nonliquidation
Reason:____________________________________

Address to which Trustee should
Deliver the Custodian's Mortgage File:   ______________________________________
                                         ______________________________________
                                         ______________________________________

                                         By:___________________________________
                                                      (authorized signer)

                                       E-1

<PAGE>

Issuer:____________________________________
                                 Address:   ___________________________________
                                            ___________________________________

Date:______________________________________
Trustee

Wells Fargo Bank Minnesota, N.A.

Please acknowledge the execution of the above request by your signature and date
below:

______________________________________                 _________________________
Signature                                                       Date

Documents returned to Trustee:

______________________________________                 _________________________
Trustee                                          Date

                                       E-2

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                 [Date]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

               Re:  Salomon Brothers Mortgage Securities VII, Inc., Union
                    Planters Mortgage Pass-Through Certificates, Series
                    2001-UP1, Class ___, representing a ___% Class ___
                    Percentage Interest
                    ------------------------------------------------------

Ladies and Gentlemen:

          In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

          Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
March 1, 2001, among Salomon Brothers Mortgage Securities VII, Inc. as
Depositor, Union Planters PMAC, Inc. as Master Servicer and Wells Fargo Bank
Minnesota, National Association as Trustee (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.

                                      F-1-1

<PAGE>

          Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                          Very truly yours,

                                          [Transferor]

                                          By:______________________________
                                          Name:
                                          Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                    [Date]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

               Re:  Salomon Brothers Mortgage Securities VII, Inc., Mortgage
                    Pass-Through Certificates, Series 2001-UP1, Class ___,
                    representing a ___% Class ___ Percentage Interest
                    ---------------------------------------------------------

Ladies and Gentlemen:

          In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

          1. The Transferee is a "qualified institutional buyer" as that term is
     defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
     "1933 Act") and has completed either of the forms of certification to that
     effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
     the sale to it is being made in reliance on Rule 144A. The Transferee is
     acquiring the Certificates for its own account or for the account of a
     qualified institutional buyer, and understands that such Certificate may be
     resold, pledged or transferred only (i) to a person reasonably believed to
     be a qualified institutional buyer that purchases for its own account or
     for the account of a qualified institutional buyer to whom notice is given
     that the resale, pledge or transfer is being made in reliance on Rule 144A,
     or (ii) pursuant to another exemption from registration under the 1933 Act.

          2. The Transferee has been furnished with all information regarding
     (a) the Certificates and distributions thereon, (b) the nature, performance
     and servicing of the Mortgage Loans, (c) the Pooling and Servicing
     Agreement referred to below, and (d) any credit enhancement mechanism
     associated with the Certificates, that it has requested.

                                      F-1-3

<PAGE>

          All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of March 1, 2001, among Salomon Brothers Mortgage Securities VII, Inc.
as Depositor, Union Planters PMAC, Inc. as Master Servicer and Wells Fargo Bank
Minnesota, National Association as Trustee, pursuant to which the Certificates
were issued.

                                      [TRANSFEREE]

                                      By:______________________________
                                      Name:
                                      Title:

                                      F-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

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

          [For Transferees Other Than Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Wells Fargo Bank Minnesota, National Association, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.

   ___    CORPORATION, ETC. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or any organization described in
          Section 501(c)(3) of the Internal Revenue Code of 1986.

   ___    BANK. The Transferee (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

   ___    SAVINGS AND LOAN. The Transferee (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least

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

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

                                      F-1-5

<PAGE>

          $25,000,000 as demonstrated in its latest annual financial statements,
          a copy of which is attached hereto.

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

   ___    INSURANCE COMPANY. The Transferee is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

   ___    STATE OR LOCAL PLAN. The Transferee is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

   ___    ERISA PLAN. The Transferee is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

   ___    INVESTMENT ADVISOR. The Transferee is an investment advisor registered
          under the Investment Advisers Act of 1940.

          3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

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

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

         ___    ___  Will the Transferee be purchasing the Certificates

                                      F-1-6

<PAGE>

         Yes    No   only for the Transferee's own account?

          6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

          7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.

Dated:

                                       _____________________________________
                                       Print Name of Transferee

                                       By:__________________________________
                                       Name:
                                       Title:

                                      F-1-7

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

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

           [For Transferees That Are Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Wells Fargo Bank Minnesota, National Association, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

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

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.

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

____      The Transferee is part of a Family of Investment Companies which owned
          in the aggregate $______________ in securities (other than the
          excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

          3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements,

                                      F-1-8

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

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

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

Dated:

                                      ______________________________________
                                      Print Name of Transferee or Advisor

                                      By:___________________________________
                                      Name:
                                      Title:

                                      IF AN ADVISER:

                                      ______________________________________
                                      Print Name of Transferee

                                      F-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

          The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

          1.  I am an executive officer of the Purchaser.

          2.  The Purchaser is a "qualified institutional buyer", as defined in
     Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.

          3.  As of the date specified below (which is not earlier than the last
     day of the Purchaser's most recent fiscal year), the amount of
     "securities", computed for purposes of Rule 144A, owned and invested on a
     discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser_______________________________________________________________

By:   (Signature)_______________________________________________________________

Name of Signatory_______________________________________________________________

Title___________________________________________________________________________

Date of this certificate________________________________________________________

Date of information provided in paragraph 3_____________________________________

                                     F-1-10

<PAGE>

                                   EXHIBIT F-2
                                   -----------

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

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

          ______________________________________ , being duly sworn, deposes,
represents and warrants

as follows:

          1. I am a ______________________ of __________________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Salomon Brothers Mortgage Securities VII,
Inc., Union Planters Mortgage Pass-Through Certificates, Series 2001-UP1, Class
R-1 and Class R-II (the "Class R Certificates"), on behalf of whom I make this
affidavit and agreement. Capitalized terms used but not defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement
pursuant to which the Class R Certificates were issued.

          2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 20__ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

          3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual

                                      F-2-1

<PAGE>

interest, unless no significant purpose of the transfer is to impede the
assessment or collection of tax.

          4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

          5. The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

          6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.

          7. The Owner's taxpayer identification number is ___________________.

          8. The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(d) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

          9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

          10. The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class R Certificates, and hereby represents to and for the benefit of the
person from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.

          11. The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.

          12. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                                      F-2-2

<PAGE>

          13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

          14. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it knows, or knows facts that should lead it to believe, that any such
representations are false.

          15. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".

          16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

                                      F-2-3

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.

                                         [OWNER]

                                         By:________________________________
                                         Name:
                                         Title:     [Vice] President

ATTEST:

By:_____________________________
Name:
Title:    [Assistant] Secretary

          Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200___.

                                                  ______________________________
                                                            Notary Public

                                                  County of __________________
                                                  State of ___________________

                                                  My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

          _______________________________, being duly sworn, deposes, represents
and warrants as follows:

1.    I am a ____________________ of __________________________ (the "Owner"), a
corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.

          2. The Owner is not transferring the Class R-I and the Class R-II (the
"Residual Certificates") to impede the assessment or collection of any tax.

          3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

          4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-2. The Owner does not know or believe that
any representation contained therein is false.

          5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.

          6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement

                                      F-2-5

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.

                                         [OWNER]

                                         By:___________________________________
                                         Name:
                                         Title:         [Vice] President

ATTEST:

By:______________________________
Name:
Title:    [Assistant] Secretary

          Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200___.

                                         ________________________________
                                                   Notary Public

                                         County of ____________________
                                         State of _____________________

                                         My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G
                                    ---------

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                   _____________, 20__

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

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

               Re:  Salomon Brothers Mortgage Securities VII, Inc.
                    Union Planters Mortgage Pass-Through Certificates,
                    Series 2001-UP1, Class__
                    --------------------------------------------------

Dear Sirs:

          __________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Salomon Brothers Mortgage Securities VII, Inc.,
Union Planters Mortgage Pass- Through Certificates, Series 2001-UP1, Class ____
(the "Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of March 1, 2001 among Salomon
Brothers Mortgage Securities VII, Inc. as depositor (the "Depositor"), Union
Planters PMAC, Inc. as master servicer (in such capacity, the "Master Servicer")
and Wells Fargo Bank Minnesota, National Association as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1) or
(2) are accurate:

     _____ (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 entity that is deemed to be investing in plan assets within the meaning
     of the DOL regulation at 29 C.F.R. ss. 2510.3-101; or

                                       G-1

<PAGE>

     _____ (2) 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, will not subject the Depositor, the Trustee or
     the Master Servicer to any obligation in addition to those undertaken in
     the Pooling and Servicing Agreement and the transferee is an insurance
     company and (A) the source of funds used to purchase such Certificate is an
     "insurance company general account" (as such term is defined in PTCE
     95-60), (B) the conditions set forth in Section I and II of PTCE 95-60 have
     been satisfied (including the requirement that such Certificates are
     subject to an ERISA Qualifying Underwriting) and (C) there is no Plan with
     respect to which the amount of such general account's reserves and
     liabilities for contracts held by or on behalf of such Plan and all other
     Plans maintained by the same employer (or any "affiliate" thereof, as
     defined in PTCE 95-60) or by the same employee organization, exceeds 10% of
     the total of all reserves and liabilities of such general account (as
     determined under PTCE 95-60) as of the date of the acquisition of such
     Certificates.

                                          Very truly yours,
                                          __________________________________

                                          By:_______________________________
                                          Name:
                                          Title:

                                       G-2

<PAGE>

                                   Schedule 1
                                   ----------

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]

                                      S-1-1

<PAGE>

                                   Schedule 2
                                   ----------

        MORTGAGE LOAN SCHEDULE WITH RESPECT TO MORTGAGE LOANS WITH LOAN-
               TO-VALUE RATIOS IN EXCESS OF 80% THAT HAVE PRIMARY
                           MORTGAGE INSURANCE POLICES

                                [FILED BY PAPER]

                                      S-2-1

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