Document:

EXHIBIT 10.37

                      STOCK PURCHASE AGREEMENT

                           By and Between

                     Ridgedale Prints Plus, Inc.

                                And

                          TRU Retail, Inc.

                                     Dated as of April 24, 2001

               (PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)

<TABLE>
                          TABLE OF CONTENTS

<S>                                                   <C>
RECITALS ...........................................   1

AGREEMENT ..........................................   1

1.      DEFINITIONS ................................   1

2.      SALE AND TRANSFER OF SHARES; CLOSING .......   5
   2.1    Shares ...................................   5
   2.2    Purchase Price ...........................   5
   2.3    Closing ..................................   6
   2.4    Closing Obligations ......................   6
   2.5    Purchase Price Adjustment, Closing
           Estimate ................................   7
   2.6    Closing Balance Sheet; Purchase Price
           Adjustment ..............................   8

3.      REPRESENTATIONS AND WARRANTIES OF SELLER ...   8
   3.1    Organization of the Acquired Company
           Qualification ...........................   8
   3.2    Authority; No Violation or Consent .......   9
   3.3    Capitalization; Ownership of Common Stock.   9
   3.4    Financial Statements .....................  10
   3.5    ERISA; Benefit Plans .....................  10
   3.6    Disclosure ...............................  11

4.      REPRESENTATIONS AND WARRANTIES OF BUYER ....  12
   4.1    Organization and Good Standing ...........  12
   4.2    Authority; Execution and Delivery and
           Enforceability ..........................  12
   4.3    No Conflicts; Consent ....................  12
   4.4    Investment Intent ........................  12
   4.5    Certain Proceedings ......................  12
   4.6    Brokers or Finders .......................  12
   4.7    Disclosure ...............................  13

5.      COVENANTS OF SELLER ........................  13
   5.1    Access and Investigation .................  13
   5.2    Operation of the Business of the Acquired
           Company .................................  13
   5.3    No Dividends, Interest or Extraordinary
           Charges .................................  13
   5.4    Required Approvals .......................  13
   5.5    Notification .............................  14
   5.6    Best Efforts .............................  14
   5.7    Section 338(h)(10) Election and Allocation
           of Purchase Price .......................  14
</TABLE>

               (PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
<TABLE>
                          TABLE OF CONTENTS (continued)
<S>                                                   <C>
   5.8    Taxes ....................................  14
   5.9    Non-Competition ..........................  16
   5.10   Landlord Consents ........................  17
   5.11   Representation to Buyer's Lenders ........  17
   5.12   Transfer of Assets to Acquired Company ...  17
   5.13   Intercompany Accounts ....................  17
   5.14   Post-Closing Payments ....................  17

6.      COVENANTS OF BUYER .........................  17
   6.1    Approvals of Governmental Entities .......  17

                              i

   6.2    Commitment Letter ........................  17
   6.3    Best Efforts  ............................  18
   6.4    Landlord Consents ........................  18
   6.5    Accountants ..............................  18

7.      CONDITIONS PRECEDENT TO BUYER'S OBLIGATION
         TO CLOSE ..................................  18
   7.1    Accuracy of Representations ..............  18
   7.2    Seller's Performance .....................  18
   7.3    Consents .................................  18
   7.4    Additional Documents .....................  18
   7.5    No Injunction ............................  19
   7.6    Financing ................................  19
   7.7    Preferred Stock Designation ..............  19

8.      CONDITIONS PRECEDENT TO SELLER'S OBLIGATION
         TO CLOSE ..................................  19
   8.1    Accuracy of Representations ..............  19
   8.2    Buyer's Performance ......................  19
   8.3    Consents .................................  19
   8.4    Additional Documents .....................  19
   8.5    No Injunction ............................  19
   8.6    CPI Corp. Board Approval .................  20
   8.7    Preferred Stock Designation ..............  20
   8.8    Lender ...................................  20

9.      TERMINATION ................................  20
   9.1    Termination Events .......................  20
   9.2    Effect of Termination ....................  20
   9.3    Termination Fees .........................  21

10.     INDEMNIFICATION REMEDIES .................... 21
   10.1   Survival; Right to Indemnification Not
           Affected by Knowledge .................... 21
   10.2   Indemnification and Payment of Damages by
           Seller ................................... 21
</TABLE>

               (PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
<TABLE>
                          TABLE OF CONTENTS (continued)
<S>                                                   <C>
   10.3   Indemnification and Payment of Damages by
           Buyer ...................................  22
   10.4   Time Limitations .........................  22
   10.5   Employee Matters .........................  22
   10.6   Procedure for Indemnification -
           Third-Party Claims ......................  24
   10.7   Procedure for Indemnification - Other
           Claims ..................................  25

11.  GENERAL PROVISIONS ............................  25
   11.1   Expenses .................................  25
   11.2   Public Announcements .....................  25
   11.3   Confidentiality ..........................  25
   11.4   CPI Corp. Guaranty .......................  26
   11.5   Notices ..................................  26
   11.6   Jurisdiction; Service of Process .........  26
   11.7   Further Assurances .......................  27
   11.8   Waiver ...................................  27
   11.9   Entire Agreement and Modification ........  27
   11.10  Assignment ...............................  27
   11.11  Severability .............................  27
   11.12  Section Headings; Construction ...........  27
   11.13  Time of Essence ..........................  28
   11.14  Governing Law ............................  28
   11.15  Counterparts .............................  28

</TABLE>
                              ii

                          SCHEDULES

Schedule 2.4(a)(iii) - Form of Employment Agreement
Schedule 2.4(a)(iv)  - Settlement and Satisfaction Agreement
Schedule 3.1  - Good Standing
Schedule 3.4  - Unaudited Balance Sheets
Schedule 3.5  - Employee Benefit Plans
Schedule 10.2 - Prints Plus, Inc. Litigation

                         EXHIBITS

Exhibit A - Limited Guaranty and Pledge Agreement
Exhibit B - Certificate of Designations of Preferred Stock of Buyer

                              iii

                   STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of
April 24, 2001, by Ridgedale Prints Plus, Inc., a Minnesota
corporation ("Seller"), and TRU Retail, Inc., a California
corporation ("Buyer"), and, solely to the extent specified herein,
CPI Corp., a Delaware corporation ("CPI").

                          RECITALS

     Seller is the owner of 100% of the issued and outstanding
shares of Prints Plus, Inc., a California corporation.  Prints
Plus, Inc. is sometimes referred to in this Agreement as the
"Acquired Company."  CPI is the owner of 100% of the issued and
outstanding shares of CPI Prints Plus, Inc., which is the owner of
100% of the issued and outstanding shares of the Seller.

     The Seller desires to sell, and the Buyer desires to purchase,
all of the issued and outstanding stock of Prints Plus, Inc. (the
"Shares") for the consideration and on the terms set forth in this
Agreement.

     The Seller and the Buyer have agreed, upon the terms and
subject to the conditions of this Agreement, to make a joint
election under Section 338(h)(10) of the Code (the "Section
338(h)(10) Election") to treat the transaction for federal income
tax purposes and state income tax purposes, if any applicable state
recognizes such an election as applicable to the Acquired
Company, as a purchase of the assets of the Acquired Company .

                          AGREEMENT

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

1.   DEFINITIONS.

For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:

"Acquired Company" -- as defined in the Recitals of this Agreement.

"Allocation Schedule" -- as defined in Section 5.7.

"Applicable Law" -- any statute, law, ordinance, rule or regulation
applicable to CPI, the Seller, the Buyer or the Acquired Company.

"Best Efforts" -- the efforts that a prudent Person desirous of
achieving a result would reasonably use in similar circumstances to
ensure that such result is achieved as expeditiously as possible;
provided, however, that an obligation to use Best Efforts under
this Agreement does not require the Person subject to that
obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement and
the Contemplated Transactions.

"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement will be deemed to have
occurred if there is or has been (a) any inaccuracy in or breach
of, or any failure to perform or comply with, such representation,
warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is
or was inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term "Breach" means
any such inaccuracy, breach, failure, claim, occurrence, or
circumstance.

"Buyer" -- as defined in the first paragraph of this Agreement.

"Buyer Retirement Plan" -- as defined in Section 10.5(d).

"Closing" -- as defined in Section 2.3.

"Closing Balance Sheet" -- as defined in Section 2.6.

"Closing Estimate" -- as defined in Section 2.6.

"Closing Date" -- the date and time as of which the Closing
actually takes place.

"Code" -- the Internal Revenue Code of 1986, as amended.

"Consent" -- as defined in Section 3.2.

"Contemplated Transactions" -- all of the transactions contemplated
by this Agreement, including:

           (a)   the sale of the Shares by Seller to Buyer;

           (b)   the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement; and

           (c)   Buyer's acquisition and ownership of the Shares.
"Contract" -- any loan or credit agreement, note, bond, mortgage,
indenture, lease, sublease, purchase order or other agreement,
commitment or license.

"CPI"--as defined in the first paragraph of this Agreement.

"Damages" -- as defined in Section 10.2.

"ERISA" -- the Employee Retirement Income Security Act of 1974.

"ERISA Affiliates" -- as defined in Section 3.5(a).

                              2

"Governmental Entity" -- means any federal, state, local or foreign
government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign.

"Indemnified Person" -- as defined in Section 10.2.

"IRS" -- the United States Internal Revenue Service or any
successor agency.

"Knowledge" -- an individual will be deemed to have "Knowledge" of
a particular fact or other matter if such individual is actually
aware of such fact or other matter.  A Person (other than an
individual) will be deemed to have "Knowledge" of a particular fact
or other matter if any individual who is serving as a director or
officer of such Person has Knowledge of such fact or other matter.

"Lien" -- any pledge, lien (including, without limitation, any tax
lien), charge, claim, community property interest, condition,
equitable interest, encumbrance, security interest, mortgage,
option, restriction on transfer (including, without limitation, any
buy-sell agreement or right of first refusal or offer), forfeiture,
penalty, equity or other right of another Person of every nature
and description whatsoever.

"Limited Guaranty and Pledge Agreement" -- means the  Limited
Guaranty and Pledge Agreement executed by Upland  pledging Buyer's
stock as sole security for Buyer's performance of the Buyer's
obligation to redeem Preferred Stock  (with such guaranty limited
to the stock pledged and permitting no further recourse against
Upland), in the form attached as Exhibit A.

"Material Adverse Effect" -- a material adverse effect on the
business, financial condition or results of operation of the
Acquired Company.

"Order" -- any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by
any court, administrative agency, or other Governmental Entity or
by any arbitrator.

"Ordinary Course of Business" -- an action taken by a Person will
be deemed to have been taken in the "Ordinary Course of Business"
only if:

           (a)   such action is consistent with the past practices
of such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person;

           (b)   such action is not required to be authorized by
the board of directors of such Person (or by any Person or group of
Persons exercising similar authority) and is not required to be
specifically authorized by the parent company (if any) of such
Person; and

           (c)   such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board
of directors (or by any Person or group of Persons exercising
similar authority), in the ordinary course of the normal day-to-day
consolidated operations of other Persons that are in the same line
of business as such Person.

                              3

"Permitted Liens" -- (i) those Liens securing any liabilities on
the Acquired Company's balance sheet at the time of Closing
incurred in the Ordinary Course of Business, (ii) mechanics',
carriers', workmens', repairmens' or other like Liens arising or
incurred in the Ordinary Course of Business, Liens arising under
original purchase price conditional sales contracts and equipment
leases with third parties entered into in the Ordinary Course of
Business and liens for Taxes that are not due and payable or that
may thereafter be paid without penalty or that are being contested
in good faith by appropriate proceedings, (iii) other imperfections
of title or encumbrances, if any, that do not, individually or in
the aggregate, materially impair the continued use and operation of
the Acquired Company's assets in the conduct of their respective
businesses as presently conducted, (iv) easements, covenants,
rights-of-way and other similar restrictions of record, and (v) any
conditions that may be shown by a current, accurate survey or
physical inspection of any property made prior to Closing.

"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization,
labor union, or other entity or Governmental Entity.

"Proceeding" -- any action, arbitration, mediation, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any
Governmental Entity or arbitrator or mediator.

"Purchase Price" -- as defined in Section 2.2.

"Related Person" -- with respect to a particular Person, any other
Person who controls such Person, is controlled by such Person or is
under common control with such Person.

"Representative" -- with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel,
accountants, and financial advisors.

"Section 338(h)(10) Election" -- as defined in the Recitals of this
Agreement.

"Securities Act" -- the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that Act or any
successor law.

"Seller" -- as defined in the first paragraph of this Agreement.

"Seller Retirement Plan " -- as defined in Section 10.5(d).

"Shares" -- as defined in the Recitals of this Agreement.

"Straddle Period" -- as defined in Section 5.7(b).

                              4

"Store" -- means any of the 158 retail stores owned or operated by
the Acquired Company as of the date of this Agreement.

"Store Lease" -- means any lease pursuant to which the Acquired
Company has the right to occupy a Store.

"Tax Return" -- any return, report or similar statement required to
be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return,
claim for refund, amended return and declaration of estimated Tax.

"Tax" -- means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social
security, unemployment; disability, property, sales, use, transfer,
registration, value added, escheat or other tax of any kind,
including any interest, penalty or addition to tax.

"Tax Sharing Arrangement" -- shall mean any written or unwritten
agreement or arrangement for the allocation or payment of Tax
liabilities or payment for Tax benefits with respect to a
consolidated, combined or unitary Tax Return which Tax Return
includes the Acquired Company.

"Threatened" -- a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or
statement has been made (orally or in writing to a Person's
directors or officers) or any notice has been given (orally or in
writing to a Person's directors or officers), that such a claim,
Proceeding, dispute, action, or other matter is likely to be
asserted, commenced, taken, or otherwise pursued in the future.

"Upland" -- Theodore R. Upland III.

2.   SALE AND TRANSFER OF SHARES; CLOSING.

     2.1   SHARES.  Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell and transfer the Shares
to Buyer, and Buyer will purchase the Shares from Seller.

     2.2   PURCHASE PRICE.  The purchase price (the "Purchase
Price") for the Shares will be:

           (a)   $4,000,000, in cash, payable at closing by wire
transfer or other immediately available funds (as adjusted as set
forth in Sections 2.5 and 2.6); and

           (b)   Preferred Stock of Buyer  with an aggregate
liquidation and redemption value  of $12,011,000, having the rights
and terms specified in a Certificate of Designation satisfactory to
Buyer and Seller incorporating the terms specified in Exhibit B
with the redemption obligations of the Buyer under the terms of the
Preferred Stock secured  pursuant to the Limited Guaranty and
Pledge Agreement, subject, however, to approval of all such terms,
conditions and obligations by all applicable Governmental Entities.

                              5

     2.3   CLOSING.  The purchase and sale (the "Closing") provided
for in this Agreement will take place at the offices of Seller's
counsel at 100 North Broadway, Suite 1300, St. Louis, Missouri, at
10:00 a.m. (local time) on June 15, 2001, or at such other time and
place as the parties may agree.

     2.4   CLOSING OBLIGATIONS.  At the Closing:

           (a)   Seller will deliver or cause to be delivered to
Buyer:

                 (i)  certificates representing the Shares, duly
     endorsed (or accompanied by duly executed stock powers) for
     transfer to Buyer; and

                 (ii)  a certificate executed by Seller
     representing and warranting to Buyer that each of Seller's
     representations and warranties in this Agreement was
     accurate in all material respects as of the date of this
     Agreement and is accurate in all material respects as of the
     Closing Date as if made on the Closing Date; and

                 (iii) a duly executed Employment Agreement
     between Buyer and Upland in the form  attached hereto as
     Schedule 2.4(a)(iii), and approved by Seller; and

                 (iv)  a duly executed settlement and satisfaction
     agreement between CPI Prints Plus, Inc. and Upland
     terminating Upland's Employment Agreement with CPI Prints
     Plus, Inc., dated as of September 30, 1997, as amended by the
     First Amendment to Employment Agreement dated as of May 31,
     1998, together with a payment to Upland in the amount of Two
     Hundred Thirteen Thousand Eighty-six Dollars ($213,086.00)
     from CPI Prints Plus, Inc. to Upland to satisfy and
     discharge the fully vested SERP obligation to Upland in the
     form attached hereto as Schedule 2.4(a) (iv); and

                 (v)  a duly executed Limited Guaranty and Pledge
     Agreement between Upland and Seller.

           (b)   Buyer will deliver or cause to be delivered to
Seller:

                 (i)   the cash portion of the Purchase Price;

                 (ii)  the shares of the Preferred Stock described
     above;

                 (iii) the Limited Guaranty and Pledge Agreement
     executed by  Upland and the Seller;

                 (iv)  a certificate executed by Buyer to the
     effect that each of Buyer's representations and warranties
     in this Agreement was accurate in all material respects as
     of the date of this Agreement and is accurate in all
     material respects as of the Closing Date as if made on the
     Closing Date;

                              6

                 (v)   a duly executed Employment Agreement between
     Buyer and Upland in the form attached hereto as Schedule
     2.4(a)(iii), and approved by Seller; and

                 (vi)  a duly executed settlement and satisfaction
     agreement between CPI Prints Plus, Inc. and  Upland
     terminating  Upland's Employment Agreement with CPI Prints
     Plus, Inc., dated as of September 30, 1997, as amended by
     the First Amendment to Employment Agreement dated as of
     May 31, 1998, together with a payment to Upland in the
     amount of Two Hundred Thirteen Thousand Eighty-six Dollars
     ($213,086.00) from CPI Prints Plus, Inc. to Upland to
     satisfy and discharge the fully vested SERP obligation
     to Upland in the form attached hereto as Schedule 2.4(a) (iv).

     2.5   PURCHASE PRICE ADJUSTMENT, CLOSING ESTIMATE.  The cash
portion of the Purchase Price shall be:

           (a)   reduced by:

                 (i)   the net decrease, if any, from February 3,
     2001 to the close of business on the second day prior to the
     Closing Date of any intercompany loan from Seller or any
     Related Person to the Acquired Company;

                 (ii)  $172,380 to offset the satisfaction of
     Upland's SERP as of the Closing Date;

                 (iii) $3,565 (representing CPI Corp.'s entire
     obligation for contribution to its 401(k) Plan for the period

     from January 1, 2001 through February 3, 2001);

                 (iv)  an amount equal to $175,000;

                 (v)   an amount equal to forty percent (40%) of
     the estimated tax loss realized by CPI Corp. as the result
     of the operation of the Acquired Company, the Seller and CPI
     Prints Plus, Inc., after February 3, 2001 and prior to the
     Closing, if any; and

           (b)   increased by:

                 (i)   the net increase, if any, from February 3,
     2001 to the close of business on the second day prior to the
     Closing Date of any intercompany loan from Seller or any
     Related Person to the Acquired Company; and

                 (ii)  an amount equal to forty percent (40%) of
     the estimated taxable income realized by CPI Corp. as the
     result of the operation of the Acquired Company, the Seller
     and CPI Prints Plus, Inc., after February 3, 2001 and prior
     to the closing, if any.

At the option of the Buyer, in lieu of increasing or decreasing the
cash portion of the Purchase Price by the net amount under
subsections (a) and (b) above, the Buyer may elect to adjust the
aggregate liquidation and redemption value of the Preferred Stock
issued as a portion of the Purchase Price, as described in Section
2.6(c).  The cash portion, or the aggregate liquidation and

                              7

redemption value of the Preferred Stock portion, as the case may
be, of the Purchase Price shall be estimated by the parties at the
Closing, in good faith and consistent with past accounting
practices and procedures (the "Closing Estimate"), and finalized
after the Closing in accordance with Section 2.6.

     2.6   CLOSING BALANCE SHEET; PURCHASE PRICE ADJUSTMENT.

           (a)   Within ten (10) days following the Closing, the
Seller shall deliver to the Buyer a consolidated balance sheet of
the Acquired Company immediately prior to the Closing ("Closing
Balance Sheet").

           (b)   In the event of any disagreement among the parties
regarding the Closing Balance Sheet, the disagreement shall be
resolved by an independent certified public accountant selected by
agreement of Seller's and Buyer's respective certified public
accountants, with the costs of such third accountant borne equally
by Buyer and Seller.

           (c)   The final cash portion of the Purchase Price (or
the liquidation value of the Preferred Stock portion of the
Purchase Price) shall be based on the Closing Balance Sheet.  In
the event the Closing Estimate is less than the amount determined
by the Closing Balance Sheet, the Buyer will pay the difference to
the Seller (or, at the Buyer's option, issue additional shares
of Preferred Stock with an aggregate liquidation and redemption
value equal to such difference), and if the Closing Estimate is
more than the amount determined by the Closing Balance Sheet,
the Seller shall refund such difference to the Buyer (or, at the
Buyer's option, tender shares of Preferred Stock to the Buyer with
an aggregate liquidation and redemption value equal to such
difference).

3.   REPRESENTATIONS AND WARRANTIES OF SELLER.  Seller represents
and warrants to Buyer as follows:

     3.1   ORGANIZATION OF THE ACQUIRED COMPANY; QUALIFICATION.

           (a)   The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state
where organized, and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on
its business as now being conducted.

           (b)   The Acquired Company is a corporation duly
organized and validly existing and in good standing under the laws
of the state where organized, and has all requisite corporate
power and authority to own, lease and operate its properties and to
carry its business as now being conducted.  Except as set forth on
Schedule 3.1, the  Acquired Company is duly qualified or licensed
to do business as foreign corporations and/or entities and is in
good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where
the failure to be so qualified and in good standing will not have
a Material Adverse Effect.

                              8

     3.2   AUTHORITY; NO VIOLATION OR CONSENT.  The Seller has the
requisite corporate power and authority to enter into this
Agreement and to carry out the Contemplated Transactions and
all proceedings required to be taken by the Seller to authorize the
execution, delivery and performance of this Agreement have been
duly and properly taken.  This Agreement has been duly and validly
executed and delivered by the Seller, and this Agreement
constitutes a legal, valid and binding agreement of the Seller
enforceable in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affecting the enforcement of creditors'
rights generally and general equitable principles.  The
execution and delivery of this Agreement, the consummation of the
Contemplated Transactions and the compliance with the terms of this
Agreement do not and will not:

           (a)   conflict with or result in any Breach of any
provision of any agreement or other instrument to which the Seller
or the Acquired Company is a party or by which it or the
Acquired Company or any of its or the Acquired Company's property
may be bound (excluding, however, any real estate leases), or
conflict with or result in any Breach of any provision of the
Seller's or the Acquired Company's Certificate of Incorporation or
Bylaws;

           (b)   result in the creation of any Lien upon, or any
Person obtaining the right to acquire, any of the Shares or any of
the Acquired Company's assets;

           (c)   violate or conflict with any law, ordinance, code,
rule, regulation, decree, Order or ruling of any court or
Governmental Entity, to which the Seller or the Acquired
Company or any of their respective assets are subject, except such
violation as would not  have a Material Adverse Effect;

           (d)   require any authorization, consent, Order, permit
or approval of, or notice to, or filing, registration or
qualification with ("Consent"), any governmental, administrative or
judicial authority; or

           (e)   except for Consents required by the Store Leases,
the corporate office lease or the warehouse leases, require any
Consent of any Person to the execution, delivery or performance of
this Agreement or to the consummation of the Contemplated
Transactions.

     3.3   CAPITALIZATION; OWNERSHIP OF COMMON STOCK.

           (a)   The authorized capital stock of the Acquired
Company consists of 60,000 shares of common stock, no par value, of
which 50,000 shares are validly issued and outstanding, fully paid
and nonassessable and comprise the Shares to be sold to Buyer.  The
Seller is the lawful owner, of record and beneficially, of the
Shares and has good title to Shares, free and clear of any and all
Liens.

           (b)   There are no outstanding options, warrants,
rights, calls, agreements, convertible securities or other
commitments or rights to purchase or acquire any unissued stock
or other securities from the Acquired Company, and no other
securities of the Acquired Company are reserved for any purpose.

                              9

     3.4   Financial Statements.  The unaudited balance sheets of
the Acquired Company, the Seller and CPI Prints Plus, Inc. as of
February 3, 2001, attached hereto as Schedule 3.4, have been
prepared in accordance with the books and records of such companies
and present fairly in all material respects the financial position
of such companies for the fiscal year then ended.

     3.5   ERISA; BENEFIT PLANS.

           (a)   The Acquired Company and its ERISA Affiliates have
satisfied the minimum funding requirements of Section 302 of ERISA,
and Section 412 of the Code. For purposes of this Agreement, "ERISA
Affiliate" means each business or entity which is a member of a
"controlled group of corporations" under "common control" or an
"affiliated service group" with the Acquired Company within the
meaning of Section 414(b) or (c).  Except to the extent that any
Breach of the representations set forth in this Section 3.5,
individually or in the aggregate, would not  have a Material
Adverse Effect, with respect to each "employee benefit
plan" (as defined in Section 3(3) of ERISA) listed in Schedule 3.5:

                 (i)   the Acquired Company and each of its ERISA
Affiliates have performed all obligations required to be performed
by them under each such employee benefit plan and neither the
Acquired Company nor any of its ERISA Affiliates is in default
under or in violation of the terms of any such employee benefit
plan;

                 (ii)  each such employee benefit plan was
established and has been maintained in compliance in all material
respects with the applicable provisions of ERISA, the Code and any
other Applicable Law;

                 (iii) no "prohibited transaction" as defined in
Section 406 of ERISA and Section 4979 of the Code has occurred in
respect of any such plan;

                 (iv)  no civil or criminal action brought pursuant
to Part 5 of Subtitle B of Title I of ERISA is pending or, to the
Knowledge of the Seller, Threatened against any fiduciary of any
such plan;

                 (v)   no action or failure to act and no
transaction or holding of any asset by, or with respect to, any
such employee benefit plan has or may reasonably be expected to
subject the Acquired Company or any of its ERISA Affiliates or any
fiduciary, to any Tax, penalty or other liability, whether by way
of indemnity or otherwise;

                 (vi)  to the Knowledge of Seller, there are no
Proceedings pending or Threatened (other than routine claims for
benefits) against the Acquired Company or any of its ERISA
Affiliates, or to the Knowledge of the Seller, pending or
Threatened against any administrator, trustee or other fiduciary of
any such employee benefit plan with respect to any such employee
benefit plan, or against any such plan or against the assets of any
such plan;

                 (vii) the Acquired Company and its ERISA
Affiliates have made all payments with respect to all periods
through December 31, 2000, and will make a pro-rata payment for the
period from January 1, 2001 through February 3, 2001 by the
reduction of the

                              10

Purchase Price, in each case which are due and required by each
employee benefit plan, each related trust, each collective
bargaining agreement or by law to be made to, or with respect to
each such employee benefit plan (including all insurance premiums
or intercompany charges with respect to each such employee benefit
plan);

                 (viii) all group health plans covering employees
of the Acquired Company have been operated in compliance with the
continuation coverage requirements of Section 4980B of the Code
(and any predecessor provisions) and Part 6 of Title I of ERISA;
and

                 (ix)  to the Knowledge of the Seller, no employee
benefit plan listed in Schedule 3.5 is under audit or investigation
by the IRS, the Department of Labor or the Pension Benefit Guaranty
Corporation, and no such audit or investigation has been
threatened.  Neither the execution and delivery of this Agreement
nor the consummation of the Contemplated Transactions will directly
or indirectly result in any payment made or to be made on behalf of
any Person which constitutes a "parachute payment" within the
meaning of Section 280G of the Code.  The Acquired Company has no
liabilities with respect to any employee benefit plan except
those listed on Schedule 3.5 which is now sponsored, maintained,
contributed to, or required to be contributed to by the Acquired
Company or any of its ERISA Affiliates.

     The Acquired Company has had no obligation to contribute to
any "multiemployer plan" as defined in Section 3(37) of ERISA or
any "multiple employer plan" as defined in ERISA or the Code.  The
Acquired Company has not incurred any material liability under
Title IV of ERISA (excluding liability for required premium
payments) to the Pension Benefit Guaranty Corporation  in
connection with any employee pension benefit plan which is subject
to Title IV of ERISA.

           (b)   Schedule 3.5 contains a complete list of all
deferred compensation, severance, pension, profit-sharing, stock
option and retirement plans, and all material bonus and other
employee benefit or fringe benefit plans maintained or with respect
to which contributions are made by the Acquired Company.  Accurate
and complete copies of all such plans have been provided to the
Buyer.  Neither the Acquired Company nor any of its ERISA
Affiliates has any plan or commitment, whether legally binding or
not, to establish any new employee benefit plan, to enter into any
employee agreement or to modify or to terminate any employee
benefit plan or employee agreement (except to the extent required
by law or to conform any such plan or agreement to the requirements
of any Applicable Law or as required by this Agreement), nor has
any intention to do any of the foregoing been communicated to
employees.

           (c)   Except as set forth on Schedule 3.5, the Acquired
Company does not maintain or contribute to any employee benefit
plan which provides, or has any liability to provide, life
insurance or medical benefits to any employee upon his retirement
or termination of employment, except as may be required by Section
4980B of the Code.

     3.6   DISCLOSURE.  No representation or warranty of Seller in
this Agreement omits to state a material fact necessary to make the
statements herein, in light of the circumstances in which they were
made, not misleading.

                              11

4.   REPRESENTATIONS AND WARRANTIES OF BUYER. The Buyer represents
and warrants to Seller as follows:

     4.1   ORGANIZATION AND GOOD STANDING.  The Buyer is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of California, and has full
corporate power and authority to carry on its business as presently
conducted and as contemplated after the Closing.

     4.2   AUTHORITY; EXECUTION AND DELIVERY AND ENFORCEABILITY.
The Buyer has the requisite power and authority to enter into this
Agreement and to carry out the Contemplated Transactions and all
Proceedings required to be taken by it to authorize the execution,
delivery and performance of this Agreement have been duly and
properly taken.  This Agreement has been duly and validly executed
and delivered by the Buyer, and this Agreement constitutes a valid
and binding agreement of the Buyer, enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and
general equitable principles.

     4.3   NO CONFLICTS; CONSENT.  The execution and delivery by
the Buyer of this Agreement does not and the consummation of the
Contemplated Transactions will not conflict with, or result in any
violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or a loss of a
material benefit under, or result in the creation of any Lien upon
any of the properties or assets of the Buyer under any provision of
(a) its Articles or Certificate of Incorporation or Bylaws, (b) any
Contract to which the Buyer is a party or by which any of its
properties or assets is bound, or (c) any judgment applicable to
the Buyer or its properties or assets or Applicable Law.  No
Consent of any Governmental Entity is required to be obtained or
made by or with respect to the Buyer in connection with the
execution, delivery and performance of this Agreement or the
consummation of the Contemplated Transactions.

     4.4   INVESTMENT INTENT.  The Buyer acknowledges that the
Shares have not been registered under the Securities Act and that
the Shares may not be resold absent such registration or unless an
exception is available.  The Buyer is acquiring the Shares for its
own account, for investment purposes only and not with a view
toward distribution thereof.  The Buyer qualifies as an "accredited
investor" as such term is defined in Rule 501(a) promulgated
pursuant to the Securities Act.

     4.5   CERTAIN PROCEEDINGS.  There is no pending or Threatened
Proceeding that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.

     4.6   BROKERS OR FINDERS.  Neither the Buyer nor its officers
or agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or
other similar payment in connection with this Agreement and will
indemnify and hold Seller and its Related Persons harmless from any
such payment alleged to be due by or through Buyer or any of its
Related Persons as a result of the action of Buyer or any of its
Related Persons or their officers or agents.

                              12

     4.7   DISCLOSURE.  No representation or warranty of Buyer in
this Agreement omits to state a material fact necessary to make the
statements herein, in light of the circumstances in which they were
made, not misleading.

5.   COVENANTS OF SELLER.

     5.1   ACCESS AND INVESTIGATION.  Between the date of this
Agreement and the Closing Date, Seller will, and will cause the
Acquired Company and its Representatives to, (a) afford
Buyer and its Representatives and prospective lenders and their
Representatives (collectively, "Buyer's Advisors") full and free
access to the Acquired Company's personnel, properties, Contracts,
books and records, and other documents and data, (b) furnish Buyer
and Buyer's Advisors with copies of all such Contracts, books and
records, and other existing documents and data as Buyer may
reasonably request, and (c) furnish Buyer and Buyer's Advisors with
such additional financial, operating, and other data and
information as Buyer may reasonably request.

     5.2   OPERATION OF THE BUSINESS OF THE ACQUIRED COMPANY.
Between the date of this Agreement and the Closing Date, Seller
will, and will cause the Acquired Company to:

           (a)   conduct the business of the Acquired Company only
in the Ordinary Course of Business;

           (b)   use its Best Efforts to preserve intact the
current business organization of the Acquired Company, keep
available the services of the current officers, employees, and
agents of the Acquired Company, and maintain the relations and good
will with suppliers, customers, landlords, creditors, employees,
agents, and others having business relationships with the
Acquired Company;

           (c)   continue to fund the business of the Acquired
Company, including capital expenditures, in accordance with past
practice and in accordance with the 2001 budget prepared for the
Acquired Company; and

           (d)   maintain on behalf of the Acquired Company, or
cause the Acquired Company to maintain, general liability,
property, casualty, automobile and workers' compensation
insurance at the levels in effect on February 3, 2001.

     5.3   NO DIVIDENDS, INTEREST OR EXTRAORDINARY CHARGES.  The
Acquired Company will not pay any dividend or make other stock
distributions and the Seller will not charge the Acquired
Company for interest or other expenses except insurance and
collection of bad debts.

     5.4   REQUIRED APPROVALS.  Between the date of this Agreement
and the Closing Date, Seller will, and will cause the Acquired
Company to, cooperate with Buyer (a) with respect to all filings
that Buyer elects to make or is required by legal requirements to
make in connection with the Contemplated Transactions, and (b) in
obtaining all necessary Consents.

                              13

     5.5   NOTIFICATION.  Between the date of this Agreement and
the Closing Date, Seller will promptly notify Buyer in writing if
Seller or the Acquired Company becomes aware of any fact or
condition that causes or constitutes a Breach of the of Seller's
representations and warranties as of the date of this Agreement, or
if Seller or the Acquired Company becomes aware of the
occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or
condition. During the same period, Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of
Seller in this Section 5 or of the occurrence of any event that may
make the satisfaction of the conditions in Section 7
impossible or unlikely.

     5.6   BEST EFFORTS.  Between the date of this Agreement and
the Closing Date, Seller will use its Best Efforts to cause the
conditions in Sections 7 and 8 to be satisfied.

     5.7   SECTION 338(h)(10) ELECTION AD ALLOCATION OF PURCHASE
PRICE.  Seller shall join with the Buyer in making the Section
338(h)(10) Election (and any corresponding elections under
any applicable state, local or foreign laws, to the extent
available) with respect to the purchase and sale of the Shares.
On or before May 7, 2001, the Buyer shall deliver to the Seller a
proposed form of IRS Form 8023 (or other applicable form),
including any required schedules, and any similar forms required
by any state, local or foreign taxing authority.  The Seller and
the Buyer shall in good faith use commercially reasonable efforts
to agree promptly on such forms and the allocation of the "ADSP,"
as defined in Treasury Regulation Section 1.338-4T, among
the assets of the Seller (the "Allocation Schedule"), and shall
agree on such forms and the allocation of the "ADSP" on or before
May 31, 2001.  Buyer shall have the right to review and approve
before filing all elections, returns and other documents to be
filed in connection with the Section 338(h)(10) Election.

     5.8   TAXES.

           (a)   Seller shall prepare and file with the appropriate
taxing authorities all Tax Returns for the Acquired Company for all
periods that end on or prior to the Closing Date, and shall remit
to the taxing authorities all Taxes due with respect to such Tax
Returns.  If the due date for such Tax Returns is after the Closing
Date, Buyer shall cause the Acquired Company to execute and
maintain in force a power of attorney authorizing Seller's
designated representatives to sign and file such Tax Returns and
take such other actions as are contemplated by Section 5.8(c) with
respect to such Tax Returns.  Buyer shall prepare and file with the
appropriate taxing authorities all Tax Returns for the Acquired
Company for all periods that begin after the Closing Date, and
shall remit to the taxing authorities all Taxes due with respect to
such Tax Returns.

           (b)   Any Taxes (other than sales or use taxes) with
respect to the property or operations of the Acquired Company that
relate to a period that begins prior to and ends after the
Closing Date (a "Straddle Period ") shall be apportioned between
the Seller and the Buyer as determined from the books and records
of the Acquired Company during the portion of such period ending on
the Closing Date and the portion of such period beginning on the
day following the Closing Date, and based on accounting methods,
elections and conventions that do not have the effect of distorting
income or expenses as follows:  (i) in the case of Taxes other than

                              14

withholding  and employment Taxes, on a per diem basis, and (ii) in
the case of withholding and employment Taxes, as determined from
the books and records of the Acquired Company as though the taxable
period of the Acquired Company terminated at the close of business
on the Closing Date.  Buyer shall prepare all Tax Returns for
Straddle Periods and shall provide Seller and its designated
representatives with the opportunity to review and comment on such
Tax Returns at least ten (10) days prior to filing.  In the event
that Seller objects to the filing of any such Tax Return, Buyer
shall not file such Tax Return without the written consent of
Seller.  Prior to the due date Seller shall remit to Buyer the
amount of any Tax owed upon the filing of a Tax Return for a
Straddle Period that is properly apportionable to Seller.

           (c)   The Seller and its duly appointed representatives
shall have the exclusive authority to control any audit or
examination by any taxing authority and contest, resolve and
defend against any assessment for additional Taxes, notice of tax
deficiency or other adjustment of Taxes of or relating to any
liability of the Acquired Company for Taxes for any tax period
ending on and including the Closing Date (including, with respect
to any Straddle Period, the portion of such period ending on and
including the Closing Date) except to the extent that such
dispute relates to sales or use tax for which Seller has no
obligation to indemnify Buyer.

           (d)   The Buyer shall have the exclusive authority to
control any audit or examination by any taxing authority and
contest, resolve and defend against any assessment for
additional Taxes, notice of Tax deficiency or other adjustment of
Taxes of or relating to any liability of the Acquired Company's
Taxes for all periods beginning after the Closing Date;
provided, however, that (i) neither the Buyer nor any Related
Person of Buyer (including the Acquired Company) nor their duly
appointed representatives shall, without the prior written
consent of the Seller, enter into any settlement of any contest or
otherwise compromise any issue that affects or may affect the Tax
liability of the Seller, the Acquired Company or any of their
Related Persons for any period prior to the Closing Date
(including, with respect to any Straddle Period, the portion of
such period that ends on and includes the Closing Date), and (ii)
neither the Buyer nor any Related Persons of Buyer (including the
Acquired Company) nor its duly appointed representatives shall,
without the prior consent of the Seller, enter into any settlement
of any contest or otherwise compromise any issue that would require
payment by the Seller of any amount under this Agreement unless the
Buyer shall have waived or caused to be waived for itself and the
Acquired Company and their Related Persons any right to
indemnification for any such amounts from the Seller.

           (e)   The Seller shall be entitled to all refunds
(including, without limitation, interest with respect thereto) of
Taxes received by or on behalf of the Acquired Company relating
to any period ending on or prior to the Closing Date (including,
with respect to any Straddle Period, the portion of such period
that ends on and includes the Closing Date).  The Buyer shall
pay, or cause to be paid, to the Seller any and all refunds
promptly upon receipt thereof by Buyer, the Acquired Company or
their Related Persons.

           (f)   Buyer agrees to indemnify Seller for any
additional Tax owed by Seller (including Tax owed by Seller due
to this indemnification payment) resulting from any transaction
(other than the deemed asset sale pursuant to the Section
338(h)(10) Election) not in

                              15

the Ordinary Course of Business occurring on the Closing Date after
Buyer's purchase of the Shares.

           (g)   Buyer and Seller agree to report all transactions
(other than the deemed asset sale pursuant to the Section
338(h)(10) Election) not in the Ordinary Course of Business
occurring on the Closing Date after Buyer's purchase of the Shares
on Buyer's federal income tax return to the extent permitted by
Treasury Regulation Paragraph 1.1502-76(b)(1)(B).

           (h)   Buyer and the Acquired Company and Seller shall
cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns
pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes.  Such cooperation shall include
the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
The Acquired Company and Seller agree to retain all books and
records with respect to Tax matters pertinent to the Acquired
Company relating to any taxable period beginning before the Closing
Date until the expiration of the statute of limitations (and, to
the extent notified by Buyer or Seller, any extensions thereof)
of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority.
Neither the Seller nor the Buyer and the Acquired Company (nor any
of their Related Persons) shall destroy or dispose of or allow the
destruction or disposition of any books, records or files relating
to the business, properties, assets or operations of the Acquired
Company to the extent they pertain to the operations of the
Acquired Company on or prior to the Closing Date without first
having offered in writing to deliver such books, records and files
to the Seller.

           (i)   If the Seller makes any indemnification payment
under Section 5.8(j) and such payment gives rise to a United States
federal, state, local or foreign Tax benefit to the Buyer
or any of its Related Persons (including any of the Acquired
Company), then promptly following the filing of the tax returns(s)
reflecting such Tax benefit, the Buyer shall pay to the Seller the
amount of such Tax benefit.  The determination of any such Tax
benefit shall be made in good faith by the Buyer and, if requested
by the Seller, such determination shall be verified in writing
by an independent certified public accounting firm reasonably
acceptable to both the Seller and the Buyer (the fees of which
shall be equally borne by the Buyer and the Seller).

           (j)   Seller's obligation to pay or to indemnify Buyer
or the Acquired Company for Taxes incurred by or on behalf of the
Acquired Company shall be limited to the following:  (i) Taxes
(other than sales or use taxes) relating to taxable periods ending
on or prior to the Closing Date, except for transactions subject to
section 5.8(f); (ii) any tax arising from purchases made prior to
January 1, 1998 in connection with the construction of new Stores;
(iii) sales or use tax, if any, arising from the stock purchase
contemplated by this Agreement; and (iv) Taxes (other than sales or
use taxes) relating to a Straddle Period to the extent apportioned
to Seller pursuant to section 5.8(b).

     5.9   NON-COMPETITION.  From and after the Closing, CPI Corp.
and Seller agree that, until the mandatory redemption date for such
Preferred Stock, without the prior written consent

                              16

of the Buyer, directly or by ownership of an interest in another
entity, neither CPI Corp. nor Seller nor any of their Related
Persons will compete with the Acquired Company in the business
conducted as of the Closing in any location where the Acquired
Company conducts business as of the date of the Closing.

     5.10  LANDLORD CONSENTS.  Seller will, and will cause the
Acquired Company to, use its Best Efforts to obtain any Consents to
the Contemplated Transactions required by Store Leases.

     5.11  REPRESENTATION TO BUYER'S LENDERS.  Seller will, upon
request of Buyer, represent to Buyer's lenders that the unaudited
balance sheets set forth on Schedule 3.4 present fairly in
all material respects the consolidated financial position of the
relevant companies for the fiscal year ended February 3, 2001.

     5.12  TRANSFER OF ASSETS TO ACQUIRED COMPANY.  Between the
date of this Agreement and the Closing Date, CPI Corp. and Seller
will cause to be transferred to Acquired Company all assets held
by them or any Related Person used in the business of the Acquired
Company, including all right title and interest, however held, in
the name "Prints Plus" and any derivation thereof, subject only to
Permitted Liens.

     5.13  INTERCOMPANY ACCOUNTS.  As of the close of business on
the day before the Closing Date, Seller and CPI Corp. will cause
(at no cost to Acquired Company) the elimination of all
intercompany accounts between the Acquired Company and the Seller
and any Related Persons, including but not limited to, intercompany
liabilities and accruals for 401(k) matches, workmen's
compensation, and general liability or automobile liability
insurance.

     5.14  POST-CLOSING PAYMENTS.  So long as the Preferred Stock
is outstanding, and Buyer has retained KPMG or another public
accounting firm at the request of the holder of the Preferred
Stock pursuant to Section 6.5, Seller shall reimburse the Buyer for
the amount by which the fees of KPMG (or such other designated
public accounting firm) exceed (a) $45,000, for the annual
audit of Buyer's financial statements, or (b) $28,000 for the audit
of an opening balance sheet of the Buyer effective immediately
after Closing.  Seller shall make each such payment to Buyer
within thirty (30) days after the date Seller receives Buyer's
invoice.

6.   COVENANTS OF BUYER.

     6.1   APPROVALS OF GOVERNMENTAL ENTITIES.  As promptly as
practicable after the date of this Agreement, Buyer will, and will
cause each of its Related Persons to, make all filings
required by Applicable Law to be made by them to consummate the
Contemplated Transactions.  Between the date of this Agreement and
the Closing Date, Buyer will, and will cause each Related Person
to, cooperate with Seller with respect to all filings that Seller
is required by Applicable Law to make in connection with the
Contemplated Transactions, and (ii) cooperate with Seller in
obtaining all required Consents.

     6.2   COMMITMENT LETTER.  Buyer will use its Best Efforts to
deliver to Seller, within 60 days after the date of this Agreement,

a true and correct copy of a commitment letter (the
"Commitment Letter") addressed to Buyer which provides for
sufficient funds available to

                              17

consummate the purchase of the Shares and pay the  cash portion of
the Purchase Price and to pay all fees and expenses related to and
contemplated by this Agreement at the Closing.

     6.3   BEST EFFORTS.  Between the date of this Agreement and
the Closing Date, the Buyer will use its Best Efforts to cause the
conditions in Sections 7 and 8 to be satisfied.

     6.4   LANDLORD CONSENTS.  Buyer will use its Best Efforts to
obtain any Consents to the Contemplated Transactions required by
Store Leases.

     6.5   ACCOUNTANTS.  So long as any shares of Preferred Stock
are outstanding, and the holder of the Preferred Stock so requests,
Buyer shall retain KPMG (or such other public accounting firm as
the holder of the Preferred Stock designates) as its certified
public accountants for audit work.

7.   CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.  Buyer's
obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Buyer, in whole or in
part):

     7.1   ACCURACY OF REPRESENTATIONS.  All of Seller's
representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in
all material respects as of the Closing Date as if made on the
Closing Date.

     7.2   SELLER'S PERFORMANCE.

           (a)   All of the covenants and obligations that CPI
Corp. or Seller is required to perform or to comply with pursuant
to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.

           (b)   Each document required to be delivered by Seller
or the Acquired Company pursuant to Section 2.4 must have been
delivered.

     7.3   CONSENTS.  All Consents identified in Section 3.2 (e)
must have been obtained and must be in full force and effect.

     7.4   ADDITIONAL DOCUMENTS.  Seller must deliver to Buyer such
documents as Buyer may reasonably request for the purpose of (i)
evidencing the accuracy of any of CPI Corp.'s or Seller's
representations and warranties, (ii) evidencing the performance by
Seller or CPI Corp. of, or the compliance by Seller or CPI Corp.
with, any covenant or obligation required to be performed or
complied with by such party, (iii) evidencing the satisfaction of
any condition referred to in this Section 7, or (iv) otherwise
facilitating the consummation or performance of any of the
Contemplated Transactions.

                              18

     7.5   NO INJUNCTION.  There must not be in effect or
Threatened  any Proceeding , any legal requirement or any
injunction or other Order that  prohibits the sale of the Shares by
Seller to Buyer.

     7.6   FINANCING.  Buyer shall have received financing in
accordance with the terms of the Commitment Letter described in
Section 6.2.

     7.7   PREFERRED STOCK DESIGNATION.  Buyer and Seller shall
have agreed upon the Designations of Preferred Stock, in accordance

with the terms set forth in Exhibit B, and the California Secretary
of State shall have approved such form of Designations.

8.   CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.
Seller's obligation to sell the Shares and to take the other
actions required to be taken by Seller at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Seller, in
whole or in part):

     8.1   ACCURACY OF REPRESENTATIONS.  All of the Buyer's
representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material
respects as of the date of this Agreement and must be accurate in
all material respects as of the Closing Date as if made on the
Closing Date.

     8.2   BUYER'S PERFORMANCE.

           (a)   All of the covenants and obligations that the
Buyer is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and
each of these covenants and obligations (considered individually),
must have been performed and complied with in all material
respects.

           (b)   The Buyer must have delivered each of the
documents required to be delivered by the Buyer pursuant to Section
2.4 and the Buyer must have made the cash payment and delivered the
securities required pursuant to Section 2.2.

     8.3   CONSENTS.  All Consents identified in Section 3.2(e)
must have been obtained and must be in full force and effect.

     8.4   ADDITIONAL DOCUMENTS.  The Buyer must have delivered to
Seller such documents as Seller may reasonably request for the
purpose of (i) evidencing the accuracy of any representation or
warranty of Buyer, (ii) evidencing the performance by Buyer of, or
the compliance by Buyer with, any covenant or obligation required
to be performed or complied with by Buyer, (iii) evidencing the
satisfaction of any condition referred to in this Section 8, or
(iv) otherwise facilitating the consummation of any of the
Contemplated Transactions.

     8.5   NO INJUNCTION.  There must not be in effect any legal
requirement or any injunction or other Order that (a) prohibits the
sale of the Shares by Seller to Buyer, and (b) has been
adopted or issued, or has otherwise become effective, since the
date of this Agreement.

                              19

     8.6   CPI CORP. BOARD APPROVAL.  The board of directors of CPI
Corp. shall have approved this Agreement and the Contemplated
Transactions.

     8.7   PREFERRED STOCK DESIGNATION.  Buyer shall have adopted
and have in effect Designations of Preferred Stock in accordance
with the terms set forth in Exhibit B, satisfactory to Seller.

     8.8   LENDER.  Seller shall have approved any provisions in
the documents required by Buyer's lender that relate to or could
affect the payment of dividends on the Preferred Stock, the
redemption of the Preferred Stock or other rights of the holders of
the Preferred Stock, such approval not to be unreasonably withheld.

9.   TERMINATION.

     9.1   TERMINATION EVENTS.  This Agreement may, by notice given
prior to or at the Closing, be terminated:

           (a)   by either Buyer or Seller if a material Breach of
any provision of this Agreement has been committed by the other
party and such Breach has not been waived;

           (b)   (i) by Buyer if any of the conditions in Section
7 have not been satisfied as of the Closing Date or if satisfaction
of such a condition is or becomes impossible (other than
through the failure of the Buyer to comply with its obligations
under this Agreement) and Buyer has not waived such condition on or
before the Closing Date; or (ii) by Seller if any of the
conditions in Section 8 have not been satisfied as of the Closing
Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Seller to comply with
its obligations under this Agreement) and Seller has not waived
such condition on or before the Closing Date;

           (c)   by mutual consent of Buyer and Seller;

           (d)   by either Buyer or Seller if the Closing has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its
obligations under this Agreement) on or before June 23, 2001, or
such later date as the parties may agree; or

           (e)   by Seller if the Buyer has not delivered a copy of
the Commitment Letter described in Section 6.2 on or before the
date specified in such Section.

     9.2   EFFECT OF TERMINATION.  Each party's right of
termination under Section 9.1 is in addition to any other rights it
may have under this Agreement or otherwise, and the exercise of
a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 9.1, all further
obligations of the parties under this Agreement will terminate,
except that the obligations in Sections 9.3, 10, 11.1, 11.3 and
11.4 will survive; provided, however, that if this Agreement is
terminated by a party because of the Breach of the Agreement
by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement

                              20

is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination
unimpaired.

     9.3   TERMINATION FEES.

(a)   If all conditions precedent to Seller's obligation
to close set forth in Section 8 have been met and Seller breaches
its obligation to complete the Contemplated Transactions,
Seller shall pay Buyer the sum of $500,000; and

(b)   If all the conditions precedent to Buyer's
obligation to close set forth in Section 7 have been met and Buyer
breaches its obligation to complete the Contemplated Transactions,
Buyer shall pay Seller the sum of $50,000;

provided, however, that neither party shall have any obligation to
pay termination fees pursuant to subsections 9.3 (a) or (b) in the
event of material impairment of the Acquired Company's projected
cash flow and neither party shall have an obligation to pay fees or
otherwise be liable for any Breach unless such breach remains
uncured for thirty days after its receipt of notice of an alleged
Breach.

10.  INDEMNIFICATION REMEDIES.

     10.1  SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE .  All representations, warranties, covenants, and
obligations in this Agreement will survive the Closing.
The right to indemnification, payment of Damages or other remedy
based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted,
whether before or after the execution and delivery of this
Agreement with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or
obligation.  The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the
right to indemnification, payment of Damages, or other remedy based
on such representations, warranties, covenants, and obligations.

     10.2  INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER.
Seller will indemnify and hold harmless the Buyer and its
Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim,
damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:

           (a)   any Breach of any representation or warranty made
by Seller in this Agreement;

           (b)   any Breach by Seller of any covenant or obligation
of Seller in this Agreement;

                              21

           (c)   any claims incurred by the Acquired Company prior
to the Closing that are covered under Seller's general liability,
automobile, workers' compensation, property or casualty insurance,
including any related deductible payments;

           (d)   any claims incurred by the Acquired Company (i)
prior to May 1, 2000, that are covered under Seller's medical
insurance policies, and (ii) prior to August 1, 2000, that are
covered under Seller's dental insurance policy;

           (e)   any litigation or other proceedings identified on
Schedule 10.2;

           (f)   except as limited by Section 5.8(j) or as set
forth in Section 10.2(c), any business conducted or other action or
omission to act by Seller, its Related Persons or Acquired
Company and related to the Acquired Company prior to February 3,
2001; or

           (g)   any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with
Seller or the Acquired Company (or any Person acting on their
behalf) in connection with any of the Contemplated Transactions.

The remedies provided in this Section 10.2 will not be exclusive of
or limit any other remedies that may be available to Buyer or the
other Indemnified Persons.

     10.3  INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER.  The
Buyer will indemnify and hold harmless Seller, and will pay to
Seller the amount of any Damages arising, directly or
indirectly, from or in connection with (a) any Breach of any
representation or warranty made by Buyer in this Agreement, (b) any
Breach by Buyer of any covenant or obligation of a Buyer in
this Agreement, (c) except as otherwise specifically provided in
this Article 10, any business conducted by the Acquired Company
after February 3, 2001, or (d) any claim by any Person for
brokerage or finder's fees or commissions or similar payments based
upon any agreement or understanding alleged to have been made by
such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.

     10.4  TIME LIMITATIONS.  If the Closing occurs, Seller will
have no liability (for indemnification or otherwise) with respect
to any representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, unless on
or before the expiration of the applicable statute of limitations,
Buyer notifies Seller of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Buyer.
If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before the
expiration of the applicable statute of limitations, Seller
notifies Buyer of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Seller.

     10.5  EMPLOYEE MATTERS.

                              22

           (a)   Without limiting the Buyer's obligations under
this Article 10, the Buyer hereby agrees to indemnify the Seller
and its Related Persons and to defend and hold the Seller
and its Related Persons harmless from and against any and all
losses incurred by the Seller or any of its Related Persons arising
out of or with respect to any employees of the Acquired Company
prior to the Closing, or such earlier date as specified in this
Article 10, including:

                 (i)   the provision of continuation coverage after
February 3, 2001, for employees of the Acquired Company and their
covered dependents under any group health plan on account of any
qualifying event which occurs at any time (the terms "continuation
coverage", "group health plan", and "qualifying event" shall have
the meanings ascribed to them in Section 4980B of the Code);

                 (ii)  termination by the Buyer or its Related
Persons, including the Acquired Company following the Closing Date,
of the employment of any employee of the Acquired Company;

                 (iii) failure of the Buyer or its Related Persons,
including the Acquired Company following the Closing Date, to
continue the employment of any employee of the Acquired Company on
terms at least equivalent to those such Acquired Company employees
presently enjoy;

                 (iv)  any claim made by any person who was an
employee of the Acquired Company as of February 3, 2001 for
severance pay or benefits; and

                 (v)   any suit or claim of violation of any
employment-related law brought against the Seller or any Related
Person of the Seller, based upon any action taken by the Buyer or
any of its Related Persons, including the Acquired Company,
following the Closing Date.

           (b)   Following the Closing Date, (i) the Buyer shall
ensure that no limitations or exclusions as to preexisting
conditions, proof of insurability or waiting periods not currently
applicable to employees of the Acquired Company become applicable
to any of them under any welfare benefit plans in which such
employees may be eligible to participate, and (ii) the Buyer
shall ensure that costs or expenses incurred by employees of the
Acquired Company (and their dependents) up to (and including) the
Closing Date shall be taken into account for purposes of
satisfying applicable deductible, co-payment, coinsurance, maximum
out-of-pocket provisions and like adjustments or limitations on
coverage under any such welfare benefit plans.

           (c)   From and after the Closing Date, Buyer and its
Related Persons shall, as applicable, honor, pay, perform and
satisfy any and all liabilities, obligations and responsibilities
to, or in respect of, each employee of the Acquired Company and
each former employee of the Acquired Company arising under the
terms of, or in connection with, any employee benefit, fringe
benefit, deferred compensation or incentive compensation or
vacation or other paid time off plan, policy or arrangement
maintained or contributed to by the Acquired Company, or in
which the Acquired Company participates, and any employment,
consulting, retention, severance or similar agreement to which
the Acquired Company is a party, in each case, in accordance with
the terms thereof in effect immediately from and after the Closing.

                              23

           (d)   Buyer shall use its Best Efforts, as soon as
practicable following the Closing Date, to establish or designate
a defined contribution plan that is intended to qualify under
Sections 401(a) and 401(k) of the Code (the "Buyer Retirement Plan
") in which employees of the Acquired Company shall be eligible to
participate.  Following such establishment or designation of the
Buyer Retirement Plan and receipt by the Seller of a copy of a
favorable determination letter from the Internal Revenue Service
regarding the qualified status of the Buyer Retirement Plan under
Section 401(a) of the Code, or such earlier time as the Buyer and
Seller may agree, the Seller shall cause the trust maintained under
the CPI Corp. Employees Profit Sharing Plan and Trust (the "Seller
Retirement Plan ") to transfer to the trust maintained under
the Buyer Retirement Plan the assets attributable to the account
balances under the Seller Retirement Plan of the employees of the
Acquired Company, in accordance with Applicable Law, which amounts
shall be credited to the respective accounts established for such
employees under the Buyer Retirement Plan; provided that amounts in
accounts under the Seller Retirement Plan of such employees that
are invested in loans to such employees shall be transferred in
kind.  Following such asset transfer, the Buyer Retirement Plan
shall assume all liability for the payment of the benefits
attributable to such transferred assets, and none of the Seller,
the Seller Retirement Plan or the trust thereunder shall have any
obligation or liability with respect to such benefits.

     10.6  PROCEDURE FOR INDEMNIFICATION -- THIRD-PARTY CLAIMS.

           (a)   Promptly after receipt by an indemnified party
under Section 10.2 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to
the indemnifying party of the commencement of such claim, but the
failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party
demonstrates that the defense of such action is prejudiced by the
indemnifying party's failure to give such notice.

           (b)   If any Proceeding referred to in Section 10.6(a)
is brought against an indemnified party and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying
party fails to provide reasonable assurance to the indemnified
party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to
the indemnified party and, after notice from the indemnifying party
to the indemnified party of its election to assume the defense of
such Proceeding, the indemnifying party will not, as long as
it diligently conducts such defense, be liable to the indemnified
party under this Section 10 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding,
in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the indemnifying party
assumes the defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified

                              24

party's consent unless (A) there is no finding or admission of any
violation of legal requirements or any violation of the rights of
any Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party;
and (iii) the indemnified party will have no liability with respect
to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of
the commencement of any Proceeding and the indemnifying party does
not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.

           (c)   Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it or its
affiliates other than as a result of monetary damages for which it
would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume
the exclusive right to defend, compromise, or settle such
Proceeding, but the indemnifying party will not be bound by any
determination of a Proceeding so defended or any compromise or
settlement effected without its consent (which may not be
unreasonably withheld).

     10.7  PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS.  A claim
for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom
indemnification is sought.

11.  GENERAL PROVISIONS.

     11.1  EXPENSES.  Seller shall bear its expenses incurred in
connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and
expenses of agents, representatives, counsel, and accountants.
Seller shall cause the Acquired Company to pay  the expenses of
Buyer incurred in connection with the  preparation, execution, and
performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representative, counsel
and accountants.

     11.2  PUBLIC ANNOUNCEMENTS.  Any public announcement or
similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time
and in such manner as the Buyer and Seller agree.  Except as
necessary to complete the Contemplated Transactions, unless
consented to by the other parties in advance in writing or required
by legal requirements, prior to the Closing the parties shall, and
shall cause their Related Person  to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to
any Person. Seller and Buyer will consult with each other
concerning the means by which the Acquired Company's employees,
customers, and suppliers and others having dealings with the
Acquired Company will be informed of the Contemplated Transactions.

     11.3  CONFIDENTIALITY.  Except as required by Law and except
for disclosure to their respective officers, directors, agents, and
advisors as necessary to complete the Contemplated Transaction,
between the date of this Agreement and the Closing Date, Buyer and
Seller will maintain in confidence, and will cause the directors,
officers, employees, agents, and advisors of

                              25

the Buyer and the Acquired Company to maintain in confidence, and
not use to the detriment of another party any written, oral, or
other information obtained in confidence from another party
or the Acquired Company in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already
known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available
through no fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such
information is required by legal proceedings.

If the Contemplated Transactions are not consummated, each party
will return or destroy as much of such written information as the
other party may reasonably request.

     11.4  CPI CORP. GUARANTY.  CPI Corp. hereby guarantees the
Seller's performance of its obligations under Sections 5.14, 9.3
and 10.

     11.5  NOTICES.  All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or
to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):

           (a)   CPI or Seller: Ridgedale Prints Plus, Inc.
                                1706 Washington Avenue
                                St. Louis, Missouri  63103
                                Attn: Chief Executive Officer
                                Facsimile No.: (314) 231-4233

           with a copy to:      CPI Corp.
                                1706 Washington Avenue
                                St. Louis, Missouri  63103
                                Attn: General Counsel
                                Facsimile No.: (314) 231-4233

           (b)   Buyer:         TRU Retail, Inc.
                                Attn: Theodore R. Upland III
                                2500 Bisso Lane, Building 200
                                Concord, California 94520
                                Facsimile No.: 925/602-0495

     11.6  JURISDICTION; SERVICE OF PROCESS.  Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any
of the parties in the courts of the State of Delaware, or, if it
has or can acquire jurisdiction, in the

                              26

appropriate United States District Court for Delaware, and each of
the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served
on any party anywhere in the world.

     11.7  FURTHER ASSURANCES.  The parties agree (a) to furnish
upon request to each other such further information, (b) to execute
and deliver to each other such other documents, and (c) to do such
other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

     11.8  WAIVER.  The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure
nor any delay by any party in exercising any right, power,
or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by
Applicable Law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of  the
claim or right unless in writing signed by the other party; (b) no
waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to
or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.

     11.9  ENTIRE AGREEMENT AND MODIFICATION.  This Agreement
supersedes all prior agreements between the parties with respect to
its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to
its subject matter.  This Agreement may not be amended except by a
written agreement executed by the party to be charged with the
amendment.

     11.10 ASSIGNMENT.  Neither party may assign this Agreement or
its rights or obligations under this Agreement without the consent
of the other party;  provided, however, that in the event the
Seller or CPI Prints Plus, Inc. are liquidated or merged into any
affiliate of the Seller, then, for purposes of this Agreement,
Seller shall mean the successor to the assets of the Seller
following such liquidation or merger.  No such liquidation or
merger shall be deemed to relieve CPI Corp of its obligations under
this Agreement, including its obligations under Section 11.4.

     11.11 SEVERABILITY.  If any provision of this Agreement is
held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.

     11.12 SECTION HEADINGS; CONSTRUCTION.  The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references
to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will
be construed to be of such gender or number as the

                              27

circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.

     11.13 TIME OF ESSENCE.  With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the
essence.

     11.14 GOVERNING LAW.  This Agreement will be governed by the
laws of the State of Delaware, without regard to conflicts of laws
principles.

     11.15 COUNTERPARTS.  This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together, will
be deemed to constitute one and the same agreement.

          [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                              28

     IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

                                  RIDGEDALE PRINTS PLUS, INC.

                                  By: \s\ Russell Isaak
                                      -------------------------
                                      Name:  Russell Isaak
                                      Title: Vice President

                                  TRU RETAIL, INC.

                                  By: \s\ Theodore R. Upland, III
                                      ---------------------------
                                      Theodore R. Upland III
                                      Title:

Agreed to and accepted.

CPI CORP.

By:  \s\ Russell Isaak
    -------------------------------
    Name:   Russell Isaak
    Title:  President

                              29

                       SCHEDULE 2.4 (a)(iii)

                  EXECUTIVE EMPLOYMENT AGREEMENT

     This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement"), is made
and entered into effective as of, 2001 ("Effective Date") by and
between TRU Retail, Inc. a California corporation "Employer") and
Theodore R. Upland III ("Executive").

     1.   RECITALS

          1.1  EMPLOYER.  Employer was formed to acquire all of the
stock or assets of Prints Plus, Inc., a California corporation
("PPI"), engaging in the business of owning and operating certain
mall-based print, poster and framing stores under the trade name
"Prints Plus".  Following the acquisition, Employer will engage in
the same business.

          1.2  EXECUTIVE.  Executive has significant experience and
expertise in the management of companies engaging in such business,
including as the current President and Chief Executive Officer of
Prints

          1.3  PURPOSE.  Following the contemplated acquisition,
Employer will need to employ a person of Executive's experience and
skills as its President and Chief Executive Officer.  Employer
wishes to so employ Executive, and Executive wishes to so be
employed.

NOW THEREFORE, in consideration of the covenants and agreement
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, Employer and Executive
agree as follows regarding such matters.

     2.   AGREEMENT

          2.1  EMPLOYMENT.

               2.1.1  Employment.  Effective upon the closing of
the proposed acquisition, Employer hereby employs Executive, and
Executive hereby accepts employment by Employer, during the
Employment Period provided for hereunder as Employer's President
and Chief Executive Officer.  For as long as Executive is employed
by Employer during the term of this Agreement, Executive shall also
be elected as a member of the Board of Directors.  All prior
agreements relating to Executive's employment by PPI shall
terminate effective as of the closing of the proposed acquisition.

               2.1.2  Duties.  As President and Chief Executive
Officer of Employer,  Executive shall be the senior executive
officer with overall responsibility for
the day-to-day control, management and administration of Employer's
business as is typical for executives with similar titles in
similar companies, subject to the overall control and authority of,
and oversight by, such Employer's  Board of Directors.  Executive
shall also perform such other duties and responsibilities
commensurate with his title as the Board of Directors may from time
to time reasonably determine. In fulfilling such roles, Executive
shall devote his full business time (other than during permitted
vacation time and sick-leave) during normal business hours to the
business and affairs of Employer, use his best efforts to promote
Employer's interests, and otherwise perform faithfully and
efficiently his responsibilities hereunder, provided, however, that
it is specifically understood that Executive's service on civic or
charitable boards or committees, or with the prior written consent
of Employer's Board of Directors, other corporate boards, not
significantly interfering with his performance hereunder shall be
permitted and shall not be deemed to conflict with such
responsibilities.

          2.2  TERM OF EMPLOYMENT.

               2.2.1  Employment Period.  The term of this
Agreement shall commence effective upon, and simultaneously with,
the Closing, if any, of the acquisition transaction provided for
under that certain proposed Stock Purchase Agreement between
Employer and Ridgedale Prints Plus, Inc. a Minnesota corporation
(the "Commencement Date"), and shall continue thereafter for a
period of five (5) full years ("Employment Period"). Upon the
expiration of the initial Employment Period, and upon each
anniversary thereof, the Employment Period shall automatically be
extended for an additional one (1) year period unless Executive or
the Corporation notifies the other in writing at least sixty (60)
days prior to the commencement of any such one year period
of an intention to terminate this Agreement.  The failure of any
such Closing to occur shall result in this Agreement becoming null
and void and of no further force or effect.

               2.2.2  Termination.

                      (a) General.  The term of this Agreement
shall end at the end of the Employment Period, unless terminated
sooner pursuant to Subparagraphs 2.2.2(b), (c) and/or (d).

                      (b) Death.  This Agreement shall terminate
automatically upon Executive's death; provided, however, that any
such termination shall not terminate the rights, if any, accruing
to Executive or any beneficiary of Executive under this Agreement
and/or any Employer plan or program in which Executive participates
as of the date of his death.

                      (c) Disability.  Employer may terminate this
Agreement upon the permanent disability of Executive; provided,
however, that such termination shall not terminate the rights, if
any, accruing to Executive or any beneficiary of Executive
under this Agreement and/or any Employer plan or program in which
Executive participates as of the date of his disability. For
purposes of this Agreement, "permanent disability" shall mean the
inability of Executive to perform substantially all of the services
contemplated under Paragraph 2.1.2 for a period of at east one
hundred eighty (180) consecutive calendar days or for thirty-five
(35) weeks (whether or not consecutive) in any twelve (12) month
period on account of any sickness. injury, or other

                              2

infirmity or disability.

                      (d) Cause.  Employer may terminate the
employment of Executive hereunder upon the occurrence of any event
constituting "Cause". For purposes of this Agreement, "Cause" shall
mean only (i) any gross negligence or willful misconduct of
Executive in the performance of his duties hereunder, (ii) any act
or dishonesty or fraud of Executive with respect to Employer, (iii)
any material breach by Executive of any material obligation
hereunder which is not cured within the cure period provided for
below; or (iv) Executive's commission of any act (including but not
limited to a felony or crime involving moral turpitude) causing
material harm to the standing and reputation of Employer as
determined in good faith by the non-employee members of Employer's
Board of Directors. Any termination of Executive's employment for
purported "Cause" shall be communicated by Employer to Executive in
a written notice of termination given in accordance with Subsection
6.3, setting forth in detail the facts and circumstances claimed as
the reason for such termination and providing Executive at least
sixty (60) days to remedy any act constituting "Cause" under
Subparagraph 2.2.2(d)(iii).

          2.3  CONTINUING OBLIGATIONS OF EMPLOYER UPON TERMINATION.

               2.3.1  For Cause.  If Employer terminates
Executive's employment hereunder for Cause, this Agreement shall
terminate without further obligation of Employer to Executive
hereunder, except for the payment of Executive's Base Salary
through the date of such termination.

               2.3.2  Without Cause. If Employer terminates
Executive's employment hereunder for any reason other than Cause,
Employer shall (a) pay Executive upon such termination in one
lump-sum an amount equal to the total of (i) all bonus
payments Executive would have been entitled to receive for the year
of such termination (calculated as if Executive had remained
employed through the end or such year); and (ii) the net present
value (discounted at six percent (6%)) on the termination date of
all retirement benefits due Executive under Subparagraph 2.4.3(c);
and (b) continue paying Executive (at the time and in the manner he
would have otherwise received it) the greater of (i) all remaining
Base Salary Executive would have received through the remainder of
the Employment Period in the absence of such termination; or (ii)
an amount equal to one year's Base Salary.  Further, upon any such
termination without Cause, Executive shall become immediately and
fully vested in the retirement benefits due Executive under
Subparagraph 2.4.3(c) and all other employment related benefits
under any plan or other arrangement to which he is a party and with
respect to which his actual vesting was otherwise contingent only
upon the passage of time.  Except to the extent prohibited by
law or the terms of an applicable plan, Executive shall be entitled
to continue his participation in the Employer's health and welfare
benefit plans on the same terms as active employees through the
remaining period in which he receives payment of Base Salary
pursuant to this subparagraph.

               2.3.3  Termination Decisions.  Any termination of
Employee by Employer pursuant to subsection 2.3.1 or 2.3.2 above
shall be made exclusively by the non-employee members of Employer's
Board of Directors.  Neither Executive nor any

                              3

other employee of Employer shall be entitled to participate in
decisions regarding termination of Executive.

               2.3.3  Resignation.  If Executive terminates his
employment by Employer hereunder prior to the end of the Employment
Period, Employer shall pay Executive in one lump-sum within five
(5) days of such resignation an amount equal to the total of (a)
the amount of all base Salary and any sick/vacation pay owing or
accruing to his benefit through the date of termination, and (b)
the net present value (discounted at six percent (6%)) on the
resignation date of all retirement benefits due Executive under
Subparagraph 2.4.3(c), based on the Vesting Percentage as of the
date of Executive's resignation, calculated in accordance with
Subparagraph 2.4.3(d).

               2.3.4. No Obligation To Mitigate.  In no event shall
Executive have any obligation to mitigate any damages in connection
with any termination of his employment hereunder without Cause (by
seeking alternative employment or by any other means), and
Employer's continuing obligations under Subparagraph 2.3.2 shall
remain in full force and effect regardless of whether or not
Executive secures new employment or otherwise mitigates any damages
following any termination without Cause. Further, Employer shall
not otherwise have any right of set-off in connection with its
continuing obligations under Subparagraph 2.3.2.

          2.4  COMPENSATION.  As consideration for the performance
by Executive of his obligations under this Agreement, Employer
shall compensate Executive as follows:

               2.4.1  Base Salary.

                      (a)  General.  During the entire term of his
employment Executive shall receive a base salary ("Base Salary")
payable in equal bi-weekly installments, or at such other intervals
as salary is normally paid by Employer to its employees, at an
annual rate of at least Three Hundred Thousand Dollars
($300,000.00) first fiscal year, Three Hundred Twenty-five Thousand
($325,000.00) second fiscal year Three Hundred Fifty Thousand
($350,000.00) third fiscal year, Three Hundred Seventy-five
Thousand ($375,000.00) fourth fiscal year, and Four Hundred
Thousand ($400,000.00) fifth fiscal year.

               2.4.2  Annual Bonus.

                      (a) General.  In addition to Base Salary for
each year during the term of his employment, Executive shall
receive an annual bonus in accordance with a bonus plan which is
consistent with the bonus plan in effect for the current Fiscal
Year 2001 (attached as Exhibit A) and based on the Company's net
operating income before interest and taxes.

               2.4.3  Death, Disability and Supplemental Retirement
Benefits.

                      (a) Death Benefits.  In the event of
Executive's death, unless (1) Executive's employment with the
Corporation was terminated for Cause or (2)

                              4

Executive (or his Beneficiary) is entitled to receive Supplemental
Retirement Benefits pursuant to Subparagraph 2.4.3(c). the
Corporation shall pay to Executive's Beneficiary an annual death
benefit equal to forty percent (40%) (but not to exceed $100,000)
of the highest annual Base Salary paid to Executive from and after
February 4, 2001 for the Fiscal Year of his termination of
employment with the Corporation, payable in equal monthly
installments, commencing with the month following the month of
Executive's death and ending with the one-hundred twentieth (120th)
month following the month of Executive's death.

                      (b) Disability Benefits.  In the event of
Executive's Permanent Disability prior to attaining age 65 and
prior to termination of employment with the Corporation, unless
Executive's employment with the Corporation was terminated for
Cause, the Corporation shall pay Executive annual disability
benefits equal to forty percent (40%) (but not to exceed $100,000)
of the highest annual Base Salary paid to Executive from and after
February 4, 2001 for the Fiscal Year in which Executive
terminated employment as a result of Permanent Disability and
ending on the earlier of (i) the month in which Executive reaches
age 65 or (ii) the month of his death.  Disability benefits
pursuant to this Subparagraph (b) shall be reduced by any amounts
paid to Executive under the Corporation's long-term liability
Insurance policy, but shall not be reduced for any payments
received by Executive from social Security or from any
disability insurance coverage individually owned by Executive.

                      (c) Supplemental Retirement Benefits.

                          (1) In the event of Executive's
Retirement after completion of at least five (5) Years of Service,
unless Executive's employment with the Corporation was terminated
for Cause, the Corporation shall pay Executive retirement benefits
for ten (10) years in an annual amount equal to forty percent (40%)
(but not to exceed $100,000) or the highest annual Base Salary paid
to Executive from and after February 4, 2001 ("Supplemental
Retirement Benefits").  In the event of Executive's Retirement
before completion of five (5) Years of Service, Corporation shall
pay Executive retirement benefits based on the applicable Vesting
Percentage as set forth in Subparagraph 2.4.3(c)(4).

                          (2) Supplemental Retirement Benefits
shall be payable in one hundred twenty (120) equal monthly
installments commencing with the month following the later of (i)
the month of Executive's retirement or (ii) the month during which
Executive reaches age sixty-five (65).  If Executive dies prior to
the end of the one hundred twenty (120) month period during which
Supplemental Retirement Benefits are payable, Supplemental
Retirement Benefits shall be payable during the remainder of such
120-month period to his Beneficiary.

                          (3) Notwithstanding anything herein to
the contrary, in the event of Executive's termination of employment
with the Corporation prior to attaining age 65 as a result of
Permanent Disability, if Executive attains age 65 and his
employment with the Corporation was not terminated for Cause, the
Corporation shall pay to Executive Supplemental Retirement Benefits
set forth in this Subparagraph 2.4.3(b) in accordance with
Executive's Vesting Percentage, commencing as of the month
following the month in which Executive attains age 65;

                              5

provided, however, that any Supplemental Retirement Benefits paid
pursuant to this sentence shall be reduced by any amounts paid to
Executive under the Corporation's long-term disability insurance
policy (but shall not be reduced for any payments received by
Executive from Social Security or from any disability insurance
coverage individually owned by Executive) for the same period.

                          (4) The Supplemental Retirement Benefits
described in Subparagraph 2.4.3(c) of this Agreement shall vest in
accordance with the following schedule:

                      Commencement Date                    -  20%
                      1st Anniversary of Commencement Date -  40%
                      2nd Anniversary of Commencement Date -  60%
                      3rd Anniversary of Commencement Date -  80%
                      4th Anniversary of Commencement Date - 100%

                      (d) Survivability of Death. Disability and
Supplemental Retirement Benefits.  In the event of Executive's
Retirement, Disability or Death, Executive's entitlement to Death
and Disability Benefits pursuant to this Subsection 2.4.3(a) and
2.4.3(b) and Supplemental Retirement Benefits pursuant to
Subsection 2.4.3(c), and subject to Subsection 2.3, shall survive
the Term of Employment and Executive or his beneficiary shall be
entitled to such Death and Disability Benefits and Supplemental
Retirement Benefits based on the same terms and conditions as would
have been applicable had his death disability or retirement, as the
case may be, occurred during the Term of Employment.

               2.4.4  Vacation.  Executive shall be entitled to
five (5) weeks of paid vacation each year during the term of this
Agreement, with any unused portion thereof, at his election, being
carried over to any subsequent year or payable to him at the
end of the term of this Agreement based on his Base Salary for the
year(s) to which such unused portion(s) relates.

               2.4.5  Other Employment Benefits.  As further
compensation hereunder, Executive may participate in all other
employee compensation and benefit plans and arrangements as
Employer makes available to employees in similar positions
including, without limitation, medical, dental, disability, group
life, accidental death and travel accident insurance, savings plans
and retirement plans.

               2.4.6  Withholding.  Employer may withhold from all
compensation payable under this Agreement federal, state and local
taxes as required under applicable
laws or regulations.

          2.5  EXPENSES.  Employer shall reimburse Executive for
all reasonable and necessary expenses paid by Executive in
connection with Employers business upon

                              6

receipt of such substantiation as Employer requires in accordance
with its customary reimbursement policies and procedures.

     3.   CONFIDENTIALITY; NON-DISCLOSURE;

          Executive acknowledges that during the course of
Executive's employment by Employer hereunder, Executive shall
become acquainted with confidential information of Employer,
including, without limitation, customer identities, supplier
identities and terms, purchase terms, sales techniques, sales
procedures and equipment/supply information, equipment and supply
acquisition procedures and processes and sources, customer
evaluation procedures, customer maintenance and supply maintenance
procedures and corresponding information relating to persons, firms
and corporations which am or may become customers of Employer or
from which Employer obtains various products and supplies for sale,
resale and distribution to customers ("Confidential Information").

          As further consideration given by him hereunder, Employer
agrees that Executive will not, except as authorized by Employer in
writing, during or at any time after the termination of his
employment by Employer hereunder, directly or indirectly, use for
himself or others, or disclose, communicate, divulge, furnish to or
convey to any other person, firm, or corporation, any Confidential
Information.

          Further, Executive, upon termination of his employment
hereunder by Employer or at any other time upon Employers request,
shall deliver promptly to Employer all manuals, letters, notes,
notebooks, reports, formulations, computer programs and similar
items, memoranda, lists of customers, customer history information
and all other materials and copies thereof relating in any way to
Employer's business which are in his possession or under his
control, shall not make or retain any copies of any of the
foregoing and shall so represent to Employer.

     4.   NONCOMPETITION; NONINDUCEMENT

          (a)  Executive agrees that he will not, during the Term
of Employment and for a period of two (2) years thereafter
("Restricted Period"), for any cause or reason, directly or
indirectly, (i) engage in any business in competition with the
Corporation and its affiliates or supply or sell to current
customers of the Corporation or its affiliates; or (ii) own,
manage, control, advise, be employed by, consult with or materially
participate in or be involved in any manner with the ownership,
management, operation or control of, individually or through any
other entity or device, any business that competes with the
business conducted by the Corporation or any affiliate; provided
that the mere ownership as an investor of not more than five
percent (5%) of the securities of a corporation or other business
enterprise shall not, in and of itself, be deemed to violated this
Subsection 4(a).

          (b)  Executive agrees that for the Term of Employment and
during the Restricted Period, (i) Executive shall not use any
Confidential Information for the purpose

                              7

of inducing or attempting to induce any present, former or
prospective customer of the Corporation or its affiliates to become
a customer of Executive or any person, firm or corporation or
business association with which Executive is affiliated in any
capacity with respect to the markets supplied by the Corporation or
its affiliates; or (ii) Executive shall not directly or indirectly
solicit for employment or employ any of the Corporation's
employees to work for Executive or any business association with
which/whom Executive is affiliate or to work for any other company
in the markets supplied by the Corporation or its affiliates.

     5.   ARBITRATION.

          Any dispute or claim arising out of or in connection with
this Agreement, including any breach or alleged breach, shall be
settled by binding arbitration, provided that the prevailing party
therein, as determined by the arbitrator(s), shall be entitled to
recover from the non-prevailing party the prevailing party's
attorneys' fees and related costs incurred in connection with the
matter.

     6.   MISCELLANEOUS.

          6.1  ENTIRE AGREEMENT.  This Agreement, which includes
the referenced Exhibit A, constitutes the entire agreement and
understanding between the parties regarding the matter of
Executive's employment by Employer, supercedes all prior and
current understandings and agreements, whether written or oral,
with respect to such subject matter, and may only be modified or
amended only by written instrument executed by both parties.

          6.2  COUNTERPARTS.  This Agreement may be executed in any
number of counterparts each of which shall constitute an original
and which together shall constitute one instrument.

          6.3  NOTICES.  All notices, demands or communications
required or permitted hereunder shall be in writing.  Any notice,
demand or other communication given under this Agreement shall be
deemed to be given if given in writing (including telex, telecopy
or similar transmission) addressed as provided below (or at such
other address as the addressee shall have specified by notice
actually received by the addresser) and if either (a) actually
delivered in fully legible form, to such address (evidenced in the
case of a telex by receipt of the correct answer back) or (b) in
the case or a letter, five days shall have elapsed after the same
shall have been deposited in the United States mails, with
first-class postage prepaid and registered or certified.

                              If to Employer, addressed to it:

                              TRU Retail, Inc.
                              2500 Bisso Lane, Building 200
                              Concord, California 44520

    With a copy to:           CPI Corp.
                              1706 Washington Avenue

                              8

                              St. Louis, Missouri 63101
                              Attention: President

                             If to Executive, addressed to him at:

                             Theodore R. Upland, III
                             41 Sugarloaf Lane
                             Alamo, California 94507

          6.4  SURVIVAL OF CERTAIN TERMS.  The terms of Paragraphs
2.3.2, 2.3.3.  2.4.3 and Sections 3, and of this Agreement shall
survive its termination.

          6.5  NO ASSIGNMENT.  Neither party may assign its rights
nor delegate its duties hereunder without the prior written consent
of the other which consent the other may give or withhold in its
absolute discretion.

          6.6  GOVERNING LAW.  This Agreement shall be governed by
and construed in accordance with the laws of the State of
California without reference to conflicts of laws principles.

IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date described in the introductory
paragraph hereof and otherwise on the terms and conditions hereof.

                              TRU Retail, Inc.
                              A California corporation

                              By:__________________________

                              Title:_________________________

                              _____________________________
                              Theodore R. Upland III

                              9

                                                        Exhibit A

ANNUAL BONUS
------------

FISCAL YEAR 2001 EBIT--$652,700.

BONUS IF 2001 EBIT OF $652,000 IS ACHIEVED: 20% OF BASE SALARY

                              10

                        SCHEDULE 2.4(a)(iv)

                  SETTLEMENT AND SATISFACTION AGREEMENT

     THIS SETTLEMENT AND SATISFACTION AGREEMENT ("the Agreement"),
dated as of June ___, 2001 is made and entered into by and between
CPI PRINTS PLUS, INC., a Delaware corporation ("Company") and
THEODORE R. UPLAND III, an individual ("Executive").

                        PRELIMINARY STATEMENTS:

     WHEREAS,  the Company's wholly-owned subsidiary, Ridgedale
Prints Plus, Inc. ("RPP"), and TRU Retail, Inc., a California
corporation, are parties to a Stock Purchase Agreement (the
"Purchase Agreement") dated as of April ___, 2001 pursuant to which
TRU Retail, Inc. is purchasing from RPP 100% of the issued and
outstanding shares of Prints Plus, Inc., a California corporation;

     WHEREAS, the Executive, as the current sole owner of TRU
Retail, Inc., receives benefit from the consummation of the
transactions contemplated by the Purchase Agreement;

     WHEREAS, the Company and the Executive are parties to that
certain Employment Agreement dated September 30, 1997, as amended
by that First Amendment to Employment Agreement dated as of May 31,
1998 (the "Employment Agreement"); and

     WHEREAS, it is a condition of the Purchase Agreement that the
Company and the Executive enter into this Agreement.

     NOW, THEREFORE, to induce the Company to enter into the
Purchase Agreement and for other consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the
Executive hereby agree as follows:

AGREEMENT:

     1.   Termination.  Notwithstanding anything to the contrary
contained in the Employment Agreement, the parties agree that
effective on the date hereof the Employment Agreement is hereby
terminated and cancelled in its entirety, that the Employment
Agreement shall have no further force and effect and that neither
party shall have any further obligations thereunder.

     2.   Executive Release of Company.  Executive hereby releases
and forever discharges the Company, all affiliates of the Company
other than Prints Plus, Inc., and all of each of their
successors, assigns, officers, directors, agents and employees,
jointly and severally, from any and all civil and/or administrative
actions, claims, demands, rights, proceedings, causes of action of

                              1

any nature and description whatsoever, whether state or federal or
at common law, legal, equitable or regulatory in nature, known or
unknown, suspected or unsuspected, disclosed or undisclosed,
absolute or contingent, that Executive may now have, or ever had,
or can, shall or may at any time in the future have, or is or ever
was capable of asserting against the Company or any of them arising
from or in connection with the Executive's employment with the
Company, the Employment Agreement or cancellation and termination
of the Employment Agreement, whether for death, disability,
supplemental retirement and other benefits provided for
in the Employment Agreement or any plan of the Company, or
otherwise, including, without limitation, any and all such actions,
claims, demands, rights, proceedings and causes of action of
and/or for wrongful discharge, breach of contract, employment,
re-employment, back pay, front pay, wages, additional pay,
attorney's fees, additional benefits, injunctive relief, and/or
damages of any kind; and of all claims under all federal, state,
and local statutes, regulations, and ordinances, and state and
federal common law, including, but not limited to, claims or rights
under the Age Discrimination in Employment Act, the Older Workers'
Benefit Protection Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, Title VII of the Civil Rights Act of
1964, as amended, or any similar law of any state relating to civil
rights, the Employee Retirement Income Security Act of 1974,
California Workers' Compensation law or any similar law of any
other state relating to workers' compensation benefits, and the
National Labor Relations Act.

     3.   Consideration.  As sole consideration for its obligations
and undertakings herein, the Company shall deliver to Executive on
the Effective Date (as that term is defined in Section 4 hereof),
by cash or wire transfer, immediately available funds in the amount
of Two Hundred Thirteen Thousand Eighty Six and 00/100 Dollars
($213,086.00), sufficiency of which is hereby acknowledged by
Executive.

     4.   Executive Acknowledgement.  Executive acknowledges: (a)
having read this entire Agreement; (b) fully understanding the
terms and effects of this Agreement; (c) having been advised by the
Company to, and of the right to, discuss all aspects of this
Agreement with an attorney prior to its execution; (d) having been
advised of the right to take twenty-one (21) calendar days in which
to consider whether to accept the terms of this Agreement; (e)
having been advised of the right to revoke this Agreement for up to
the seven (7) calendar days after signing it, and that this
Agreement shall not be effective until the expiration of such seven
(7) day period (the day immediately following such expiration being
the "Effective Date"); and (f) having freely executed this
Agreement for the purposes of inducing the payment by the Company.

     5.   Authority of Signatories to this Agreement.  Each party
hereto expressly represents and warrants that the person executing
this Agreement is fully and duly authorized to bind that party to
all the terms hereof and that it is the sole owner of the claims
being released herein.

     6.   Entire Agreement.  This Agreement constitutes and
expresses the entire understanding, agreement and undertaking of
the parties with respect to the subject matter hereof,
and supercedes all prior agreements, if any, written or oral.
There is no understanding,

                              2

agreement, undertaking, representation or warranty, express or
implied, which in any way limits, extends, defines or relates to
the subject matter of this Agreement that is not incorporated
herein.

     7.   Counterparts.  This Agreement may be executed on any
number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

     8.   Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

     9.   Amendments in Writing.  None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Company and
Executive.

     10.  Section Headings.  The section headings used in this
Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in
the interpretation hereof.

     11.  Successors and Assigns.  This Agreement shall be binding
upon the successors and assigns of Executive and shall inure to the
benefit of the Company and its successors and assigns.

     12.  Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of
Delaware. Each of the parties hereby (i) consents to the personal
jurisdiction of the state and federal courts located in the State
of Delaware in connection with any controversy related to this
Agreement; (ii) waives any argument that venue in any such forum is
not convenient, (iii) agrees that any litigation initiated by the
other party in connection with this Agreement shall be venued
only in a state or federal court located in the State of Delaware;
and (iv) agrees that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law.

         [Remainder of this Page Intentionally Left Blank.]

                              3

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, all with the approval of their respective counsel, on
the date provided next to the signature of each party.

                              "Executive"

                              ________________________________
                              Theodore R. Upland III

                              "Company"

                              CPI PRINTS PLUS, INC.

                              By:   __________________________
                              Name: __________________________
                              Title:__________________________

                              4

                       SCHEDULE 3.1

The Acquired Company is not qualified in its name to conduct
business in the following jurisdictions:

 Idaho         - qualified as Ridgedale Prints Plus, Inc. d/b/a
                 Wall Decor and More

 Illinois      - foreign qualification revoked in February 1996 for

                 failure to file annual report since March 1995

 Maryland      - qualified as Maryland Prints Plus, Inc.

 Missouri      - foreign qualification revoked in March 1999 for
                 failure to file annual reports since March 1995;
                 reinstatement in progress

 New Hampshire - qualified as Ridgedale Prints Plus, Inc.

 Wisconsin     - foreign qualification revoked in October 1999 for
                 failure to file annual report since 1998

                        SCHEDULE 3.5

Met Life Dental (began August 2000)

Prudential Long Term Disability Plan (began July 2000)

Great West One Health Plan (began May 2000)

Prudential Basic Life AD&D Insurance (first $20,000 falls under
Great West policy, includes optional term life insurance)

     CPI Corp. Stock Option Plan and Stock Option Agreements -
     includes Prints Plus employees

                       SCHEDULE 10.2

Prints Plus, Inc. Litigation

1.)  Daroga v. Prints Plus - personal injury on July 26, 1999
     Case # C003112, filed November 2, 2000
     Superior Court of CA, County of Contra Meza
     Attorney:   Grace Medonia
                 Joseph Costello & Assoc., Walnut Creek, CA
     Adjuster:   Tony Kier
                 Travelers

2.)  McKee v. Prints Plus - personal injury
     Case # 0006-06530, filed June 27, 2000
     Circuit Court of Oregon, Multnomah County
     Attorney:   Don McClain
                 Tooze, Duden, Creamer, Frank & Hutchison,
                  Portland, OR
     Adjuster:   Toni Bowes
                 Travelers

3.)  Freimuth v. Prints Plus - retaliation for invoking Workers
      Compensation and discrimination based on a perceived
      disability
     Case # STEMIW000828-11424, filed August 28, 2000
     Oregon Bureau of Labor and Industries, Portland Office
     Attorney:   Tracy Smith
                 Heller Ehrman, San Francisco, CA
     Adjuster:   Marie Page
                 Travelers

4.)  Prints Plus, Inc. (an Idaho corporation) v. CPI Corp. and
      Prints Plus, Inc. (a California corporation) - trademark
     Case # CIV 00-0653-S-LMB, filed November 21, 2000
     U.S. District Court, District of Idaho
     Attorney:   Alan Nemes
                 Blackwell Sanders Peper Martin, St. Louis, MO

5.)  E.M. v. P.P., Inc. - sexual harassment
     Superior Court of New Jersey, Ocean County, Law Division
     Attorney:   Susan Hodges
                 Archer & Greiner, Haddonfield, NJ

                                                       EXHIBIT A

               LIMITED GUARANTY AND PLEDGE AGREEMENT

This Limited Guaranty and Pledge Agreement (this "Agreement"),
dated as of April ___, 2001, is made by THEODORE R. UPLAND III, an
individual with an address for notice at _______________________
("Guarantor") for the benefit of RIDGEDALE PRINTS PLUS, INC., a
Minnesota corporation, with an address for notice at 1706
Washington Avenue, St. Louis, Missouri  63103 ("RPP").

     WHEREAS, RPP and Guarantor are parties to a Stock Purchase
Agreement (the "Purchase Agreement") dated April ____, 2001
pursuant to which TRU Retail, Inc, a California corporation
("Buyer"), is purchasing from RPP 100% of the issued and
outstanding shares of Prints Plus, Inc.; a California corporation
("Company");

     WHEREAS, Guarantor, as the current sole owner of the Buyer,
receives benefit from the consummation of the transactions
contemplated by the Purchase Agreement; and

     WHEREAS, it is a condition of the Purchase Agreement that the
Guarantor guarantee performance of certain, but only certain, of
the Buyer's obligations under the Purchase Agreement and secure
such guarantee with a pledge by Guarantor of all of the issued and
outstanding stock of Buyer owned by Guarantor, each as more
specifically set forth herein.

     NOW, THEREFORE, to induce RPP to enter into the Purchase
Agreement and for other consideration the receipt and sufficiency
of which is hereby acknowledged, Guarantor hereby agrees with RPP
as follows:

     1.   Obligations Guaranteed; Guarantee Limited and
Non-Recourse.  The Guarantor hereby absolutely and unconditionally
guarantees to RPP solely the performance by Buyer of
Buyer's redemption obligations under the terms for such
specifically set forth in the Certificate of Designation--Preferred
Stock  attached as Exhibit B to the Purchase Agreement, and a copy
of which is attached hereto as Exhibit A (all, but only, such
redemption obligations of Buyer being the "Obligations").
Notwithstanding anything to the contrary contained in this
Agreement, the liability of Guarantor from time-to-time, if at all,
hereunder shall be a limited liability that shall not exceed the
sum of (i) the then-value (as determined by independent appraisal,
if the parties cannot themselves agree) of the Pledged Shares (as
that term is defined in Paragraph 10), or the proceeds from the
sale of the Pledged Shares, then owned by Guarantor at the time of
any then applicable enforcement action or other action hereunder,
plus (ii) all reasonable costs and expenses, including without
limitation, all court costs and attorneys' and paralegals' fees,
paid or incurred by RPP in endeavoring to collect all or any part
of such liability from, or in prosecuting any action regarding the
Obligations against, Guarantor.  In all events, the value of
the Pledged Shares, or so many of them, as Guarantor may then own
at the time of any then applicable enforcement or other action
hereunder shall be the sole source of recovery by and security of
RPP in connection with Guarantor's guarantee of the Obligations,
and in no event shall Guarantor have any obligation to pay any
monies or deliver any other assets in satisfaction of such
guarantee except for Pledged Shares up to the value thereof then
subject to claim(s) by RPP under this Agreement, but limited in all
cases to the aggregate value of all then remaining Pledged Shares
then owned by Guarantor and to no other assets of Guarantor.

     For clarity, notwithstanding anything to the contrary
contained in this Agreement, the liability of Guarantor with
respect to its guarantee hereunder of the Buyer's performance of
the Obligations shall be "non-recourse," with the exception of the
then-value of the Pledged Shares pledged by Guarantor as the
Pledged Collateral hereunder.  Accordingly, RPP agrees (i) not to
seek to procure or accept payment out of any assets of Guarantor,
other than the then-value of the Pledged Shares comprising the
Pledged Collateral, whether personal or otherwise, or to seek
any judgment for any sums or obligations which are or may be
payable or owing under this Agreement, as well as any claim or
judgment (except as hereafter provided) for any deficiency
and (ii) in the event that any suit is brought on this Agreement,
any judgment obtained against Guarantor in such a suit shall be
enforced only against the Pledged Shares comprising Pledged
Collateral to the extent of their then-value.  Nothing in this
paragraph shall be deemed to (i) be a release of the obligations of
Guarantor under this Agreement, nor the pledge hereunder of the
Pledged Collateral, (ii) preclude RPP from enforcing any of its
rights under this Agreement, except as expressly stated in this
paragraph, (iii) prejudice the rights of RPP as to any of the
conditions of this Agreement, or (iv) preclude RPP from securing a
personal judgment against Guarantor, its successors and assigns,
for damages suffered due to any acts of fraud, misrepresentation or
criminal acts by Guarantor in connection with this Agreement.

     2.   Unconditional Guarantee.  No act or thing need occur to
establish the liability of the Guarantor hereunder, and no act or
thing, except full payment, performance and discharge of all of the
Obligations, shall in any way exonerate the Guarantor hereunder or
modify, reduce, limit or release the Guarantor's liability
hereunder. This is an absolute, unconditional and continuing
guarantee of payment and performance of the Obligations and shall
continue to be in force and be binding upon the Guarantor until all
of the Obligations are paid and performed in full.

     3.   Insolvency of Guarantor. If Guarantor shall be or become
insolvent (however defined), then RPP shall have the right to
declare immediately due and payable, and the Guarantor will
forthwith pay to RPP, the full amount of all of the Obligations. If
Guarantor voluntarily commences or there is commenced involuntarily
against Guarantor a case under the United States Bankruptcy Code,
the full amount of all of the Obligations, whether due and
payable or unmatured, shall be immediately due and payable without
demand or notice thereof.

     4.   Subrogation.  The Guarantor will not exercise or enforce
any right of contribution, reimbursement, recourse or subrogation
available to the Guarantor as to any of the Obligations,
or against any person liable therefor, or as to any collateral
security therefor, unless and until all of the Obligations shall
have been fully paid, performed and discharged.

     5.    RPP's Rights.  RPP shall not be obligated by reason of
its acceptance of this Agreement to engage in any transactions with
or for Buyer.  Whether or not any existing relationship between the
Guarantor and Buyer has been changed or ended and whether or not
this Agreement has been revoked, RPP may enter into transactions
resulting in the continuance of the Obligations and may otherwise
agree, consent to or suffer the continuance of any of the
Obligations, without any consent or approval by the Guarantor and
without any prior or subsequent notice to the Guarantor.  The
Guarantor's liability shall not be affected or impaired
by any of the following acts or things (which RPP is expressly
authorized to do, omit or suffer from time to time, both before and
after revocation of this Agreement, without consent or approval by
or notice to the Guarantor): (i) any acceptance of collateral
security, guarantors, accommodation parties or sureties for any or
all of the Obligations; (ii) one or more extensions or renewals of
the Obligations (whether or not for longer than the original
period) or any modification of the interest rates or maturities, if
any, or other contractual terms applicable to any of the
Obligations or, except as otherwise agreed by RPP and Guarantor,
any amendment or modification of any of the terms or provisions of
the Purchase Agreement or other agreement under which the
Obligations or any part thereof arose; (iii) any waiver or
indulgence granted to Buyer, any delay or lack of diligence in the
enforcement of the Obligations or any failure to institute
proceedings, file a claim, give any required notices or otherwise
protect any of the Obligations; (iv) any full or partial release
of, compromise or settlement with, or agreement not to sue, Buyer
or Guarantor or other person liable in respect of any of the
Obligations; (v) any release, surrender, cancellation or other
discharge of any evidence of the Obligations or the acceptance of
any instrument in renewal or substitution therefor; (vi) any
failure to obtain collateral security (including rights of setoff)
for the Obligations, or to see to the proper or sufficient creation
and perfection thereof, or to establish the priority thereof, or to
preserve, protect, insure, care for, exercise or enforce any
collateral security; or any modification, alteration, substitution,
exchange, surrender, cancellation, termination, release or other
change, impairment, limitation, loss or discharge of any collateral
security; (vii) any collection, sale, lease or disposition of, or
any other foreclosure or enforcement of or realization on, any
collateral security; and (viii) any manner, order or method of
application of any payments or credits upon the Obligations.  The
Guarantor waives any and all defenses and discharges available to
a surety, Guarantor or accommodation co-obligor.

     6.   Waivers by Guarantor.  Subject to the limitations to the
then-value of Pledged Shares on RPP's recourse and/or security
hereunder, Guarantor waives any and all defenses, claims, setoffs
and discharges of Buyer, or any other obligor, pertaining to the
Obligations, except the defense of discharge by payment and
performance in full. Without limiting the generality of
the foregoing, but subject to the limitations to Pledged Shares on
RPP's recourse and/or security hereunder, Guarantor will not
assert, plead or enforce against RPP any defense of waiver,
release, discharge or disallowance in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency
statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Buyer or any other
person liable in respect of any of the Obligations, or any setoff
available against RPP to Buyer or any other such person, whether or
not on account of a related transaction. Subject to the limitations
to the then-value of the Pledged Shares on RPP's recourse
and/or security hereunder, the liability of the Guarantor shall not
be affected or impaired by any voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or
substantially all the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar event
or proceeding affecting, Buyer or any of its assets. The Guarantor
will not assert, plead or enforce against RPP any claim, defense or
setoff regarding it obligations hereunder available to the
Guarantor against Buyer. The Guarantor waives presentment, demand
for payment, notice of acceptance, notice of dishonor or nonpayment
and protest of any instrument or agreement evidencing the
Obligations. RPP shall not be required first to resort for
payment pr performance of the Obligations to Buyer or other
persons, or their properties, or first to enforce, realize upon or
exhaust any collateral security for the Obligations, before
enforcing this Agreement.

     7.   If Payments Set Aside, etc. If any payment applied by RPP
to the Obligations is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including, without
limitation, the bankruptcy, insolvency or reorganization of Buyer
or any other obligor), the Obligations to which such payment was
applied shall for the purpose of this Agreement be deemed to have
continued in existence, notwithstanding such application, and this
Agreement shall be enforceable as to such Obligations as fully as
if such application had never been made.

     8.   Additional Obligation of Guarantor. The Guarantor's
liability under this Agreement is in addition to and shall be
cumulative with all other liabilities of the Guarantor to RPP as
guarantor, surety, endorser, accommodation co-obligor or otherwise
of any of the Obligations or obligation of Buyer, without any
limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides
to the contrary.  In the event this Agreement is placed in the
hands of an attorney for enforcement, Guarantor will reimburse RPP
for all expenses incurred in connection therewith, including
reasonable attorney's fees.

     9.   No Duties Owed by RPP. The Guarantor acknowledges and
agrees that RPP (i) has not made any representations or warranties
with respect to, (ii) does not assume any responsibility
to the Guarantor for, and (iii) has no duty to provide information
to the Guarantor regarding, the enforceability of any of the
Obligations or the financial condition of Buyer or any guarantor.
The Guarantor has independently determined the creditworthiness of
Buyer and the enforceability of the Obligations and until the
Obligations are paid and performed in full will independently and
without reliance on RPP continue to make such determinations.

     10.   Pledge. Guarantor hereby pledges to RPP, and grants to
RPP a security interest in, Guarantor's ownership interest in the
following (the "Pledged Collateral"):

                 all shares of stock of the Buyer or any ownership
     interests in any affiliate of the Buyer from time to time
     acquired by Guarantor in any manner, and the certificates
     representing such shares, and all dividends, distributions,
     cash, instruments and other property from time to time
     received, receivable or otherwise distributed in respect of or
     in exchange for any or all of such shares (collectively, the
     "Pledged Shares").

     11.  Sole Recourse and Security for Obligations.  The pledge
of the Pledged Collateral secures the payment and satisfaction of
all obligations of Guarantor now or hereafter existing under this
Agreement, and the Pledged Shares constitute the sole recourse of
RPP for satisfaction of all such obligations.  Notwithstanding any
other provision of this Agreement, including any provision as may
otherwise be construed as expanding any liability of Guarantor
hereunder beyond the amount provided for in Paragraph 1 of this
Agreement, RPP's sole security for Guarantor's liability hereunder
shall be the Pledged Collateral and RPP's sole recourse for
enforcement of Guarantor's liability hereunder shall be the
then-value of the Pledged Shares in the amount and manner provided
for in such Paragraph 1 and related provisions of this Agreement.

     12.  Delivery of Pledged Collateral.  All certificates or
instruments representing or evidencing the Pledged Collateral have
been, and any replacements therefore shall be delivered to and held
by or on behalf of RPP pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in
form and substance satisfactory to RPP.  RPP shall have the right,
after any default by Guarantor under this Agreement (a "Default")
has occurred, in its discretion and without notice to Guarantor, to
transfer to or to register in the name of RPP or any of its
nominees any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 14(a).  In addition, RPP
shall have the right at any time to exchange certificates
representing or evidencing the Pledged Shares for certificates for
a smaller or larger number of shares.

     13.  Further Assurances.  Guarantor agrees that at any time
and from time to time, at the expense of Guarantor, Guarantor will
promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable, or that RPP may request, in order to perfect and protect
any security interest granted or purported to be granted
hereby or to enable RPP to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.

     14.  Voting Rights; Dividends; Etc.

          (a)  So long as no Default shall have occurred, which
Default remains uncured for more than ninety (90) days:

               (i)    Guarantor shall be entitled to exercise any
     and all voting and other consensual rights pertaining to the
     Pledged Collateral or any part thereof for any purpose
     not inconsistent with the terms of this Agreement.

               (ii)   Guarantor shall be entitled to receive and
     retain any and all dividends or other distributions paid in
     respect of the Pledged Collateral, provided, however, that
     any and all

                      (A) dividends other than in cash in respect
               of, and instruments and other property received,
               receivable or otherwise distributed in respect of,
               or in exchange for, any Pledged Collateral;

                      (B) dividends and other distributions paid or
               payable in cash in respect of any Pledged Collateral
               in connection with a partial or total liquidation
               or dissolution or in connection with a reduction of
               capital, capital surplus or paid-in-surplus, and

                      (C) cash paid, payable or otherwise
               distributed in respect of principal of, or in
               redemption of, or in exchange for, any Pledged
               Collateral,

     shall be, and shall be forthwith delivered to RPP to hold as,
     Pledged Collateral and shall, if received by Guarantor, be
     received in trust for the benefit of RPP, be segregated from
     the other property or funds of Guarantor, and be forthwith
     delivered to RPP as Pledged Collateral in the same form as so
     received (with any necessary endorsement).

               (iii)  RPP shall execute and deliver (or cause to be
     executed and delivered) to Guarantor all such proxies an
     other instruments as Guarantor may reasonably request
     for the purpose of enabling Guarantor to exercise the voting
     and other rights which they are entitled to exercise pursuant
     to clause (i) above and to receive the dividend or interest
     payments which it is authorized to receive and retain pursuant
     to clause (ii) above.

          (b)  Upon the occurrence of a Default that is not cured
within ninety (90) days:

               (i)    All rights of Guarantor to exercise the
     voting and other consensual rights which it would otherwise be

     entitled to exercise pursuant to Section 14(a)(i) and
     to receive the dividends which it would otherwise be
     authorized to receive and retain pursuant to Section 14(a)(ii)

    shall cease, and all such rights shall thereupon become vested
     in RPP, who shall thereupon have the sole right to exercise
     such voting and other consensual rights and to receive and
     hold as Pledged Collateral such dividends and interest.

               (ii)   All dividends and other distributions which
     are received by Guarantor contrary to the provisions of clause
     (i) of this Section 14(b) shall be received in trust for
     the benefit of RPP, shall be segregated from other funds of
     Guarantor and shall be forthwith paid over to RPP as Pledged
     Collateral in the same form as so received (with any necessary
     endorsement).

     15.  Transfers and Other Liens.  Guarantor agrees that it will
not (i) sell, transfer, assign, or otherwise dispose of, or grant
any option with respect to, any of the Pledged Collateral, or (ii)
create or permit to exist any lien, security interest, or other
charge or encumbrance upon or with respect to any of the Pledged
Collateral, except for the security interest under this Agreement.
Notwithstanding the previous sentence, Guarantor shall be
permitted, upon notice to RPP, to transfer or assign all or any
part of the Pledged Collateral to or for the benefit of members of
his immediate family or as otherwise agreed by RPP and Guarantor;
provided any such transferee shall agree in writing to be bound by
the obligations of the Guarantor of this Agreement as if such
transferee was an original party hereto.

     16.  RPP Appointed Attorney-in-Fact.  Guarantor hereby
appoints RPP as Guarantor's attorney-in-fact, with full authority
in the place and stead of Guarantor and in the name of Guarantor or
otherwise, from time to time in RPP's discretion to take any action
and to execute any instrument which RPP may deem necessary or
advisable to accomplish the purposes of this Agreement, including,
without limitation, to receive, indorse and collect all instruments
made payable to Guarantor representing any dividend, or other
distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.

     17.  RPP May Perform.  If Guarantor fails to perform any
agreement contained herein, RPP may itself perform, or cause
performance of, such agreement, and the expenses of RPP
incurred in connection therewith shall be payable by Guarantor
under Section 20.

     18.  Reasonable Care.  RPP shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is
accorded treatment substantially equal to that which RPP accords
its own property, it being understood that RPP shall not have any
responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders, or
other matters relative to any Pledged Collateral, whether or not
RPP has or is deemed to have knowledge of such matters; provided,
however, that so long as no Default shall have occurred, upon
Guarantor's written request RPP shall, in its reasonable
discretion, cooperate in connection with such matters, or (ii)
taking any necessary steps to preserve rights against any parties
with respect to any Pledged Collateral.

     19.  Remedies Upon Default.  If any Default shall have
occurred and remain uncured for more than ninety (90) days:

          (a)  RPP may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies
of a secured party on default under the Uniform Commercial Code
(the "Code") in effect in the State of Delaware at that time, and
RPP may also, with reasonable notice, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of RPP's offices or
elsewhere, for cash, on credit or for future delivery, and upon
such other terms as RPP may deem commercially reasonable, the
parties hereto agreeing that RPP shall for all purposes be deemed
to have control over the Pledged Collateral within the meaning of
the Code.  RPP shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given.  RPP may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.  With respect to any of the Pledged Collateral
that consists of securities not registered under the securities
laws of the United States or any state, Guarantor agrees that it
shall be commercially reasonable for RPP to sell the Pledged
Collateral to a buyer who will represent that he is purchasing
solely for investment and not with a view to the resale or
distribution of such securities, or in such other manner as counsel
for RPP may require to comply with applicable securities laws.

          (b)  Any and all cash proceeds received by RPP in respect
of any sale of, collection from, or other realization upon all or
any part of the Pledged Collateral may, in the discretion of RPP,
be held by RPP as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to RPP
pursuant to Section 20) in whole or in part by RPP against, all or
any part of the Obligations in such order as RPP shall elect.  Any
surplus of such cash or cash proceeds held by RPP and remaining
after payment in full of all the Obligations shall be paid over to
Guarantor or to whomsoever may be lawfully entitled to receive
such surplus.

     20.  Expenses.  Guarantor will upon demand pay to RPP the
amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents,
which RPP may incur in connection with (i) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (ii) the exercise
or enforcement of any of the rights of RPP hereunder, or (iii) the
failure by any Guarantor to perform or observe any of the
provisions hereof.

     21.  Security Interest Absolute.  All rights of RPP and
security interests hereunder, and all obligations of Guarantor
hereunder, shall be absolute and unconditional irrespective of:

          (a)  any lack of validity or enforceability of the
Purchase Agreement or any other agreement or instrument relating
thereto;

          (b)  any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from
the Purchase Agreement or any other agreement or instrument
relating thereto;

          (c)  any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations; or

          (d)  any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Guarantor.

     22.  Representations and Warranties.  Guarantor hereby
represents and warrants that:

          (a)  It has the power and authority and the legal right
and capacity to execute and deliver, and to perform its obligations
under, this Agreement and has taken all necessary action to
authorize its execution, delivery and performance of this
Agreement.

          (b)  This Agreement constitutes a legal, valid and
binding obligation of Guarantor enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, general equitable principles and an implied
covenant of good faith and fair dealing.

          (c)  The Pledged Shares have been, or as soon as issued
shall be, duly authorized and validly issued and are, or as soon as
issued shall be, fully paid and non-assessable.

          (d)  Guarantor is, or as soon as issued shall be, the
legal and beneficial owner of the Pledged Collateral free and clear
of any lien, security interest, option or other charge or
encumbrance except for the security interest created by this
Agreement.

          (e)  The pledge of the Pledged Shares pursuant to this
Agreement and the delivery of the certificates representing or
evidencing the Pledged Collateral creates a valid and perfected
first priority security interest in the Pledged Collateral,
securing the payment of the Obligations.

          (f)  The execution, delivery and performance of this
Agreement will not violate any provision of any law or contractual
obligation of Guarantor and will not result in or require
the creation or imposition of any lien on any of the properties or
revenues of Guarantor pursuant to any law or contractual obligation
of the Guarantor.

          (g)  No authorization, approval, or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge by
Guarantor of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by
Guarantor or (ii) for the exercise by RPP of the voting or
other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally).

          (h)  The Pledged Shares constitute, or as soon as issued
shall constitute, one hundred percent (100%) of the issued and
outstanding shares of stock of the Company.

     23.  Notices.  Any notice or other communication to be given
by either party hereunder ("Notice") shall be in writing, and shall
be deemed to be delivered when personally delivered, when deposited
in the U.S. Mail, if sent by certified mail, return receipt
requested, and addressed to the addresses of the parties set forth
in the introductory paragraph of this Agreement or when sent by
facsimile, with confirmation of receipt.  The date of Notice in the
case of Notice given by means other than certified mail, return
receipt requested, shall be the date of receipt by the party
receiving such Notice, and the date of Notice in the event of
Notice sent certified mail, return receipt requested, shall be the
day of depositing same in the mail as evidenced by the postmark
thereon.

     24.  Counterparts.  This Agreement may be executed on any
number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

     25.  Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     26.  Integration.  This Agreement represents the agreement of
Guarantor with respect to the subject matter hereof and there are
no promises or representations by RPP relative to the subject
matter hereof not reflected herein.

     27.  Amendments in Writing; Cumulative Remedies.

          (a)  None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by Guarantor and RPP, provided
that any provision of this Agreement may be waived by RPP in a
letter or agreement executed by RPP or by telex or facsimile
transmission from RPP.

          (b)  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

     28.  Section Headings.  The section headings used in this
Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in
the interpretation hereof.

     29.  Successors and Assigns.  This Agreement shall be binding
upon the successors and assigns of Guarantor and shall inure to the
benefit of RPP and its successors and assigns.

     30.  Defined Terms.  Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in
the Purchase Agreement.

     31.  Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of
Delaware. The Guarantor hereby (i) consents to the personal
jurisdiction of the state and federal courts located in the State
of Delaware in connection with any controversy related to this
Agreement; (ii) waives any argument that venue in any such forum is
not convenient, (iii) agrees that any litigation initiated by RPP
or the Guarantor in connection with this Agreement shall be
venued only in a state or federal court located in the State of
Delaware; and (iv) agrees that a final judgment in any such suit,
action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other
manner provided by law.

     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

                                  "Guarantor"

                                  ______________________________
                                  Theodore R. Upland III

                                  "RPP"

                                  Ridgedale Prints Plus, Inc..
                                  a Minnesota corporation

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

EXHIBIT B

           CERTIFICATE OF DESIGNATION - PREFERRED STOCK

The certificate of designation for the Preferred Stock issued as
part of the purchase price shall include the following terms, to
the extent allowable under the terms of the senior debt:

- Shares shall have an aggregate liquidation and redemption value
  equal to $12,011,000 plus the amount of any accrued but unpaid
  dividends

- No securities with any rights superior to the preferred stock

- Dividends will accrue and be paid annually at the rate of nine
  percent (9%) per year on the liquidation value of the preferred
  stock

- Buyer will be required to redeem shares of preferred stock on or
  before April 5 of each year with a liquidation value (including
  accrued but unpaid dividends) equal to the Buyer's excess cash
  flow from the prior fiscal year (with excess cash flow defined as

  the Buyer's net income after taxes plus amortization and
  depreciation expense from the prior year less an amount equal to
  approved capital expenditures and dividends paid on the preferred

  stock during the prior fiscal year)

- Preferred stock will be non-voting except the holders of the
  preferred shall have the right to elect one director until (a)
  the redemption of shares with an aggregate redemption price of at
  least 90% of the original value of the preferred stock plus
  accrued dividends, and (b) CPI has been relieved from all
  obligations to guarantee Store, office and warehouse leases.

- Holders of Preferred Stock shall have full voting rights  on all
  issues as a separate class in the event of a default in payment
  of dividends, failure to complete redemption or other typical
  default event (specified in detail in the certificate of
  designation, and similar to those in senior loan agreement)

- All outstanding preferred stock shall be redeemed on or before
  April 5, 2012, and the obligation to complete such redemption
  shall be secured by a pledge of Upland's shares of Buyer stock

- Until preferred stock redeemed, restrictions on compensation,
  perquisites and other distributions to Upland

- Until preferred stock redeemed, capital expenditures must be
  approved by the unanimous consent of the Board of Directors,
  except that Buyer may make up to $1.5 million in average annual
  capital expenditures without the unanimous consent of the Board.
  Until preferred stock redeemed, capital expenditures beyond that
  amount or for stores owned or operated by Buyer in excess of 159
  must be approved by the unanimous consent of the Board.

- Upon an initial public offering, a sale of Buyer's assets or
  stock, a merger, liquidation or similar event, the preferred
  stock will be convertible, at the holder's option, into a
  number of shares of common stock equal to the Conversion Ratio
  multiplied by the total number of shares of
  outstanding common stock as of such date, on a fully diluted
  basis after giving effect to all options, warrants or other
  rights to acquire common stock, (other than shares issuable upon
  exercise of employee stock options in an aggregate number not to
  exceed 15% of the total outstanding shares, and other shares
  issued or issuable upon the unanimous consent of the board of
  directors). The Conversion Ratio shall be a fraction, with:

     (i)  a numerator equal to the redemption value of the shares
   of preferred stock being converted plus 2,000,000 less a number
   equal to one-third of the total dividends paid on the preferred
   stock prior to the conversion date, and

     (ii) a denominator equal to the total of the cash paid and the
   liquidation value of the shares of preferred stock issued as
   part of the purchase price, plus 2,000,000.

- Buyer will deliver to holder quarterly financial information and
  any notices of default received from Buyer's senior lender

- Until the preferred stock has been redeemed, holder will have
  full right of inspection of Buyer's records

- So long as the preferred stock is outstanding, and the holder of
  the preferred stock so requests, Buyer will use KPMG as its
  certified public accountants for the annual audit of Buyer's
  financial statements

- No prepayment penalty

- Default under senior loan documents constitutes default under
  preferred stock terms, and triggers early redemption and higher
  dividend rate================================================================================

                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
                                    Depositor

                        OPTION ONE MORTGAGE CORPORATION,
                                 Master Servicer

                                       and

                        WELLS FARGO BANK MINNESOTA, N.A.,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                            Dated as of April 1, 2001

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

                      Option One Mortgage Loan Trust 2001-2

                    Asset-Backed Certificates, Series 2001-2

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page

                                                     ARTICLE I

                                                    DEFINITIONS

<S>                                                                                                            <C>
         Section 1.01.     DEFINED TERMS..........................................................................3
         Section 1.02.     ACCOUNTING............................................................................40
         Section 1.03.     ALLOCATION OF CERTAIN INTEREST SHORTFALLS.............................................40

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01.     CONVEYANCE OF MORTGAGE LOANS..........................................................42
         Section 2.02.     ACCEPTANCE BY TRUSTEE.................................................................45
         Section 2.03.     REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE ORIGINATOR........................46
         Section 2.04.     INTENTIONALLY OMITTED.................................................................49
         Section 2.05.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER......................49
         Section 2.06.     REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.......................................51
         Section 2.07.     ISSUANCE OF CERTIFICATES..............................................................53
         Section 2.08.     CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS...........................................53
         Section 2.09.     CONVEYANCE OF  REMIC REGULAR INTERESTS AND ACCEPTANCE OF REMIC 1
                           BY THE TRUSTEE; ISSUANCE OF CERTIFICATES..............................................56
         Section 2.10.     NEGATIVE COVENANTS OF THE TRUSTEE AND THE MASTER SERVICER.............................56

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         Section 3.01.     MASTER SERVICER TO ACT AS MASTER SERVICER.............................................58
         Section 3.02.     SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
                           SUB-SERVICERS.........................................................................60
         Section 3.03.     SUCCESSOR SUB-SERVICERS...............................................................61
         Section 3.04.     LIABILITY OF THE MASTER SERVICER......................................................61
         Section 3.05.     NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND THE
                           TRUSTEE OR CERTIFICATEHOLDERS.........................................................62
         Section 3.06.     ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY TRUSTEE......................62
         Section 3.07.     COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS..........................................62
         Section 3.08.     SUB-SERVICING ACCOUNTS................................................................63
         Section 3.09.     COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING
                           ACCOUNTS..............................................................................64

                                                         i

<PAGE>

         Section 3.10.     COLLECTION ACCOUNT, INITIAL DEPOSIT ACCOUNT AND DISTRIBUTION ACCOUNT..................64
         Section 3.11.     WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT......................67
         Section 3.12.     INVESTMENT OF FUNDS IN THE INTEREST COVERAGE ACCOUNT, COLLECTION
                           ACCOUNT, INITIAL DEPOSIT ACCOUNT AND THE DISTRIBUTION ACCOUNT.........................69
         Section 3.13.     [Reserved]............................................................................70
         Section 3.14.     MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND
                           FIDELITY COVERAGE.....................................................................70
         Section 3.15.     ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.............................72
         Section 3.16.     REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................73
         Section 3.17.     TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.......................................75
         Section 3.18.     SERVICING COMPENSATION................................................................76
         Section 3.19.     REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.................................77
         Section 3.20.     STATEMENT AS TO COMPLIANCE............................................................77
         Section 3.21.     INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT......................................77
         Section 3.22.     ACCESS TO CERTAIN DOCUMENTATION; FILING OF REPORTS BY TRUSTEE.........................78
         Section 3.23.     TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.....................................79
         Section 3.24.     OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
                           INTEREST SHORTFALLS...................................................................82
         Section 3.25.     [Reserved]............................................................................82
         Section 3.26.     OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE RATES
                           AND MONTHLY PAYMENTS..................................................................82
         Section 3.27.     SOLICITATIONS.........................................................................82
         Section 3.28.     RESERVE FUND..........................................................................83
         Section 3.29.     ADVANCE FACILITY......................................................................84
         Section 3.30.     PMI POLICY; CLAIMS UNDER THE PMI POLICY...............................................85

                                                    ARTICLE IV

                                                   FLOW OF FUNDS

         Section 4.01.     DISTRIBUTIONS.........................................................................86
         Section 4.02.     [RESERVED]............................................................................89
         Section 4.03.     STATEMENTS............................................................................89
         Section 4.04.     REMITTANCE REPORTS; ADVANCES..........................................................92
         Section 4.05.     PRE-FUNDING ACCOUNT...................................................................93
         Section 4.06.     INTEREST COVERAGE ACCOUNT.............................................................95
         Section 4.07.     DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS..........................................96
         Section 4.08.     ALLOCATION OF REALIZED LOSSES.........................................................97

                                                     ARTICLE V

                                                 THE CERTIFICATES

         Section 5.01.     THE CERTIFICATES......................................................................99
         Section 5.02.     REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................99
         Section 5.03.     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES....................................104

                                                        ii

<PAGE>

         Section 5.04.     PERSONS DEEMED OWNERS................................................................105
         Section 5.05.     APPOINTMENT OF PAYING AGENT..........................................................105

                                                    ARTICLE VI

                                       THE MASTER SERVICER AND THE DEPOSITOR

         Section 6.01.     LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR...................................106
         Section 6.02.     MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF
                           THE MASTER SERVICER OR THE DEPOSITOR.................................................106
         Section 6.03.     LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS............................106
         Section 6.04.     MASTER SERVICER NOT TO RESIGN........................................................107
         Section 6.05.     DELEGATION OF DUTIES.................................................................107
         Section 6.06.     [RESERVED]...........................................................................108
         Section 6.07.     INSPECTION...........................................................................108

                                                    ARTICLE VII

                                                      DEFAULT

         Section 7.01.     MASTER SERVICER EVENTS OF TERMINATION................................................109
         Section 7.02.     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.............................................110
         Section 7.03.     WAIVER OF DEFAULTS...................................................................112
         Section 7.04.     NOTIFICATION TO CERTIFICATEHOLDERS...................................................112
         Section 7.05.     SURVIVABILITY OF MASTER SERVICER LIABILITIES.........................................112

                                                   ARTICLE VIII

                                                    THE TRUSTEE

         Section 8.01.     DUTIES OF TRUSTEE....................................................................113
         Section 8.02.     CERTAIN MATTERS AFFECTING THE TRUSTEE................................................114
         Section 8.03.     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS................................115
         Section 8.04.     TRUSTEE MAY OWN CERTIFICATES.........................................................116
         Section 8.05.     TRUSTEE FEE AND EXPENSES.............................................................116
         Section 8.06.     ELIGIBILITY REQUIREMENTS FOR TRUSTEE.................................................117
         Section 8.07.     RESIGNATION OR REMOVAL OF TRUSTEE....................................................117
         Section 8.08.     SUCCESSOR TRUSTEE....................................................................118
         Section 8.09.     MERGER OR CONSOLIDATION OF TRUSTEE...................................................118
         Section 8.10.     APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................118
         Section 8.11.     LIMITATION OF LIABILITY..............................................................120
         Section 8.12.     TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES........................120
         Section 8.13.     SUITS FOR ENFORCEMENT................................................................120
         Section 8.14.     WAIVER OF BOND REQUIREMENT...........................................................121
         Section 8.15.     WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL REQUIREMENT............................121

                                                        iii

<PAGE>

                                                    ARTICLE IX

                                               REMIC ADMINISTRATION

         Section 9.01.     REMIC ADMINISTRATION.................................................................122
         Section 9.02.     PROHIBITED TRANSACTIONS AND ACTIVITIES...............................................123
         Section 9.03.     INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF REMIC
                           STATUS...............................................................................124
         Section 9.04.     [RESERVED]...........................................................................125

                                                     ARTICLE X

                                                    TERMINATION

         Section 10.01.    TERMINATION..........................................................................126
         Section 10.02.    ADDITIONAL TERMINATION REQUIREMENTS..................................................127

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         Section 11.01.    AMENDMENT............................................................................129
         Section 11.02.    RECORDATION OF AGREEMENT; COUNTERPARTS...............................................130
         Section 11.03.    LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................130
         Section 11.04.    GOVERNING LAW; JURISDICTION..........................................................131
         Section 11.05.    NOTICES..............................................................................131
         Section 11.06.    SEVERABILITY OF PROVISIONS...........................................................132
         Section 11.07.    ARTICLE AND SECTION REFERENCES.......................................................132
         Section 11.08.    NOTICE TO THE RATING AGENCIES AND THE NIMS INSURER...................................132
         Section 11.09.    FURTHER ASSURANCES...................................................................133
         Section 11.10.    THIRD PARTY RIGHTS...................................................................133
         Section 11.11.    BENEFITS OF AGREEMENT................................................................133
         Section 11.12.    ACTS OF CERTIFICATEHOLDERS...........................................................133
         Section 11.13     NO PETITION..........................................................................134
</TABLE>

                                       iv

<PAGE>

EXHIBITS:

Exhibit A-1       Form of Class A Certificates
Exhibit A-2       Form of Class M-1 Certificates
Exhibit A-3       Form of Class M-2 Certificates
Exhibit A-4       Form of Class M-3 Certificates
Exhibit A-5       Form of Class C Certificates
Exhibit A-6       Form of Class P Certificates
Exhibit A-7       Form of Class R Certificates
Exhibit B         [Reserved]
Exhibit C         Form of Mortgage Loan Purchase Agreement
Exhibit D         Mortgage Loan Schedule
Exhibit E         Request for Release
Exhibit F-1       Form of Trustee's Initial Certification
Exhibit F-2       Form of Trustee's Final Certification
Exhibit F-3       Form of Receipt of Mortgage Note
Exhibit G         Loss Mitigation Procedures
Exhibit H         Form of Lost Note Affidavit
Exhibit I         [Reserved]
Exhibit J         Form of Investment Letter
Exhibit K         Form of Class R Certificate Transfer Affidavit
Exhibit L         Form of Transferor Certificate
Exhibit M         Form of Liquidation Report
Exhibit N         Form of Subsequent Transfer Instrument
Exhibit O         Form of Addition Notice
Exhibit P         Form of Yield Maintenance Agreement

Schedule I        Prepayment Charge Schedule
Schedule II       PMI Mortgage Loans

                                        v

<PAGE>

         This Pooling and Servicing Agreement is dated as of April 1, 2001 (the
"Agreement"), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as depositor
(the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as master servicer (the
"Master Servicer") and WELLS FARGO BANK MINNESOTA, N.A., as trustee (the
"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. The Certificates will consist of seven classes of
certificates, designated as (i) the Class A Certificates, (ii) the Class M-1
Certificates, (iii) the Class M-2 Certificates, (iv) the Class M-3 Certificates,
(v) the Class P Certificates, (vi) the Class C Certificates and (vii) the Class
R Certificates.

                                     REMIC 1
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Pre-Funding Account,
the Interest Coverage Account, the Reserve Fund, the Initial Deposit Account and
the Yield Maintenance Agreement) as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 1." The Class R-1 Interest will represent the sole
class of "residual interests" in REMIC 1 for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.

<TABLE>
<CAPTION>
                         Uncertificated REMIC 1             Initial Uncertificated             Assumed Final
    Designation             Pass-Through Rate                    Principal Balance           Maturity Date (1)
    -----------             -----------------                    -----------------           -----------------
<S>                      <C>                                <C>                              <C>
       LT1A                   Variable(2)                        $269,499,902.00               June 25, 2031
       LT1B                   Variable(2)                        $  2,475,000.00               June 25, 2031
       LT1C                   Variable(2)                        $    116,880.00               June 25, 2031
       LT1D                   Variable(2)                        $     68,750.00               June 25, 2031
       LT1E                   Variable(2)                        $     55,000.00               June 25, 2031
       LT1F                   Variable(2)                        $  2,784,368.00               June 25, 2031
       LT1P                   Variable(2)                                $100.00               June 25, 2031
</TABLE>

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

<PAGE>

                                     REMIC 2
                                     -------

         As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.

         The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 2 created hereunder:

<TABLE>
<CAPTION>
                                                                    Original Class
                                       Pass-Through              Certificate Principal            Assumed Final
      Class Designation                    Rate                         Balance                  Maturity Date(1)
<S>                                    <C>                       <C>                             <C>
Class A......................          Variable(2)                  $247,500,000.00                June 25, 2031
Class M-1....................          Variable(2)                  $ 11,688,000.00                June 25, 2031
Class M-2....................          Variable(2)                  $  6,875,000.00                June 25, 2031
Class M-3....................          Variable(2)                  $  5,500,000.00                June 25, 2031
Class C......................          Variable(2)                  $  3,436,900.00(3)             June 25, 2031
Class P......................             N/A(4)                            $100.00                June 25, 2031
</TABLE>

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date 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 that
         represents one or more of the "regular interests" in REMIC 2.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class C Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC 1 Regular Interests. The
         Class C Certificates will not accrue interest on their Class
         Certificate Principal Balance.
(4)      The Class P Certificates will not accrue interest.

                                        2

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01.     DEFINED TERMS.

         Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates and the
Mezzanine Certificates shall be made on the basis of the actual number of days
elapsed on the basis of a 360-day year and all other calculations of interest
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months. The Class P Certificates and the Class R Certificates are
not entitled to distributions in respect of interest and, accordingly, will not
accrue interest.

         "1933 Act":  The Securities Act of 1933, as amended.

         "Account":  Either of the Collection Account and Distribution Account.

         "Accrual Period": With respect to the Class A Certificates and the
Mezzanine Certificates and each Distribution Date, the period commencing on the
preceding Distribution Date (or in the case of the first such Accrual Period,
commencing on the Closing Date) and ending on the day preceding the current
Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.

         "Addition Notice": With respect to the transfer of Subsequent Mortgage
Loans to the Trust Fund pursuant to Section 2.08, a notice of the Depositor's
designation of the Subsequent Mortgage Loans to be sold to the Trust Fund and
the aggregate principal balance of such Subsequent Mortgage Loans as of the
Subsequent Cut-off Date. The Addition Notice shall be given not later than three
Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit O.

         "Adjustable Rate Mortgage Loan": A Mortgage Loan which provides at any
period during the life of such loan for the adjustment of the Mortgage Rate
payable in respect thereto. The Adjustable Rate Mortgage Loans are identified as
such on the Mortgage Loan Schedule.

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

         "Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the
first day of the month preceding the month in which

                                        3

<PAGE>

the related Distribution Date occurs minus the sum of (i) the Trustee Fee Rate,
(ii) the Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if applicable.

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

         "Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.04.

         "Advancing Person":  As defined in Section 3.29 hereof.

         "Adverse REMIC Event": As defined in Section 9.01(f) hereof.

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

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

         "Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on any Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from previous Distribution Date.

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

         "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.

         "Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.

         "Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on or prior to the related Determination Date, (b) Liquidation
Proceeds, Insurance Proceeds, Principal Prepayments and other unscheduled
recoveries of principal and interest in respect of the Mortgage Loans received
during the related Prepayment Period, (c) the aggregate of any amounts received
in respect of a related REO

                                        4

<PAGE>

Property withdrawn from any REO Account and deposited in the Collection Account
for such Distribution Date, (d) the aggregate of any amounts deposited in the
Collection Account by the Master Servicer in respect of related Prepayment
Interest Shortfalls for such Distribution Date, (e) the aggregate of any
Advances made by the Master Servicer for such Distribution Date, (f) the
aggregate of any related advances made by the Trustee for such Distribution Date
pursuant to Section 7.02, (g) with respect to the first Distribution Date, the
Initial Deposit, (h) with respect to the Distribution Date immediately following
the end of the Funding Period, any amounts in the Pre- Funding Account
(exclusive of investment income) after giving effect to any purchase of
Subsequent Mortgage Loans, (i) with respect to each Distribution Date during and
the Distribution Date immediately following the Funding Period, any amounts
withdrawn by the Trustee from the Interest Coverage Account for distribution on
the Certificates and (j) the amount of any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount over
(ii) the sum of (a) amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.11(a) or the Trustee pursuant to Section 3.11(b), (b)
amounts deposited in the Collection Account or the Distribution Account pursuant
to clauses (a) through (j) above, as the case may be, in error, (c) the amount
of any Prepayment Charges collected by the Master Servicer in connection with
the full or partial prepayment of any of the Mortgage Loans and any Master
Servicer Prepayment Charge Payment Amount, (d) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05, (e) the PMI Insurer Fee payable
from the Distribution Account and (f) any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05.

         "Balloon Mortgage Loan": A Mortgage Loan that provides for the payment
of the unamortized principal balance of such Mortgage Loan in a single payment
at the maturity of such Mortgage Loan that is substantially greater than the
preceding monthly payment.

         "Balloon Payment": A payment of the unamortized principal balance of a
Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is
substantially greater than the preceding Monthly Payment.

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

         "Basic Principal Distribution Amount": With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Overcollateralization Release Amount, if any, for such
Distribution Date.

         "Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.

         "Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Delaware, the State of New
York, the State of Maryland, the State

                                        5

<PAGE>

of California, the State of Minnesota, the Commonwealth of Pennsylvania 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.

         "Certificate":  Any Regular Certificate or Class R Certificate.

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

         "Certificate Margin": With respect to the Class A Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 0.26% per
annum and (B) after the Optional Termination Date, 0.52% per annum. With respect
to the Class M-1 Certificates on each Distribution Date (A) on or prior to the
Optional Termination Date, 0.65% per annum and (B) after the Optional
Termination Date, 0.975% per annum. With respect to the Class M-2 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
1.05% per annum and (B) after the Optional Termination Date, 1.575% per annum.
With respect to the Class M-3 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 2.00% per annum and (B) after the
Optional Termination Date, 3.00% per annum.

         "Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.

         "Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class C Certificates) immediately prior to any
Distribution Date, will be equal to the Initial Certificate Principal Balance
thereof reduced by the sum of all amounts actually distributed in respect of
principal of such Class and, in the case of a Mezzanine Certificate, Realized
Losses allocated thereto on all prior Distribution Dates. With respect to the
Class C Certificates as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balances of
the REMIC 1 Regular Interests over (B) the then aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding.

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

                                        6

<PAGE>

         "Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.

         "Class A Certificate": Any one of the Class A Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-1, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

         "Class A Certificateholder":  Any Holder of a Class A Certificate.

         "Class A Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 80.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.

         "Class C Certificate": Any one of the Class C Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-5, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

         "Class M-1 Certificate": Any one of the Class M-1 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

         "Class M-1 Principal Distribution Amount": The excess of (x) the sum of
(i) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 88.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.

                                        7

<PAGE>

         "Class M-2 Certificate": Any one of the Class M-2 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

         "Class M-2 Principal Distribution Amount": The excess of (x) the sum of
(i) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 93.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.

         "Class M-3 Certificate": Any one of the Class M-3 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-4, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

         "Class M-3 Principal Distribution Amount": The excess of (x) the sum of
(i) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date) and (iv)
the Certificate Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
97.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.

         "Class P Certificate": Any one of the Class P Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-6, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 2.

                                        8

<PAGE>

         "Class R Certificate": The Class R Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit A-7 and evidencing the ownership of the Class
R-1 Interest and the Class R-2 Interest.

         "Class R-1 Interest":  The uncertificated Residual Interest in REMIC 1.

         "Class R-2 Interest":  The uncertificated Residual Interest in REMIC 2.

         "Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).

         "Closing Date":  April 26, 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 "Wells
Fargo Bank Minnesota, N.A., as Trustee, in trust for registered Holders of
Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates, Series
2001-2," which must be an Eligible Account.

         "Compensating Interest":  As defined in Section 3.24 hereof.

         "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 55479-0113, Attention: Option One Series 2001-2, or at
such other address as the Trustee may designate from time to time by notice to
the Certificateholders, the Depositor, the Master Servicer, the Originator and
the Seller.

         "Corresponding Certificate": With respect to REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E and REMIC 1 Regular Interest LT1P, the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates and Class P Certificates, respectively.

         "Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and any amounts remaining in the
Pre-Funding Account, calculated prior to taking into account payments of
principal on the Mortgage Loans and distribution of the Principal Distribution
Amount to the Holders of the Certificates then entitled to distributions of
principal on such Distribution Date.

         "Custodian": Wells Fargo Bank Minnesota, N.A., as custodian of the
Mortgage Files, and any successor thereto.

                                        9

<PAGE>

         "Cut-off Date": With respect to each Initial Mortgage Loan, the later
of (i) the date of origination of such Mortgage Loan or (ii) April 1, 2001.

         "Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (or as of the
applicable date of substitution with respect to a Qualified Substitute Mortgage
Loan).

         "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 5.02(c) hereof.

         "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.

          "Delinquency Master Servicer Termination Trigger": A Delinquency
Master Servicer Termination Trigger will have occurred with respect to the
Certificates on a Distribution Date if the Three Month Rolling Average
Delinquency Percentage for the Mortgage Loans exceeds 18.00%.

         "Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Principal Balance of Mortgage Loans
Delinquent 60 days or more by (y) the aggregate Principal Balance of the
Mortgage Loans, in each case, as of the last day of the previous calendar month.

         "Delinquent": Any Mortgage Loan, the Monthly Payment due on a Due Date
which is not made by the Close of Business on the next scheduled Due Date for
such Mortgage Loan. For example, a Mortgage Loan is 60 or more days Delinquent
if the Monthly Payment due on a Due Date is not made by the Close of Business on
the second scheduled Due Date after such Due Date.

         "Depositor": Option One Mortgage Acceptance Corporation, a Delaware
corporation, or any successor in interest.

         "Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. 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.

                                       10

<PAGE>

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

         "Determination Date": With respect to any 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 preceding 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 the REMIC other than through an
Independent Contractor; provided, however, that the Trustee (or the Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master Servicer on behalf of
the Trustee) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.

         "Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code,
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code or (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in the Class R Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or of
any state or political subdivision thereof, if all of its activities are subject
to tax and, a majority of its board of directors is not selected by a
governmental unit. The term "United States", "state" and "international
organizations" shall have the meanings set forth in Section 7701 of the Code.

         "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Wells Fargo Bank Minnesota, N.A., as Trustee, in trust
for the registered Certificateholders of Option One Mortgage Loan Trust 2001-2,
Asset-Backed Certificates, Series 2001-2" and which must be an Eligible Account.

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

                                       11

<PAGE>

         "Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due (or, in the case of
any Mortgage Loan under the terms of which the Monthly Payment for such Mortgage
Loan was due on a day other than the first day of the calendar month in which
such Distribution Date occurs, the day during the related Due Period on which
such Monthly Payment was due), exclusive of any days of grace.

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

         "Eligible Account": 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 (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated P-1 by Moody's, F-1 by Fitch or A-1 by S&P (or comparable ratings if
Moody's, Fitch and S&P are not the Rating Agencies) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the NIMs Insurer, the Trustee
and to each Rating Agency, the Certificateholders will have a claim with respect
to the funds in such account or a perfected first priority security interest
against such collateral (which shall be limited to Permitted Investments)
securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained,
(iii) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution, national banking association
or trust company acting in its fiduciary capacity or (iv) an account otherwise
acceptable to each Rating Agency without reduction or withdrawal of their then
current ratings of the Certificates as evidenced by a letter from each Rating
Agency to the Trustee and the NIMs Insurer. Eligible Accounts may bear interest.

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

         "Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.

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

         "Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on such Distribution Date over (ii) the Overcollateralization Target
Amount for such Distribution Date.

         "Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the
Class C Certificates on such

                                       12

<PAGE>

Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.08 and (y) the
Overcollateralization Deficiency Amount for such Distribution Date.

         "Fannie Mae": Federal National Mortgage Association or any successor
thereto.

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

         "Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Originator or the Master Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Master Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Master Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The Master
Servicer shall maintain records, prepared by a Servicing Officer, of each Final
Recovery Determination made thereby.

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

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

         "Foreclosure Price": The amount reasonably expected to be received from
the sale of the related Mortgaged Property net of any expenses associated with
foreclosure proceedings.

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

         "Freddie Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.

         "Funding Period": The period beginning on the Closing Date and ending
on the earlier to occur of the date upon which (a) the amount on deposit in the
Pre-Funding Account (exclusive of investment income) has been reduced to zero or
(b) June 13, 2001.

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

         "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 or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or 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

                                       13

<PAGE>

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

         "Indenture": An indenture relating to the issuance of notes guaranteed
by the NIMs Insurer.

         "Index": With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.

         "Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.

         "Initial Deposit": $37,021 in cash to be deposited by the Depositor
with the Trustee for deposit into the Initial Deposit Account on or before the
Closing Date, relating to Closing Date Mortgage Loans having a first Due Date in
the Due Period relating to the Distribution Date in June 2001.

         "Initial Deposit Account": The Initial Deposit Account established in
accordance with Section 3.10(b) hereof and maintained by the Trustee, which
shall be entitled "Wells Fargo Bank Minnesota, National Association, as Trustee,
in trust for registered Holders of Option One Mortgage Loan Trust 2001-2,
Asset-Backed Certificates, Series 2001-2 Initial Deposit Account", which must be
an Eligible Account.

         "Initial Mortgage Loan": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date. The aggregate principal balance of the
Initial Mortgage Loans as of the Cut-off Date is equal to $220,469,988.89.

         "Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan (including any related PMI
Policy), to the extent such proceeds are received by the Master Servicer and are
not to be applied to the restoration of the related Mortgaged

                                       14

<PAGE>

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 Coverage Account": The account established and maintained
pursuant to Section 4.06 , as defined therein.

         "Interest Coverage Amount": The amount to be paid by the Depositor to
the Trustee for deposit in the Interest Coverage Account on the Closing Date
pursuant to Section 4.06, which amount is $437,129.

         "Interest Determination Date": With respect to the Class A Certificates
and the Mezzanine Certificates and each Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period.

         "Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Funds for such Distribution Date allocable to
interest.

         "Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
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 on a
contractual basis for such Due Period and not previously recovered.

         "LIBOR": With respect to each Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
London interbank offered rate for one-month United States dollar deposits, as
such rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date. If such rate does not appear on Telerate Page
3750, the rate for such Interest Determination Date will be determined on the
basis of the offered rates of the Reference Banks for one-month United States
dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination
Date. The Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. On such Interest
Determination Date, LIBOR for the related Accrual Period will be established by
the Trustee as follows:

                  (i) If on such Interest Determination Date two or more
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the arithmetic mean of such offered quotations
         (rounded upwards if necessary to the nearest whole multiple of 1/16 of
         1%); and

                  (ii) If on such Interest Determination Date fewer than two
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the higher of (i) LIBOR as determined on the
         previous Interest Determination Date and (ii) the Reserve Interest
         Rate.

                                       15

<PAGE>

         "LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.

         "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been 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 the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. 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 the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.

         "Liquidation Proceeds": The amount (other than 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 by means of 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 3.23 or Section 10.01.

         "Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Principal
Balance of the Mortgage Loan (and, with respect to any second lien Mortgage
Loan, the Principal Balance of the related first lien Mortgage Loan plus the
Principal Balance of such second lien Mortgage Loan), and the denominator of
which is the Value of the related Mortgaged Property.

         "Losses":  As defined in Section 9.03.

         "Loss Mitigation Procedures": The policies and procedures set forth in
Exhibit G hereto relating to the realization on delinquent Mortgage Loans.

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

         "Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.

                                       16

<PAGE>

         "Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E and REMIC 1 Regular Interest LT1F, with the rate on REMIC
1 Regular Interest LT1B subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class A Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; with the rate on REMIC 1 Regular Interest
LT1C subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-1 Certificates and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest LT1D
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-2 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation; with the rate on REMIC 1 Regular Interest LT1E subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-3
Certificates and (ii) the Maximum Cap Rate for the purpose of this calculation
and with the rate on REMIC 1 Regular Interest LT1F subject to a cap of zero for
the purpose of this calculation.

         "Master Servicer": Option One Mortgage Corporation, a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Master Servicer hereunder.

         "Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer or which is 50% or more owned by
the Master Servicer and (ii) which is qualified to service residential mortgage
loans.

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

         "Master Servicer Optional Purchase Delinquency Trigger": A Master
Servicer Optional Purchase Delinquency Trigger has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds 75.00% of the Credit
Enhancement Percentage.

         "Master Servicer Prepayment Charge Payment Amount": The amounts payable
by the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.05 or Section 3.01.

         "Master Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.

         "Maximum Cap Rate": For any Distribution Date a per annum rate equal to
the product of (x) the weighted average of the Adjusted Net Maximum Mortgage
Rates of the Mortgage Loans, weighted on the basis of the Stated Principal
Balances thereof as of the Determination Date preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.

         "Maximum LT1F Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1F for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1F minus the REMIC 1

                                       17

<PAGE>

Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1B with the rate
on REMIC 1 Regular Interest LT1B subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class A Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation, Uncertificated Accrued
Interest on REMIC 1 Regular Interest LT1C with the rate on REMIC 1 Regular
Interest LT1C subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-1 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation, Uncertificated Accrued Interest on REMIC 1
Regular Interest LT1D with the rate on REMIC 1 Regular Interest LT1D subject to
a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class
M-2 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation and Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1E
with the rate on REMIC 1 Regular Interest LT1E subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-3 Certificates
and (ii) the Maximum Cap Rate for the purpose of this calculation for such
Distribution Date.

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

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

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

         "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates, the Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, reduced by any Net
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls and in the
case of the Class C Certificates, amounts payable to the PMI Insurer pursuant to
Section 4.01(d)(ix) (allocated to such Certificate based on its respective
entitlements to interest irrespective of any Net Prepayment Interest Shortfalls
and Relief Act Interest Shortfalls for such Distribution Date).

         "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 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

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

                                       18

<PAGE>

         "Mortgage": The mortgage, deed of trust or other instrument creating a
first lien or second lien on, or first or second 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, Section 2.03(d) or Section 2.08 as from time
to time held as a part of the Trust Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.

         "Mortgage Loan Purchase Agreement": The agreement among the Master
Servicer, in its capacity as Originator, the Seller and the Depositor, regarding
the transfer of the Mortgage Loans by the Seller to or at the direction of the
Depositor, substantially in the form attached hereto as Exhibit C.

         "Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, attached hereto as Exhibit D, as supplemented
by each schedule of Subsequent Mortgage Loans attached to a Subsequent Transfer
Instrument. The Mortgage Loan Schedule shall be prepared by the Originator and
shall set forth the following information with respect to each Mortgage Loan, as
applicable:

                  (1) the Mortgage Loan identifying number;

                  (2) the Mortgagor's name;

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

                  (4) a code indicating whether the Mortgaged Property was
         represented by the borrower, at the time of origination, as being
         owner-occupied;

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

                  (6) the original months to maturity;

                  (7) the stated remaining months to maturity from the Cut-off
         Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
         Loan) based on the original amortization schedule;

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

                  (9) the Mortgage Rate in effect immediately following the
         Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent
         Mortgage Loan);

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

                                       19

<PAGE>

                  (11) the stated maturity date;

                  (12) the amount of the Monthly Payment at origination;

                  (13) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date (or Subsequent Cut-off Date, with respect
         to a Subsequent Mortgage Loan);

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

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

                  (16) the Stated Principal Balance of the Mortgage Loan as of
         the Close of Business on the Cut-off Date (or Subsequent Cut-off Date,
         with respect to a Subsequent Mortgage Loan);

                  (17) a code indicating the purpose of the Mortgage Loan (I.E.,
         purchase financing, rate/term refinancing, cash-out refinancing);

                  (18) the Mortgage Rate at origination;

                  (19) a code indicating the documentation program (I.E., full
         documentation, limited documentation, stated income documentation);

                  (20) the risk grade;

                  (21) the Value of the Mortgaged Property;

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

                  (23) the actual unpaid principal balance of the Mortgage Loan
         as of the Cut-off Date (or Subsequent Cut-off Date, with respect to a
         Subsequent Mortgage Loan);

                  (24) the type and term of the related Prepayment Charge;

                  (25) the rounding code;

                  (26) the program code;

                  (27) a code indicating the lien priority for Mortgage Loans;

                  (28) with respect to each Adjustable Rate Mortgage Loan, the
         Minimum Mortgage Rate;

                  (29) with respect to each Adjustable Rate Mortgage Loan, the
         Maximum Mortgage Rate;

                                       20

<PAGE>

                  (30) with respect to each Adjustable Rate Mortgage Loan, the
         Gross Margin;

                  (31) with respect to each Adjustable Rate Mortgage Loan, the
         next Adjustment Date;

                  (32) with respect to each Adjustable Rate Mortgage Loan, the
         Periodic Rate Cap;

                  (33) whether such Mortgage Loan is covered under the PMI
         Policy; and

                  (34) the credit score ("FICO") of such Mortgage Loan.

         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 (or
Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan): (1) the
number of Mortgage Loans (separately identifying the number of Fixed-Rate
Mortgage Loans and the number of Adjustable-Rate Mortgage Loans); (2) the
current Principal Balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans and (4) the weighted average maturity of the
Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by
the Originator 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
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

         "Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof and as
supplemented by any Subsequent Mortgage Loans identified on each schedule of
Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument.

         "Mortgage Rate": With respect to each Fixed Rate Mortgage Loan, the
rate set forth in the related Mortgage Note. With respect to each Adjustable
Rate 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 (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan) shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off Date
(or Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan) and (B)
as of any date of determination thereafter shall be the rate as adjusted on the
most recent Adjustment Date, to equal the sum, rounded to the next highest or
nearest 0.125% (as provided in the Mortgage Note), of the Index, determined as
set forth in the related Mortgage Note, plus the related Gross Margin subject to
the limitations set forth in the related Mortgage Note. 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.

                                       21

<PAGE>

         "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 Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid servicing fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property.

         "Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Available Funds for such Distribution Date over
(y) the sum for such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.

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

         "Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.

         "Net WAC Rate": With respect to each Distribution Date, a per annum
rate equal to the product of (i) the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the Determination Date preceding the month of
such Distribution Date and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.

         "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest payable to such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest payable on such Class of Certificates at
the Net WAC Rate for such Distribution Date and (B) the related Net WAC Rate
Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related Formula Rate for
such Class of Certificates for such Distribution Date.

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

         "NIMs Insurer": Any insurer that is guaranteeing certain payments under
notes issued by a trust, the principal assets of which include the Class C
Certificates, the Class P Certificates and the Class R Certificates.

                                       22

<PAGE>

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

         "Notional Amount": Immediately prior to any Distribution Date, with
respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests.

         "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 Master Servicer, the
Originator or the Depositor, as applicable.

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

         "Optional Termination Date": The first Distribution Date on which the
Master Servicer or the NIMs Insurer may opt to terminate the Trust Fund pursuant
to Section 10.01.

         "Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Certificates and
the Class P Certificates, the corresponding amounts set forth opposite such
Class above in the Preliminary Statement.

         "Original Notional Amount": With respect to the Class C Certificates,
$275,000,000.

         "Original Pre-Funded Amount": The amount deposited by the Depositor in
the Pre-Funding Account on the Closing Date, which amount is $54,530,011.11.

         "Originator": Option One Mortgage Corporation, a California
corporation, or its successor in interest, in its capacity as originator under
the Mortgage Loan Purchase Agreement.

         "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Basic Principal Distribution
Amount on such Distribution Date).

         "Overcollateralization Floor": $1,375,000.

         "Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.

                                       23

<PAGE>

         "Overcollateralization Target Amount": With respect to any Distribution
Date (i) prior to the Stepdown Date, $3,436,900, (ii) on or after the Stepdown
Date provided a Trigger Event is not in effect, the greater of (x) 2.50% of the
aggregate Stated Principal Balance of the Mortgage Loans, after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period and (y) the Overcollateralization Floor, and (iii)
on or after the Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Distribution
Date.

         "Overcollateralized Amount": For any Distribution Date, the amount,
equal to (i) the Pool Balance (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and the amounts remaining in the Pre-Funding Account as of the related
Determination Date minus (ii) the sum of the aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates as of such Distribution Date after giving effect to distributions
to be made on such Distribution Date.

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

         "Pass-Through Rate":

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

         With respect to the Class C Certificates and any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(G) below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular
Interest LT1P. For purposes of calculating the Pass-Through Rate for the Class C
Certificates, the numerator is equal to the sum of the following components:

                  (A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A;

                  (B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B;

                                       24

<PAGE>

                  (C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1C minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C;

                  (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1D minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D;

                  (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1E minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E;

                  (F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1F minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1F; and

                  (G) 100% of the interest on REMIC 1 Regular Interest LT1P.

         "Paying Agent":  Any paying agent appointed pursuant to Section 5.05.

         "Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Class R Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; PROVIDED, HOWEVER, that the sum of all such
percentages for each such Class totals 100%.

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

         "Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the NIMs
Insurer, the Trustee or any of their respective Affiliates or for which an
Affiliate of the NIMs Insurer or Trustee serves as an advisor:

                  (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) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject

                                       25

<PAGE>

         to supervision and examination by federal and/or state authorities, so
         long as, at the time of such investment or contractual commitment
         providing for such investment, such depository institution or trust
         company (or, if the only Rating Agency is S&P, in the case of the
         principal depository institution in a depository institution holding
         company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in one of the two highest available ratings of Fitch and the highest
         available rating category of Moody's and S&P and provided that each
         such investment has an original maturity of no more than 365 days; and
         provided further that, if the only Rating Agency is S&P and if the
         depository or trust company is a principal subsidiary of a bank holding
         company and the debt obligations of such subsidiary are not separately
         rated, the applicable rating shall be that of the bank holding company;
         and, provided further that, if the original maturity of such short-term
         obligations of a domestic branch of a foreign depository institution or
         trust company shall exceed 30 days, the short-term rating of such
         institution shall be A-1+ in the case of S&P if S&P is the Rating
         Agency; and (B) any other demand or time deposit or deposit which is
         fully insured by the FDIC;

                  (iii) repurchase obligations with a term not to exceed 30 days
         with respect to any security described in clause (i) above and entered
         into with a depository institution or trust company (acting as
         principal) rated F-1+ or higher by Fitch, rated A-1+ or higher by S&P
         and rated A2 or higher by Moody's, provided, however, that collateral
         transferred pursuant to such repurchase obligation must be of the type
         described in clause (i) above and must (A) be valued daily at current
         market prices plus accrued interest, (B) pursuant to such valuation, be
         equal, at all times, to 105% of the cash transferred by the Trustee in
         exchange for such collateral and (C) be delivered to the Trustee or, if
         the Trustee is supplying the collateral, an agent for the Trustee, in
         such a manner as to accomplish perfection of a security interest in the
         collateral by possession of certificated securities;

                  (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 a 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 a Rating Agency in its highest
         short-term unsecured debt rating available at the time of such
         investment;

                  (vi) units of money market funds, including those managed or
         advised by the Trustee or its Affiliates, that have been rated "AAA" by
         Fitch (if rated by Fitch), "AAA" by S&P and "Aaa" by Moody's; 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 the Rating Agencies in
         writing as a permitted investment of funds backing securities having
         ratings equivalent to its highest initial rating of the Class A
         Certificates;

                                       26

<PAGE>

provided, 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 a non-U.S. Person.

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

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

         "PMI Insurer": Radian Guaranty Inc., a Pennsylvania corporation, or its
successors in interest.

         "PMI Insurer Fee": The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal one twelfth of the product of (i)
the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Stated Principal
Balance of the PMI Mortgage Loans and any related REO Properties as of the first
day of the related Due Period.

         "PMI Insurer Fee Rate": 0.80% per annum.

         "PMI Mortgage Loans": The list of Mortgage Loans insured by the PMI
Insurer attached hereto as Schedule II.

         "PMI Policy": The Primary Mortgage Insurance Policy No. 46300 (policy
reference number: 01-889022) with respect to the PMI Mortgage Loans, including
all endorsements thereto dated the Closing Date, issued by the PMI Insurer and
the Commitment Letter, dated April 19, 2001, between the PMI Insurer and the
Originator.

         "Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans as of such date.

         "Pre-Funding Account": The account established and maintained pursuant
to Section 4.05, as defined herein.

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

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         "Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).

         "Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges on the Mortgage Loans included in the Trust Fund on such date, attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto).
The Prepayment Charge Schedule shall be prepared by the Master Servicer (in its
capacity as Originator) and set forth the following information with respect to
each Prepayment Charge:

                (i)        the Mortgage Loan identifying number;

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

              (iii)        the state of origination of the related Mortgage
                           Loan;

               (iv)        the date on which the first monthly payment was due
                           on the related Mortgage Loan;

                (v)        the term of the related Prepayment Charge; and

               (vi)        the principal balance of the related Mortgage Loan as
                           of the Cut-off Date (or Subsequent Cut-off Date, with
                           respect to a Subsequent Mortgage Loan).

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

         "Prepayment Interest Excess": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day and the Determination Date of the calendar month in which such Distribution
Date occurs, an amount equal to interest (to the extent received) at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the first day of the calendar month in which such
Distribution Date occurs and ending on the date on which such prepayment is so
applied.

         "Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding the month
in which such Distribution Date occurs. The obligations of the Master Servicer
in respect of any Prepayment Interest Shortfall are set forth in Section 3.24.

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<PAGE>

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

         "Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, MINUS
all collections credited against the Principal Balance of any such Mortgage
Loan. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the related
Mortgage Loan as of the final recovery of related Liquidation Proceeds and a
Principal Balance of zero thereafter. As to any REO Property and any day, the
Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.

         "Principal Distribution Amount": With respect to any Distribution Date,
an amount equal to the sum of the Basic Principal Distribution Amount plus the
Extra Principal Distribution Amount.

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

         "Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) the principal portion of all partial and full principal prepayments
of the Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all related Net Liquidation
Proceeds and Insurance Proceeds received during such Prepayment Period, (iv)
that portion of the Purchase Price, representing principal of any repurchased
Mortgage Loan, deposited to the Collection Account during such Prepayment
Period, (v) the principal portion of any related Substitution Adjustments
deposited in the Collection Account during such Prepayment Period, (vi) in the
case of the Distribution Date immediately following the end of the Funding
Period, any amount remaining in the Pre-Funding Account not used by the Trustee
to purchase Subsequent Mortgage Loans and (vii) on the Distribution Date on
which the Trust Fund is to be terminated pursuant to Section 10.01, that portion
of the Termination Price, in respect of principal.

         "Prospectus Supplement": That certain Prospectus Supplement dated April
23, 2001 relating to the public offering of the Class A Certificates and the
Mezzanine Certificates.

         "Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, 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 Principal Balance thereof as of
the date of purchase (or such other price as provided in Section 10.01), (ii) in
the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at
the applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered

                                       29

<PAGE>

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
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Master Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section 4.04, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.23 and (v) in the case of a Mortgage Loan required to be purchased pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the Master
Servicer, the NIMs Insurer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.

         "Qualified Insurer": Any insurance company acceptable to Fannie Mae.

         "Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance (or in the case of a substitution of more than
one mortgage loan for a Deleted Mortgage Loan, an aggregate 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, and not more than 5%
less than, the outstanding 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) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) if the Qualified Substitute Mortgage Loan is an Adjustable
Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (v) if the Qualified Substitute
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Gross Margin equal to
or greater than the Gross Margin of the Deleted Mortgage Loan, (vi) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (viii) be current as of the date of substitution, (ix) 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, (x) have a
risk grading determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xi) have been underwritten or
reunderwritten by the Originator in accordance with the same underwriting
criteria and guidelines as the Deleted Mortgage Loan, (xii) be covered by the
PMI Policy if the Deleted Mortgage Loan was covered by the PMI Policy, (xiii)
have a Prepayment Charge provision at least equal to the Prepayment Charge
provision of the Deleted Mortgage Loan and (xiv) conform to each representation
and warranty set forth in Section

                                       30

<PAGE>

3.01 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 clauses (ii) through (vi) hereof shall be satisfied for each such
mortgage loan, the risk gradings described in clause (x) hereof shall be
satisfied as to each such mortgage loan, the terms described in clause (vii)
hereof shall be determined on the basis of weighted average remaining term to
maturity (provided that no such mortgage loan may have a remaining term to
maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.

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

         "Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan.

         "Record Date": With respect to (i) the Class P Certificates, the Class
C Certificates and the Class R Certificates, the Close of Business on the last
Business Day of the calendar month preceding the month in which the related
Distribution Date occurs and (ii) with respect to the Class A Certificates and
the Mezzanine Certificates, the Close of Business on the Business Day
immediately preceding the related Distribution Date; PROVIDED, HOWEVER, that
following the date on which Definitive Certificates for a Class A Certificate or
a Mezzanine Certificate are available pursuant to Section 5.02, the Record Date
for such Certificates shall be the last Business Day of the calendar month
preceding the month in which the related Distribution Date occurs.

         "Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor, the Originator or the Master Servicer or any
affiliate thereof and (iii) which have been designated as such by the Depositor;
PROVIDED, HOWEVER, that if fewer than two of such banks provide a LIBOR rate,
then any leading banks selected by the Depositor which are engaged in
transactions in United States dollar deposits in the international Eurocurrency
market.

         "Regular Certificate": Any of the Class A Certificates, Mezzanine
Certificates, Class C Certificates or Class P Certificates.

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

         "Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which

                                       31

<PAGE>

(i) interest collectible on such Mortgage Loan during such Due Period is less
than (ii) one month's interest on the Principal Balance of such Mortgage Loan at
the Loan Rate for such Mortgage Loan before giving effect to the application of
the Relief Act.

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

         "REMIC 1": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made consisting of: (i) such Mortgage Loans
as from time to time are subject to this Agreement, together with the Mortgage
Files relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property, together with all collections thereon and
proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage Loans
under all insurance policies, including the PMI Policy, required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection Account, the
Distribution Account (subject to the last sentence of this definition) and any
REO Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, a REMIC election
will not be made with respect to the Interest Coverage Account, Pre-Funding
Account, the Reserve Fund or the Yield Maintenance Agreement.

         "REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre-Funding Account and (ii)
the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest LT1A
minus the Marker Rate, divided by (b) 12.

         "REMIC 1 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.

         "REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
LT1C, REMIC 1 Regular Interest LT1D and REMIC 1 Regular Interest LT1E, in each
case as of such date of determination.

         "REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre-Funding Account and (ii) 1
minus a fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D and REMIC 1 Regular
Interest LT1E and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E and REMIC 1 Regular Interest LT1F.

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<PAGE>

         "REMIC 1 Regular Interest LT1A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1C": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1D": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1E": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1F": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1F shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT1P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall accrue interest
at the related Uncertificated REMIC 1

                                       33

<PAGE>

Pass-Through Rate in effect from time to time, and shall be entitled to any
amounts distributed to REMIC 1 Regular Interest LT1P.

         "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1
Regular Interest LT1P.

         "REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificate (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

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

         "REMIC Regular Interests": The REMIC 1 Regular Interests.

         "Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee and the NIMs Insurer pursuant to Section 4.04.

         "Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.

         "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 the Trust Fund.

         "REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the 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 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 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 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such

                                       34

<PAGE>

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, in the
form of Exhibit E attached hereto.

         "Reserve Fund": The reserve fund established and maintained pursuant to
Section 3.28.

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

         "Residential Dwelling": Any one of the following: (i) a 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, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.

         "Residual Certificate":  The Class R Certificates.

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

         "Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, any vice president, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
the Cashier, any assistant cashier, any trust officer or assistant trust
officer, the Controller and any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and, with respect to a particular matter, to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.

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

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<PAGE>

         "Seller": Any one or all of: (i) Option One Mortgage Corporation, a
California corporation or (ii) Option One Owner Trust 2001-1A, Option One Owner
Trust 2001-1B and Option One Owner Trust 2001-2, each a Delaware business trust.

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

         "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Master Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property and (iv) compliance with the obligations under
Sections 3.01, 3.09, 3.16, and 3.23.

         "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 or in part
made by the Mortgagor during such calendar month, interest for the number of
days covered by such payment of interest) at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

         "Servicing Fee Rate":  0.50% per annum.

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

         "Servicing Standard": Shall mean the standards set forth in Section
3.01.

         "Servicing Transfer Costs": Shall mean all reasonable costs and
expenses incurred by the Trustee in connection with the transfer of servicing
from a predecessor servicer, including, without limitation, any reasonable 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.

         "Startup Day": As defined in Section 9.01(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 outstanding principal balance of such Mortgage
Loan as of the Cut-off Date (or Subsequent Cut-off Date, as applicable), 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 (or
Subsequent Cut-off Date, as applicable), to the extent received from the
Mortgagor or advanced by the Master Servicer

                                       36

<PAGE>

and distributed pursuant to Section 4.01 on or before such date of
determination, (ii) all Principal Prepayments received after the Cut-off Date
(or Subsequent Cut-off Date, as applicable), to the extent distributed pursuant
to Section 4.01 on or before such date of determination, (iii) all Liquidation
Proceeds and Insurance Proceeds 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 Due 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 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.

         "Stepdown Date": The earlier to occur of (a) the Distribution Date on
which the Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (b) the later to occur of (i) the Distribution Date
occurring in May 2004 and (ii) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account payments of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 20.00%.

         "Subsequent Cut-off Date": With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
later of (i) first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.

         "Subsequent Mortgage Loan": A Mortgage Loan sold by the Depositor to
the Trust Fund pursuant to Section 2.08, such Mortgage Loan being identified on
the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.

         "Subsequent Mortgage Loan Purchase Agreement": The agreement among the
Depositor, the Originator and the Seller, regarding the transfer of the
Subsequent Mortgage Loans by the Seller to the Depositor.

         "Subsequent Transfer Date": With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.

         "Subsequent Transfer Instrument": Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee and the
Depositor substantially in the form

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<PAGE>

attached hereto as Exhibit N, by which Subsequent Mortgage Loans are transferred
to the Trust Fund.

         "Sub-Servicer": Any Person with which either 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 applicable Master Servicer.

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

         "Substitution Adjustment":  As defined in Section 2.03(d) hereof.

         "Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.

         "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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

         "Termination Price":  As defined in Section 10.01(a) hereof.

         "Three Month Rolling Average Delinquency Percentage": With respect to
the Mortgage Loans and any Distribution Date, the fraction, expressed as a
percentage, the numerator of which is (x) the sum (without duplication) of the
aggregate of the Principal Balances of all Mortgage Loans that are (i) 60 or
more days Delinquent, (ii) in bankruptcy and 60 or more days Delinquent, (iii)
in foreclosure and 60 or more days Delinquent or (iv) REO Properties, and the
denominator of which is (y) the sum of the Principal Balances of the Mortgage
Loans, in the case of both (x) and (y), as of the Close of Business on the last
Business Day of each of the three most recent calendar months.

         "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds 85.00% of the Credit
Enhancement Percentage.

         "Trust": Option One Mortgage Loan Trust 2001-2, the trust created
hereunder.

         "Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1 and REMIC 2, the Interest Coverage
Account, the Pre-Funding Account, the Reserve Fund, the Initial Deposit Account
and the Yield Maintenance Agreement.

         "Trustee": Wells Fargo Bank Minnesota, N.A., a national banking
association, or any successor trustee appointed as herein provided.

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<PAGE>

         "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, which amount shall equal
one twelfth of the product of (i) the Trustee Fee Rate, multiplied by (ii) the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
and any amount in the Pre-Funding Account as of the first day of the calendar
month prior to the month of such Distribution Date (or, in the case of the
initial Distribution Date, as of the Cut-off Date).

         "Trustee Fee Rate":  0.0065% per annum.

         "Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC Regular Interests based on
their respective entitlements to interest irrespective of any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date).

         "Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate.

         "Uncertificated Principal Balance": With respect to each REMIC Regular
Interest the amount of such REMIC Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC Regular Interest shall equal the amount set forth in the Preliminary
Statement hereto as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC Regular
Interest shall be reduced by all distributions of principal made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.08 and, if and
to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08, and the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1F shall be
increased by interest deferrals as provided in Section 4.08. The Uncertificated
Principal Balance of each REMIC Regular Interest that has an Uncertificated
Principal Balance shall never be less than zero.

         "Uncertificated REMIC 1 Pass-Through Rate": For any Distribution Date
other than the Distribution Dates in May 2001 and June 2001, the Adjusted Net
Mortgage Rate for such Distribution Date. With respect to the Distribution Date
in May 2001 and June 2001, 8.6399483941% per annum.

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

         "United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided

                                       39

<PAGE>

in Treasury regulations) provided that, for purposes solely of the restrictions
on the transfer of Class R Certificates, no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate the income of
which from sources without the United States is includible 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, 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 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 or successor
provisions.

         "Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class
for the related Accrual Period.

         "Value": With respect to any Mortgage Loan, and the related Mortgaged
Property, the lesser of:

                  (i)      the lesser of (a) the value thereof as determined by
                           an appraisal made for the originator of the Mortgage
                           Loan at the time of origination of the Mortgage Loan
                           by an appraiser who met the minimum requirements of
                           Fannie Mae and Freddie Mac, and (b) the value thereof
                           as determined by a review appraisal conducted by the
                           Originator in the event any such review appraisal
                           determines an appraised value more than 10% lower
                           than the value thereof, in the case of a Mortgaged
                           Loan with a Loan-to-Value Ratio less than or equal to
                           80%, or more than 5% lower than the value thereof, in
                           the case of a Mortgage Loan with a Loan-to-Value
                           Ratio greater than 80%, as determined by the
                           appraisal referred to in clause (i)(a) above; and

                  (ii)     the purchase price paid for the related Mortgaged
                           Property by the Mortgagor with the proceeds of the
                           Mortgage Loan; provided, however, that in the case of
                           a refinanced Mortgage Loan (which is a Mortgage Loan
                           the proceeds of which were not used to purchase the
                           related Mortgaged Property) or a Mortgage Loan
                           originated in connection with a "lease option
                           purchase" if the "lease option purchase price" was
                           set 12 months or more prior to origination, such
                           value of the Mortgaged Property is based solely upon
                           clause (i) above.

         "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class

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<PAGE>

C Certificates shall have 98% of the Voting Rights (allocated among the Holders
of the Class A Certificates, the Mezzanine Certificates and the Class C
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates), the Class P Certificates shall have
1% of the Voting Rights and the Class R Certificates shall have 1% of the Voting
Rights. The Voting Rights allocated to any Class of Certificates (other than the
Class P Certificates and the Class R Certificates) shall be allocated among all
Holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates and the Voting Rights allocated to the
Class P Certificates and the Class R Certificates shall be allocated among all
Holders of each such Class in proportion to such Holders' respective Percentage
Interest; PROVIDED, HOWEVER that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Class R Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class.

         "Yield Maintenance Agreement": The yield maintenance agreement between
the Trustee and the counterparty thereunder, a form of which is attached hereto
as Exhibit P.

         Section 1.02.     ACCOUNTING.

         Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.

         Section 1.03.     ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

         For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the aggregate amount
of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate and, thereafter, among the
Class A Certificates and the Mezzanine Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance of each such
Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate
Carryover Amounts incurred for any Distribution Date shall be allocated among
the Class C Certificates on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable Pass-Through Rate on the Notional Amount
of each such Certificate.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1F up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LT1A, REMIC
1 Regular Interest LT1B, REMIC 1

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<PAGE>

Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E and REMIC 1 Regular Interest LT1F PRO RATA based on, and to the extent of,
one month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC 1 Regular Interest.

         Section 1.04.     RIGHTS OF THE NIMS INSURER.

         Each of the rights of the NIMs Insurer set forth in this Agreement
shall exist so long as the notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such notes.

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<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 in trust 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 (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut- off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies (including the PMI Policy) in respect of the Mortgage
Loans; (iv) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, (v) all other assets included or to be included in the Trust Fund,
(vi) the Initial Deposit and (vii) all proceeds of any of the foregoing. Such
assignment includes all interest and principal due to the Depositor or the
Master Servicer after the Cut-off Date with respect to the Mortgage Loans.

         In connection with such transfer and assignment, the Depositor, does
hereby deliver to, and deposit with the Trustee, or its designated agent (the
"Custodian"), the following documents or instruments with respect to each
Initial Mortgage Loan so transferred and assigned and the Originator, on behalf
of the Depositor, shall, in accordance with Section 2.08, deliver or caused to
be delivered to the Trustee with respect to each Subsequent Mortgage Loan, the
following documents or instruments (with respect to each Mortgage Loan, a
"Mortgage File") :

                  (i) the original Mortgage Note, endorsed either (A) in blank,
                  in which case the Trustee shall cause the endorsement to be
                  completed or (B) in the following form: "Pay to the order of
                  Wells Fargo Bank Minnesota, N.A., as Trustee, 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 or Subsequent
                  Cut-off Date Principal Balance, as applicable, of which is
                  less than or equal to 1.00% of the Pool Balance as of the
                  Cut-off Date or Subsequent Cut-off Date, as applicable;

                  (ii) the original Mortgage with evidence of recording thereon,
                  and the original recorded power of attorney, if the Mortgage
                  was executed pursuant to a power of attorney, with evidence of
                  recording thereon or, if such Mortgage or power of attorney
                  has been submitted for recording but has not been returned
                  from the applicable public recording office, has been lost or
                  is not otherwise available, a copy of such Mortgage or power
                  of attorney, as the case may be, certified to be a true and
                  complete copy of the original submitted for recording;

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<PAGE>

                  (iii) an original Assignment, in form and substance acceptable
                  for recording. The Mortgage shall be assigned either (A) in
                  blank or (B) to "Wells Fargo Bank Minnesota, N.A., as Trustee,
                  without recourse";

                  (iv) an original copy of any intervening assignment of
                  Mortgage showing a complete chain of assignments;

                  (v) the original or a certified copy of lender's title
                  insurance policy; and

                  (vi) the original or copies of each assumption, modification,
                  written assurance or substitution agreement, if any.

         The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor and the NIMs Insurer 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 F-3 hereto.

         If any of the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans) been submitted for recording but either (x) has not
been returned from the applicable public recording office or (y) has been lost
or such public recording office has retained the original of such document, the
obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date (or Subsequent Closing Date, with respect to Subsequent Mortgage
Loans), of a copy of each such document certified by the Master Servicer, in its
capacity as Originator, in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Master Servicer, in its capacity as Originator, delivery to the Trustee or
the Custodian, promptly upon receipt thereof of either the original or a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original. If the original lender's title insurance
policy, or a certified copy thereof, was not delivered pursuant to Section
2.01(v) above, the Master Servicer, in its capacity as Originator, shall deliver
or cause to be delivered to the Trustee or the Custodian, the original or a copy
of a written commitment or interim binder or preliminary report of title issued
by the title insurance or escrow company or an original attorney's opinion of
title, with the original or a certified copy thereof to be delivered to the
Trustee or the Custodian, promptly upon receipt thereof. The Master Servicer or
the Depositor shall deliver or cause to be delivered to the Trustee or the
Custodian promptly upon receipt thereof any other documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.

         Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Master
Servicer, in its capacity as Originator, shall have 90 days to cure such defect
or deliver such missing document to the Trustee or the Custodian. If the
Originator does not cure such defect or deliver such missing document within
such time period, the Master Servicer, in its capacity as Originator, shall
either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.

                                       44

<PAGE>

         The Depositor (at the expense of the Master Servicer, in its capacity
as Originator) shall cause the Assignments which were delivered in blank and
cause to be completed and shall 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 Depositor 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 Depositor to
the NIMs Insurer, the Trustee and the Rating Agencies on or before the Closing
Date, 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, each Assignment shall be
submitted for recording by the Depositor in the manner described above, 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
Master Servicer, (iv) the occurrence of a servicing transfer as described in
Section 7.02 hereof, (v) if the Originator is not the Master Servicer and with
respect to any one Assignment the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage and (vi) any
Mortgage Loan that is 90 days or more Delinquent. Notwithstanding the foregoing,
if the Originator fails to pay the cost of recording the Assignments, such
expense will be paid by the Trustee and the Trustee shall be reimbursed for such
expenses by the Trust. The Depositor shall be required to deliver such
assignments for recording within 45 days of the Closing Date (or Subsequent
Transfer Date, with respect to Subsequent Mortgage Loans). The Depositor 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 Depositor 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. In the event
that any Mortgage Note is endorsed in blank as of the Closing Date (or
Subsequent Transfer Date, with respect to Subsequent Mortgage Loans), promptly
following the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans) the Depositor shall cause to be completed such
endorsements "Pay to the order of Wells Fargo Bank Minnesota, N.A., as Trustee,
without recourse."

         The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement and the PMI Policy.

         The Master Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Master Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 270 days of its submission for recordation. In the event that
the Master Servicer cannot provide a copy of such document certified by the
public recording office within such 270 day period, the Master Servicer shall
deliver to the Custodian, within such 270 day period, an Officers' Certificate
of the Master Servicer which shall (A) identify the recorded document, (B) state
that the recorded document has not been delivered to the Custodian due solely to
a delay caused by the public recording office, (C) state the amount of time
generally required by the applicable recording office to record and return a
document submitted

                                       45

<PAGE>

for recordation, if known and (D) specify the date the applicable recorded
document is expected to be delivered to the Custodian, and, upon receipt of a
copy of such document certified by the public recording office, the Master
Servicer shall immediately deliver such document to the Custodian. In the event
the appropriate public recording office will not certify as to the accuracy of
such document, the Master Servicer shall deliver a copy of such document
certified by an officer of the Master Servicer to be a true and complete copy of
the original to the Custodian.

         Section 2.02.     ACCEPTANCE BY 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 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Initial
Mortgage Loan or the Subsequent Transfer Date, with respect to each Subsequent
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof). The Trustee further agrees, for
the benefit of the Certificateholders, to certify to the Depositor, the Master
Servicer and the NIMs Insurer in substantially the form attached hereto as
Exhibit F-1, within 45 days after the Closing Date, with respect to each Initial
Mortgage Loan and the Subsequent Transfer Date, with respect to each Subsequent
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 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 (1) and (2) 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 (or the
Custodian, as applicable) is under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.

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

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<PAGE>

         If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) 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 Originator the
Depositor, the NIMs Insurer and the Master Servicer. In addition, upon the
discovery by the Originator, the Depositor, the NIMs Insurer 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 Originator
in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties 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
                           ORIGINATOR.

         (a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Originator of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the
Originator, the NIMs Insurer and the Master Servicer of such defect, missing
document or breach and request that the Originator deliver such missing document
or cure such defect or breach within 90 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or cure such defect or breach in all material
respects during such period, the Trustee shall enforce the Originator's
obligation under the Mortgage Loan Purchase Agreement and cause the Originator
to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such 90 day period
(subject to Section 2.03(e)); PROVIDED that, in connection with any such breach
that could not reasonably have been cured within such 90 day period, if the
Originator shall have commenced to cure such breach within such 90 day period,
the Originator shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written certification from the Master Servicer of such deposit,
shall release to the Originator the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator shall furnish to it and as shall be necessary to
vest in the Originator any Mortgage

                                       47

<PAGE>

Loan released pursuant hereto and the Trustee shall have no further
responsibility with regard to such Mortgage File (it being understood that the
Trustee shall have no responsibility for determining the sufficiency of such
assignment for its intended purpose). In lieu of repurchasing any such Mortgage
Loan as provided above, the Originator 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 Originator to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy against
the Originator respecting such omission, defect or breach available to the
Trustee on behalf of the Certificateholders.

         (b) Subject to Section 2.03(e), within 90 days of the earlier of
discovery by the Depositor or receipt of notice by the Depositor of the breach
of any representation or warranty of the Depositor set forth in Section 2.06
with respect to any Mortgage Loan, which materially adversely affects the value
of such Mortgage Loan or the interest therein of the Certificateholders, the
Depositor shall (i) cure such breach in all material respects, (ii) repurchase
the Mortgage Loan from the Trust at the Purchase Price or (iii) cause such
Mortgage Loan to be removed from the Trust Fund (in which case it shall become a
Deleted Mortgage Loan) and substituted for by one or more Qualified Substitute
Mortgage Loans by the Originator in the manner and subject to the limitations
set forth in Section 2.03(d). The Purchase Price for any repurchased Mortgage
Loan shall be delivered to the Master Servicer for deposit in the Collection
Account, and, upon receipt thereof, the Master Servicer shall at the Depositor's
direction release to the Depositor the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment furnished
by the Depositor, in each case without recourse, as the Depositor shall furnish
to it and as shall be necessary to vest in the Depositor any Mortgage Loan
released pursuant hereto.

         (c) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.05 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.

         (d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the
last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and 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 Adjustment
(as described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Master Servicer and the NIMs
Insurer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto

                                       48

<PAGE>

as Exhibit F-1, with any applicable exceptions noted thereon. Within one year of
the date of substitution, the Trustee shall deliver to the Master Servicer and
the NIMs Insurer a certification substantially in the form of Exhibit F-2 hereto
with respect to such Qualified Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
the Trust Fund and will be retained by the Originator. For the month of
substitution, distributions to Certificateholders will reflect the collections
and recoveries in respect of such Deleted Mortgage Loan in the Due Period
preceding the month of substitution and the Originator shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Originator shall give or cause to be given written notice to
the Certificateholders and the NIMs Insurer that such substitution has taken
place, shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the NIMs Insurer and the Trustee. Upon such
substitution by the Originator, 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 as of the date of substitution.

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

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

         (e) Upon discovery by the Originator, the Master Servicer, the NIMs
Insurer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall within two Business Days give written notice thereof
to the other parties. In connection therewith, the Originator or the Depositor,
as the case may be, shall repurchase or, subject to the limitations set forth in
Section 2.03(d),

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<PAGE>

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 (i) by the Originator if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.06, or if its 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 Section 2.03(a),
if made by the Originator, or Section 2.03(b), if made by the Depositor. The
Trustee shall reconvey to the Depositor or the Originator, as the case may be,
the Mortgage Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Mortgage Loan repurchased for breach of
a representation or warranty.

         Section 2.04.     INTENTIONALLY OMITTED.

         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 duly organized, validly existing,
         and in good standing under the laws of the jurisdiction of its
         formation and has all licenses necessary to carry on its business as
         now being conducted and is licensed, qualified and in good standing in
         the states where the Mortgaged Property is located if the laws of such
         state require licensing or qualification in order to conduct business
         of the type conducted by the Master Servicer or to ensure the
         enforceability or validity of each Mortgage Loan; the Master Servicer
         has the power and authority to execute and deliver this Agreement and
         to perform in accordance herewith; the execution, delivery and
         performance of this Agreement (including all instruments of transfer to
         be delivered pursuant to this Agreement) by the Master Servicer and the
         consummation of the transactions contemplated hereby have been duly and
         validly authorized; this Agreement evidences the valid, binding and
         enforceable obligation of the Master Servicer, subject to applicable
         bankruptcy, insolvency, reorganization, moratorium or other similar
         laws affecting the enforcement of creditors' rights generally; and all
         requisite corporate action has been taken by the Master Servicer to
         make this Agreement valid and binding upon the Master Servicer in
         accordance with its terms;

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

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<PAGE>

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer and the performance and compliance with its obligations
         and covenants hereunder do not require the consent or approval of any
         governmental authority or, if such consent or approval is required, it
         has been obtained;

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

                  (v) [Reserved];

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

                  (vii) There is no action, suit, proceeding or investigation
         pending or, to its knowledge, threatened against the Master Servicer
         that, either individually or in the aggregate, (A) may result in any
         change in the business, operations, financial condition, properties or
         assets of the Master Servicer that might prohibit or materially and
         adversely affect the performance by such Master Servicer of its
         obligations under, or validity or enforceability of, this Agreement, or
         (B)may result in any material impairment of the right or ability of the
         Master Servicer to carry on its business substantially as now
         conducted, or (C) may result in any material liability on the part of
         the Master Servicer, or (D) would draw into question the validity or
         enforceability of this Agreement or of any action taken or to be taken
         in connection with the obligations of the Master Servicer contemplated
         herein, or (E) would otherwise be likely to impair materially the
         ability of the Master Servicer to perform under the terms of this
         Agreement;

                  (viii) Neither this Agreement nor any information, certificate
         of an officer, statement furnished in writing or report delivered to
         the Trustee by the Master Servicer in connection with the transactions
         contemplated hereby contains any untrue statement of a material fact;

                  (ix) 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;

                  (x) The information set forth in the Prepayment Charge
         Schedule (including the Prepayment Charge Summary attached thereto) is
         complete, true and correct in all material respects on the date or
         dates when such information is furnished and each Prepayment Charge is
         permissible and enforceable in accordance with its terms (except to the
         extent that the enforceability thereof may be limited by bankruptcy,
         insolvency, moratorium, receivership and other similar laws affecting
         creditor's rights generally or the collectibility

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<PAGE>

         thereof may be limited due to acceleration in connection with a
         foreclosure) under applicable state law; and

                  (xi) The Master Servicer will not waive any Prepayment Charge
         unless it is waived in accordance with the standard set forth in
         Section 3.01.

         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 NIMs Insurer, the Master Servicer, the Originator or the Trustee of a breach
of any of the foregoing representations, warranties and covenants which
materially and adversely affects the value of any Mortgage Loan, Prepayment
Charge or the interests therein of the Certificateholders, the party discovering
such breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Master Servicer, the Originator,
the NIMs Insurer and the Trustee. Notwithstanding the foregoing, within 90 days
of the earlier of discovery by the Master Servicer or receipt of notice by the
Master Servicer of the breach of the representation or covenant of the Master
Servicer (in its capacity as Originator) set forth in Sections 2.05(x) or
2.05(xi) above which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge, the Master
Servicer shall remedy such breach as follows: (a) if the representation made by
the Master Servicer (in its capacity as Originator) in Section 2.05(x) above is
breached and a Principal Prepayment has occurred in the applicable Prepayment
Period or if a change of law subsequent to the Closing Date limits the
enforceability of a Prepayment Charge (other than in the circumstances provided
in Section 2.05(x) above), the Master Servicer (in its capacity as Originator)
must pay the amount of the scheduled Prepayment Charge, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Collection Account, net of any amount previously collected by the Master
Servicer and paid by the Master Servicer, for the benefit of the Holders of the
Class P Certificates, in respect of such Prepayment Charge; and (b) if any of
the covenants made by the Master Servicer in Section 2.05(xi) above is breached,
the Master Servicer must pay the amount of such waived Prepayment Charge, for
the benefit of the holders of the Class P Certificates, by depositing such
amount into the Collection Account. The foregoing shall not, however, limit any
remedies available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders, pursuant to the Mortgage Loan Purchase
Agreement signed by the Master Servicer in its capacity as Originator,
respecting a breach of the representations, warranties and covenants of the
Master Servicer in its capacity as Originator contained in the Mortgage Loan
Purchase Agreement.

         Section 2.06.     REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

         The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:

                  (i) This Agreement constitutes a legal, valid and binding
         obligation of the Depositor, enforceable against the Depositor in
         accordance with its terms, except as enforceability may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or other
         similar laws now or hereafter in effect affecting the enforcement of

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<PAGE>

         creditors' rights in general and except as such enforceability may be
         limited by general principles of equity (whether considered in a
         proceeding at law or in equity);

                  (ii) Immediately prior to the sale and assignment by the
         Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
         the Depositor had good and marketable title to each Mortgage Loan
         (insofar as such title was conveyed to it by the Seller) subject to no
         prior lien, claim, participation interest, mortgage, security interest,
         pledge, charge or other encumbrance or other interest of any nature;

                  (iii) As of the Closing Date, the Depositor has transferred
         all right, title interest in the Mortgage Loans to the Trustee on
         behalf of the Trust;

                  (iv) The Depositor has not transferred the Mortgage Loans to
         the Trustee on behalf of the Trust with any intent to hinder, delay or
         defraud any of its creditors;

                  (v) The Depositor has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of Delaware,
         with full corporate power and authority to own its assets and conduct
         its business as presently being conducted;

                  (vi) The Depositor is not in violation of its articles of
         incorporation or by-laws or in default in the performance or observance
         of any material obligation, agreement, covenant or condition contained
         in any contract, indenture, mortgage, loan agreement, note, lease or
         other instrument to which the Depositor is a party or by which it or
         its properties may be bound, which default might result in any material
         adverse changes in the financial condition, earnings, affairs or
         business of the Depositor or which might materially and adversely
         affect the properties or assets, taken as a whole, of the Depositor;

                  (vii) The execution, delivery and performance of this
         Agreement by the Depositor, and the consummation of the transactions
         contemplated thereby, do not and will not result in a material breach
         or violation of any of the terms or provisions of, or, to the knowledge
         of the Depositor, constitute a default under, any indenture, mortgage,
         deed of trust, loan agreement or other agreement or instrument to which
         the Depositor is a party or by which the Depositor is bound or to which
         any of the property or assets of the Depositor is subject, nor will
         such actions result in any violation of the provisions of the articles
         of incorporation or by-laws of the Depositor or, to the best of the
         Depositor's knowledge without independent investigation, any statute or
         any order, rule or regulation of any court or governmental agency or
         body having jurisdiction over the Depositor or any of its properties or
         assets (except for such conflicts, breaches, violations and defaults as
         would not have a material adverse effect on the ability of the
         Depositor to perform its obligations under this Agreement);

                  (viii) To the best of the Depositor's knowledge without any
         independent investigation, no consent, approval, authorization, order,
         registration or qualification of or with any court or governmental
         agency or body of the United States or any other jurisdiction is
         required for the issuance of the Certificates, or the consummation by
         the Depositor of the other transactions contemplated by this Agreement,
         except such consents, approvals, authorizations, registrations or
         qualifications as (a) may be required under State securities

                                       53

<PAGE>

         or Blue Sky laws, (b) have been previously obtained or (c) the failure
         of which to obtain would not have a material adverse effect on the
         performance by the Depositor of its obligations under, or the validity
         or enforceability of, this Agreement; and

                  (ix) There are no actions, proceedings or investigations
         pending before or, to the Depositor's knowledge, threatened by any
         court, administrative agency or other tribunal to which the Depositor
         is a party or of which any of its properties is the subject: (a) which
         if determined adversely to the Depositor would have a material adverse
         effect on the business, results of operations or financial condition of
         the Depositor; (b) asserting the invalidity of this Agreement or the
         Certificates; (c) seeking to prevent the issuance of the Certificates
         or the consummation by the Depositor of any of the transactions
         contemplated by this Agreement, as the case may be; or (d) which might
         materially and adversely affect the performance by the Depositor of its
         obligations under, or the validity or enforceability of, this
         Agreement.

         Section 2.07.     ISSUANCE OF 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 Sections
2.01 and 2.02, together with the assignment to it of all other assets included
in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with
such assignment and delivery and in exchange therefor, the Trustee, pursuant to
the written request of the Depositor executed by an officer of the Depositor,
has executed, authenticated and delivered to or upon the order of the Depositor,
the Certificates in authorized denominations. The interests evidenced by the
Certificates, constitute the entire beneficial ownership interest in the Trust
Fund.

         Section 2.08.     CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS.

                  (a) Subject to the conditions set forth in paragraph (b) below
in consideration of the Trustee's delivery on the Subsequent Transfer Dates to
or upon the order of the Depositor of all or a portion of the balance of funds
in the Pre-Funding Account, the Depositor shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Depositor in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Depositor on such Subsequent
Transfer Date, (ii) principal due and interest accruing on the Subsequent
Mortgage Loans after the related Subsequent Cut-off Date and (iii) all items
with respect to such Subsequent Mortgage Loans to be delivered pursuant to
Section 2.01 and the other items in the related Mortgage Files; PROVIDED,
HOWEVER, that the Depositor reserves and retains all right, title and interest
in and to principal received and interest accruing on the Subsequent Mortgage
Loans prior to the related Subsequent Cut-off Date. The transfer to the Trustee
for deposit in the Mortgage Pool by the Depositor of the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule shall be absolute and is intended
by the Depositor, the Master Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee at least three Business Days
prior to the related Subsequent Transfer Date.

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<PAGE>

                  The purchase price paid by the Trustee from amounts released
from the Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor). This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.

                  (b) The Depositor shall transfer to the Trustee for deposit in
the Mortgage Pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Trustee
shall release funds from the Pre-Funding Account, only upon the satisfaction of
each of the following conditions on or prior to the related Subsequent Transfer
Date:

                  (i) the Depositor shall have provided the Trustee, the NIMs
         Insurer and the Rating Agencies with a timely Addition Notice and shall
         have provided any information reasonably requested by the Trustee with
         respect to the Subsequent Mortgage Loans;

                  (ii) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer a duly executed Subsequent Transfer Instrument, which
         shall include a Mortgage Loan Schedule listing the Subsequent Mortgage
         Loans, and the Master Servicer, in its capacity as Originator, shall
         have delivered a computer file containing such Mortgage Loan Schedule
         to the Trustee at least three Business Days prior to the related
         Subsequent Transfer Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit N, the Depositor shall not be insolvent nor shall it
         have been rendered insolvent by such transfer nor shall it be aware of
         any pending insolvency;

                  (iv) such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Depositor shall have delivered to the Trustee and
         the NIMs Insurer a Subsequent Transfer Instrument confirming the
         satisfaction of the conditions precedent specified in this Section 2.08
         and, pursuant to the Subsequent Transfer Instrument, assigned to the
         Trustee without recourse for the benefit of the Certificateholders all
         the right, title and interest of the Depositor, in, to and under the
         Subsequent Mortgage Loan Purchase Agreement, to the extent of the
         Subsequent Mortgage Loans;

                  (viii) with respect to the last Subsequent Transfer Date, the
         Depositor shall have delivered to the Trustee and the NIMs Insurer a
         letter from an Independent accountant (with copies provided to each
         Rating Agency) stating that the characteristics of the Subsequent
         Mortgage Loans conform to the characteristics set forth in paragraphs
         (c) and (d) below;

                                       55

<PAGE>

                  (ix) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer an Opinion of Counsel addressed to the Trustee and the
         Rating Agencies with respect to the transfer of the Subsequent Mortgage
         Loans substantially in the form of the Opinion of Counsel delivered to
         the Trustee on the Closing Date regarding the true sale of the
         Subsequent Mortgage Loans; and

                  (x) the Depositor shall have received the consent of the NIMs
         Insurer to the transfer of such Subsequent Mortgage Loans.

                  (c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (vi) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than 6.000% per annum or greater than 16.000% per annum;
(vii) such Subsequent Mortgage Loan shall have been serviced by the Master
Servicer since origination or the date of purchase; (viii) such Subsequent
Mortgage Loan must have a first payment date occurring on or before July 1,
2001; (ix) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Subsequent Mortgage Loan will have a Gross Margin not less than 2.000% per
annum; (x) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Subsequent Mortgage Loan will have a Maximum Mortgage Rate not less than
12.000% per annum; (xi) if the Subsequent Mortgage Loan is an Adjustable Rate
Mortgage Loan, the Subsequent Mortgage Loan will have a Minimum Mortgage Rate
not less than 6.000% per annum and (xii) such Subsequent Mortgage Loan shall
have been underwritten in accordance with the criteria set forth under "Option
One Mortgage Corporation--Underwriting Standards" in the Prospectus Supplement.

                  (d) In addition, following the purchase of any Subsequent
Mortgage Loan by the Trust, the Mortgage Loans (including such Subsequent
Mortgage Loans) will as of the Subsequent Cut-off Date: (i) have a weighted
average original term to stated maturity of not more than 360 months; (ii) have
a weighted average Mortgage Rate of not less than 9.350% per annum and not more
than 9.750% per annum; (iii) have a weighted average Loan-to-Value Ratio of not
more than 79.00%; (iv) have no Mortgage Loan with a principal balance in excess
of $1,000,000; (v) will consist of Mortgage Loans covered by the PMI Policy
representing no less than 70.00% of the Pool Balance; (v) will consist of
Mortgage Loans with Prepayment Charges representing no less than approximately
78.00% of the Pool Balance and (vi) have no more than 9.60% of Fixed Rate
Mortgage Loans by aggregate principal balance of the Mortgage Loans as of the
Subsequent Cut-off Date. In addition, the Adjustable Rate Mortgage Loans will as
of the Subsequent Cut-off Date have a weighted average Gross Margin not less
than 4.75% by aggregate principal balance of the Adjustable Rate Mortgage Loans
as of the Subsequent Cut-off Date.

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                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by (i) the NIMs Insurer or (ii) either Rating Agency if the
inclusion of any such Subsequent Mortgage Loan would adversely affect the
ratings of any Class of Certificates. At least one Business Day prior to the
Subsequent Transfer Date, each Rating Agency shall notify the Trustee as to
which Subsequent Mortgage Loans, if any, shall not be included in the transfer
on the Subsequent Transfer Date; provided, however, that the Master Servicer, in
its capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
acceptable to each Rating Agency describing the characteristics specified in
paragraphs (c) and (d) above.

         Section 2.09.     CONVEYANCE OF REMIC REGULAR INTERESTS AND
                           ACCEPTANCE OF REMIC 1 BY THE TRUSTEE; ISSUANCE OF
                           CERTIFICATES.

         (a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests for the benefit of the holders of the
Certificates. The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates. The
interests evidenced by the Class R-2 Interest, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC 2.

         (b) In exchange for the REMIC 1 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations evidencing (together with the Class R-2
Interest) the entire beneficial ownership interest in REMIC 2.

         (c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.09(a) and (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual Interest therein represented by the
Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.09(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations evidencing the Class R-1 Interest and the Class R-2
Interest.

         Section 2.10.     NEGATIVE COVENANTS OF THE TRUSTEE AND THE MASTER
                           SERVICER.

         Except as otherwise expressly permitted by this Agreement, the Trustee
and the Master Servicer shall not cause the Trust Fund to:

         (i) sell, transfer, exchange or otherwise dispose of any of the assets
of the Trust Fund;

         (ii) dissolve or liquidate the Trust Fund in whole or in part;

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         (iii) engage, directly or indirectly, in any business other than that
arising out of the issue of the Certificates, and the actions contemplated or
required to be performed under this Agreement;

         (iv) incur, create or assume any indebtedness for borrowed money;

         (v) voluntarily file a petition for bankruptcy, reorganization,
assignment for the benefit of creditors or similar proceeding; or

         (vi) merge, convert or consolidate with any other Person.

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                                   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 Trust 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 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 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 or non-ownership of any Certificate by the
         Master Servicer or any Affiliate of the Master Servicer;

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

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

         To the extent consistent with the foregoing, the Master Servicer (a)
shall seek the timely and complete recovery of principal and interest on the
Mortgage Notes and (b) shall waive (or permit a subservicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) either (A)
such waiver relates to a default or a reasonably foreseeable default and would,
in the reasonable judgement of the Master Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Mortgage Loan or (B) such waiver is made in connection with a refinancing of the
related Mortgage Loan unrelated to a default or a reasonably foreseeable default
where (x) the related mortgagor has stated to the Master Servicer or an
applicable subservicer an intention to refinance the related Mortgage Loan and
(y) the Master Servicer has concluded in its reasonable judgement that the
waiver of such Prepayment Charge would induce such mortgagor to refinance with
the Master Servicer; provided, however, that the Master Servicer shall waive no
more than 5.00% of the Prepayment Charges (by number of Prepayment Charges) set
forth on the Prepayment Charge Schedule in accordance with clause (ii)(B) above.
If a Prepayment Charge is waived as permitted by meeting the standards described
in clauses (i) and (ii)(B) above, then the Master Servicer is required to pay
the amount of such waived Prepayment Charge, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the Collection Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Collection Account. Notwithstanding
any other provisions of this Agreement, any payments

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made by the Master Servicer in respect of any waived Prepayment Charges pursuant
to clauses (i) and (ii)(B) above shall be deemed to be paid outside of the Trust
Fund. Subject only to the above- described servicing standards and the terms of
this Agreement and of the 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
insurer under any standard hazard insurance policy. Subject to Section 3.17,
within 15 days of the Closing Date, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer any special or limited powers of attorney for each county in which
a Mortgaged Property is located and other documents necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder; PROVIDED, such limited powers of attorney or
other documents shall be prepared by the Master Servicer and submitted to the
Trustee for execution. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.

         Subject to Section 3.09 hereof, 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 4.04) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the Principal Balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or Treasury

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regulations promulgated thereunder) and (B) cause any REMIC created hereunder 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.

         Section 3.02.     SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
                           SUB-SERVICERS.

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

         Each Sub-Servicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) 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; PROVIDED, FURTHER, that the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub- Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. 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
NIMs Insurer and 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,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent

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

         Section 3.03.     SUCCESSOR SUB-SERVICERS.

         The Master Servicer, with the consent of the NIMs Insurer, shall be
entitled to terminate any Sub-Servicing Agreement and the rights and obligations
of any Sub-Servicer pursuant to any Sub- Servicing Agreement in accordance with
the terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Sub- Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 3.02.

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

         Section 3.04.     LIABILITY OF THE MASTER SERVICER.

         Notwithstanding any Sub-Servicing Agreement or 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.

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         Section 3.05.     NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND
                           THE NIMS INSURER, THE TRUSTEE OR CERTIFICATEHOLDERS.

         Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMs Insurer, the Trustee or 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
servicer (including by reason of the occurrence of a Master Servicer Event of
Termination), the Trustee 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 (or the successor servicer appointed
pursuant to Section 7.02) shall be deemed, subject to Section 3.03, to have
assumed all of the departing Master Servicer's interest therein and to have
replaced the departing 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 departing Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) neither the Trustee nor 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 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. All Servicing Transfer Costs
shall be paid by the predecessor Master Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Master Servicer defaults in
its obligation to pay such costs, such costs shall be paid by the successor
Master Servicer or the Trustee (in which case the successor Master Servicer or
the Trustee, as applicable, shall be entitled to reimbursement therefor from the
assets of the Trust).

         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 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

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may in its discretion (i) waive any late payment charge or, if applicable, any
penalty interest, or (ii) extend the due dates for the Monthly Payments due on a
Mortgage Note for a period of not greater than 180 days; PROVIDED, HOWEVER, 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; provided further that the NIMs Insurer's prior written
consent shall be required for any modification, waiver or amendment if the
amendment if the aggregate number of outstanding Mortgage Loans which have been
modified, waived or amended exceeds 5% of the number of Mortgage Loans as of the
Cut-off Date and any Subsequent Cut-off Date. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. 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
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), PROVIDED, HOWEVER, that in no event shall
the Master Servicer grant any such forbearance (other than as permitted by the
second sentence of this Section) with respect to any one Mortgage Loan more than
once in any 12 month period or more than three times over the life of such
Mortgage Loan, and PROVIDED, FURTHER, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Procedures. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Procedures shall be reflected in writing in
the Mortgage File.

         Section 3.08.     SUB-SERVICING ACCOUNTS.

         In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an 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 in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

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         Section 3.09.     COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
                           SERVICING ACCOUNTS.

         The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, 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 two Business Days after the receipt of
such Escrow Payments, all Escrow Payments collected on account of the Mortgage
Loans for the purpose of effecting the timely 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 taxes, assessments,
hazard insurance premiums, and comparable items in a manner and at a time that
assures that the lien priority of the Mortgage is not jeopardized (or, with
respect to the payment of taxes, in a manner and at a time that avoids the loss
of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien); (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 Servicing 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; or (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 X. In the event
the Master Servicer shall deposit in a Servicing Account any amount not required
to be deposited therein, it may at any time withdraw such amount from such
Servicing Account, any provision herein to the contrary notwithstanding. The
Master Servicer will be responsible for the administration of the Servicing
Accounts and will be obligated to make Servicing Advances to such accounts when
and as necessary to avoid the lapse of insurance coverage on the Mortgaged
Property, or which the Master Servicer knows, or in the exercise of the required
standard of care of the Master Servicer hereunder should know, is necessary to
avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure as
a result of a tax lien. If any such payment has not been made and the Master
Servicer receives notice of a tax lien with respect to the Mortgage being
imposed, the Master Servicer will, within 10 business days of such notice,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in the 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. The Master Servicer
may pay to itself any excess interest on funds in the Servicing Accounts, to the
extent such action is in conformity with the Servicing Standard, is permitted by
law and such amounts are not required to be paid to Mortgagors or used for any
of the other purposes set forth above.

         Section 3.10.     COLLECTION ACCOUNT, INITIAL DEPOSIT ACCOUNT AND
                           DISTRIBUTION ACCOUNT.

         (a) On behalf of the Trust Fund, the Master Servicer shall establish
and maintain, or cause to be established and maintained, one or more accounts
(such account or accounts, the

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"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 in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the Master Servicer's receipt thereof, as and when received or as
otherwise required hereunder, the following payments and collections received or
made by it subsequent to the Cut-off Date or Subsequent Cut-off Date, as
applicable, (other than in respect of principal or interest on the Mortgage
Loans due on or before the Cut-off Date or Subsequent Cut-off Date, as
applicable) or payments (other than Principal Prepayments) received by it on or
prior to the Cut-off Date or Subsequent Cut-off Date, as applicable, but
allocable to a Due Period subsequent thereto:

                  (i) all payments on account of principal, including Principal
         Prepayments (but not Prepayment Charges), 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, Liquidation Proceeds and
         condemnation proceeds (other than proceeds collected in respect of any
         particular REO Property and amounts paid in connection with a purchase
         of Mortgage Loans and REO Properties pursuant to Section 10.01);

                  (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 10.01;

                  (vii) all amounts required to be deposited in connection with
         Substitution Adjustments pursuant to Section 2.03;

                  (viii) all Prepayment Charges collected by the Master Servicer
         and any Master Servicer Prepayment Charge Payment Amounts in connection
         with the Principal Prepayment of any of the Mortgage Loans; and

                  (ix) without duplication, all payments of claims under the PMI
         Policy.

         The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Servicing Fees, late
payment charges, assumption fees, insufficient funds charges and ancillary

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income (other than Prepayment Charges) need not be deposited by the Master
Servicer in the Collection Account and may be retained by the Master Servicer as
additional compensation. 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.

         (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 Trustee and 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 3:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Available Funds (calculated
without regard to the references in 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, the amount of all Prepayment Charges
collected during the applicable Prepayment Period by the Master Servicer and
Master Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.29, 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 Master Servicer, the Trustee, the
Originator or any Sub- Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.

                  On behalf of the Trust Fund, the Trustee shall establish and
maintain the Initial Deposit Account, held in trust for the benefit of
Certificateholders. On the Closing Date, the Depositor shall remit or cause to
be remitted to the Trustee, for deposit in the Initial Deposit Account, and the
Trustee shall deposit the Initial Deposit, to the extent received by it, into
the Initial Deposit Account. The Initial Deposit Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of any REMIC. Any investment earnings on funds in the Initial Deposit
Account shall be treated as owned by the Depositor and will be taxable to the
Depositor. The Trustee shall be required to withdraw such earnings from the
Initial Deposit Account and remit the same to the Depositor on the first
Distribution Date (or as soon as received if such funds are not available on
such Distribution Date), and shall thereupon terminate such account.

         (c) Funds in the Collection Account, the Initial Deposit 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 NIMs Insurer and the Trustee 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 NIMs Insurer, the Master Servicer and the
Depositor

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of the location of the Distribution Account and the Initial Deposit 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, with respect to items (i) through (iv) below, shall deliver to
the Trustee from time to time for deposit, and the Trustee, with respect to
items (i) through (iv) below, shall so deposit, in the Distribution Account:

                  (i) any Advances, as required pursuant to Section 4.04;

                  (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 in connection with a purchase of
                  Mortgage Loans and REO Properties pursuant to Section 10.01;

                  (iv) any Compensating Interest to be deposited pursuant to
                  Section 3.24 in connection with any Prepayment Interest
                  Shortfall; and

                  (v) any amounts required to be paid to the Trustee pursuant to
                  the Agreement, including, but not limited to Section 3.06 and
                  Section 7.02.

         (e) [Reserved].

         (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 4.04:

                  (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 (a) any unreimbursed Advances to the extent of amounts
         received which represent Late Collections

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         (net of the related Servicing Fees) of Monthly Payments, Liquidation
         Proceeds and Insurance Proceeds on Mortgage Loans with respect to which
         such Advances were made in accordance with the provisions of Section
         4.04; (b) any unreimbursed Advances with respect to the final
         liquidation of a Mortgage Loan that are Nonrecoverable Advances, 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 for such unreimbursed
         Advances; or (c) subject to Section 4.04(b), any unreimbursed Advances
         to the extent of funds held in the Collection Account for future
         distribution that were not included in Available Funds for the
         preceding Distribution Date;

                  (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 Late Collections, Liquidation Proceeds, Insurance
         Proceeds and condemnation proceeds received with respect to such
         Mortgage Loan, and (c) any Servicing Advances with respect to the final
         liquidation of a Mortgage Loan that are Nonrecoverable Advances, 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
         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 Originator, 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 Advance or
         Servicing Advance previously made which the Master Servicer has
         determined to be a Nonrecoverable Advance in accordance with the
         provisions of Section 4.04;

                  (vii) to pay, or to reimburse the Master Servicer for
         Servicing Advances in respect of, expenses incurred in connection with
         any Mortgage Loan pursuant to Section 3.16(b);

                  (viii) to reimburse the Master Servicer for expenses incurred
         by or reimbursable to the Master Servicer pursuant to Section 6.03;

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

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                  (ix) to pay itself any Prepayment Interest Excess; and

                  (x) to clear and terminate the Collection Account pursuant to
         Section 10.01.

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

         The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The
Master Servicer shall provide written notification to the NIMs Insurer and the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(vi) above; PROVIDED that an Officers' Certificate in the form described under
Section 4.04(d) shall suffice for such written notification to the Trustee in
respect hereof.

         (b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:

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

                  (ii) to pay itself the Trustee Fee pursuant to Section 8.05;

                  (iii) to pay any amounts in respect of taxes pursuant to
         Section 9.01(g);

                  (iv) to clear and terminate the Distribution Account pursuant
         to Section 10.01;

                  (v) to pay any amounts required to be paid to the Trustee
         pursuant to this Agreement, including but not limited to funds required
         to be paid pursuant to Section 3.06 and Section 7.02;

                  (vi) to pay to the Trustee, any interest or investment income
         earned on funds deposited in the Distribution Account;

                  (vii) to pay to an Advancing Person reimbursements for
         Advances and/or Servicing Advances pursuant to Section 3.29; and

                  (viii) to pay the PMI Insurer the PMI Insurer Fee.

         Section 3.12.     INVESTMENT OF FUNDS IN THE INTEREST COVERAGE ACCOUNT,
                           COLLECTION ACCOUNT, INITIAL DEPOSIT ACCOUNT AND THE
                           DISTRIBUTION ACCOUNT.

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         (a) The Master Servicer may direct any depository institution
maintaining the Interest Coverage Account and the Collection Account and at the
direction of the Master Servicer the Trustee shall direct any depository
institution maintaining the Distribution Account and the Initial Deposit Account
(each such account, for purposes of this Section 3.12, 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 or if such
investment is managed or advised by a Person other than the Trustee or an
Affiliate of the Trustee, 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 or if such investment is managed or advised
by the Trustee or any Affiliate. 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
Interest Coverage Account, the Initial Deposit Account and the Collection
Account and any income and gain realized thereon) over each such investment, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:

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

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

         (b) All income and gain realized from the investment of funds deposited
in the Interest Coverage Account, the Collection Account and any REO 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 or Section 3.23, as applicable. The Master Servicer shall deposit
in the Interest Coverage Account, the Collection Account or any REO Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such account immediately upon
realization of such loss.

         (c) All income and gain realized from the investment of funds deposited
in the Distribution Account shall be for the benefit of the Trustee. 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. All income and gain realized
from the investment of funds deposited in the Initial Deposit Account shall be
for

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the benefit of the Depositor. The Depositor shall remit from its own funds to
the Trustee for deposit in the Initial Deposit 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 NIMs Insurer or the Holders of Certificates representing
more than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.

         Section 3.13.     [Reserved].

         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 hazard insurance with extended coverage on the Mortgaged Property in an
amount which is at least equal to the lesser of (i) the current Principal
Balance of such Mortgage Loan and (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, 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 hazard 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. 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 and flood insurance has been made available, 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

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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:III 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 provide
the Trustee and the NIMs Insurer, upon request, with copies of such insurance
policies and fidelity bond. The Master Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Fannie Mae or
Freddie Mac, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee and the NIMs Insurer. 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 be required to take such action if in its
sole business judgment the Master Servicer believes it is not in the best
interests of the Trust Fund and shall not exercise any such rights if prohibited
by law from doing so. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into an assumption and

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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 and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Master Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The Master Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Master Servicer in respect of an assumption,
modification or substitution of liability agreement shall 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, modification or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution,
modification 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.

         The Master Servicer shall be entitled to any Prepayment Interest Excess
which it may withdraw from the Collection Account pursuant to Section 3.11(a).

         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 use its best efforts, consistent with
Servicing Standard, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans (including, if such
is the action to be taken that results from adherence to the Loss Mitigation
Procedures, selling any such Mortgage Loans other than converting the ownership
of the related properties as provided in Section 3.16(e) below) 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

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foregoing is subject to the provision that, in any case in which a 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 or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Master Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:

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

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

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

         The cost of the environmental audit report contemplated by this Section
3.16 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)(vii), 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

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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; PROVIDED that any amounts
disbursed by the Master Servicer pursuant to this Section 3.16(b) shall
constitute Servicing Advances, subject to Section 4.04(d). 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)(iii) and (a)(vii), 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) (i) The NIMS Insurer may, at its option, purchase a Mortgage Loan
which has become 90 or more days delinquent or for which the Master Servicer has
accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this
Section 3.16(c)(i), the Master Servicer shall be required to continue to make
Advances pursuant to Section 4.04. The NIMS Insurer shall not use any procedure
in selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The NIMS Insurer shall purchase such
delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage
Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(c)(i)
shall be accomplished by remittance to the Master Servicer for deposit in the
Collection Account of the amount of the Purchase Price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan to the
NIMS Insurer to the extent necessary, including the prompt delivery of all
documentation to the NIMS Insurer.

                           (ii) If the Master Servicer Optional Purchase
Delinquency Trigger has been met, the Master Servicer may, at its option,
purchase a Mortgage Loan which has become 90 or more days delinquent or for
which the Master Servicer has accepted a deed in lieu of foreclosure. Prior to
purchase pursuant to this Section 3.16(c)(ii), the Master Servicer shall be
required to continue to make Advances pursuant to Section 4.04. The Master
Servicer shall purchase such delinquent Mortgage Loan at a price equal to the
Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan
pursuant to this Section 3.16(c)(ii) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan to the
Master Servicer to the extent necessary, including the prompt delivery of all
documentation to the Master Servicer.

                  Notwithstanding the foregoing: (A) the Master Servicer shall
have the option to purchase pursuant to this Section 3.16(c)(ii) only such
delinquent Mortgage Loans having an aggregate Principal Balance such that, if
such delinquent Mortgage Loans were not in the Trust, the Master Servicer
Optional Purchase Delinquency Trigger would not be met; (B) if the Master
Servicer purchases any delinquent Mortgage Loans pursuant to this Section
3.16(c)(ii), it must purchase Mortgage Loans that are delinquent the greatest
number of days before it may purchase any that are delinquent any fewer number
of days; (C) if the Master Servicer purchases some but not all Mortgage Loans
that are delinquent any given number of days, it must purchase Mortgage Loans
having the same delinquency status in the order of lowest Principal Balance to
highest Principal Balance; (D) the Master Servicer may at any time relinquish
its rights to purchase delinquent Mortgage Loans pursuant to this Section
3.16(C)(ii) in writing delivered to the Trustee, and from and

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after the taking of such action by the Master Servicer, the provisions of this
Section 3.16(c)(ii) shall no longer be of any force or effect.

         (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: FIRST, to
unpaid Servicing Fees; SECOND, to reimburse the Master Servicer or any Sub-
Servicer for any related unreimbursed Servicing Advances pursuant to Section
3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); THIRD, 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 FOURTH, as a recovery of principal of the Mortgage Loan. 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).

         (e) If, pursuant to the Loss Mitigation Procedures, the Master Servicer
shall be required to sell a Mortgage Loan that is over 90 days delinquent,
rather than foreclosing, then the Master Servicer may effect such a sale. The
net proceeds of such sale shall be Liquidation Proceeds.

         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 shall deliver to the
Trustee, in written (with two executed copies) or electronic format, a Request
for Release in the form of Exhibit E (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Master Servicer, the
related Mortgage File to the Master Servicer. The Trustee agrees to indemnify
the Master Servicer, out of its own funds, for any loss, liability or expense
(other than special, indirect, punitive or consequential damages which will not
be paid by the Trustee) incurred by the Master Servicer as a proximate result of
the Trustee's breach of its obligations pursuant to this Section 3.17. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee,
in written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File to the
Master Servicer within three Business Days, and the Trustee shall, at the
direction of the Master Servicer, execute such documents as shall be necessary
to the prosecution

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of any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each and every document previously requested from the
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, or caused to be delivered, to the Trustee an additional
Request for Release certifying as to such liquidation or action or proceedings.
Upon the request of the Trustee, the Master Servicer shall provide notice to the
Trustee of the name and address of the Person to which such Mortgage File or
such document was delivered and the purpose or purposes of such delivery. Upon
receipt of a Request for Release, in written (with two executed copies) or
electronic format, from a Servicing Officer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation that are required to be deposited into the Collection Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
such Mortgage Loan shall be released by the Trustee to the Master Servicer or
its designee.

         (c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer or the Sub-Servicer, as the
case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.

         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,
Liquidation Proceeds or condemnation proceeds to the extent permitted by Section
3.11(a)(iii) 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; PROVIDED, HOWEVER, that the Master Servicer
may pay from the Servicing Fee any amounts due to a Sub-Servicer pursuant to a
Sub-Servicing Agreement entered into under Section 3.02.

         Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges, ancillary income or otherwise
(other than Prepayment Charges) shall be

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retained by the Master Servicer only to the extent such fees or charges are
received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.11(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 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
and servicing compensation of each Sub-Servicer) and shall not be entitled to
reimbursement therefor except as specifically provided herein.

         The Master Servicer shall be entitled to any Prepayment Interest
Excess, which it may withdraw from the Collection Account pursuant to Section
3.11(a)(ix).

         Section 3.19.     REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT
                           STATEMENTS.

         Not later than twenty days after each Distribution Date, the Master
Servicer shall forward to the NIMs Insurer and, upon request, to the Trustee and
the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.

         Section 3.20.     STATEMENT AS TO COMPLIANCE.

         The Master Servicer will deliver to the Trustee, the NIMs Insurer and
the Depositor not later than 90 days following the end of the fiscal year of the
Master Servicer (which, as of the Closing Date, ends on the last day of April),
commencing in 2002, 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 request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trustee.

         Section 3.21.     INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.

         Not later than 90 days following the end of each fiscal year of the
Master Servicer, commencing in 2002, 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

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respect to the servicing of residential mortgage loans during the most recently
completed fiscal year and (ii) on the basis of an examination conducted by such
firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Sub-Servicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Sub-Servicers. Immediately upon receipt of such report, the Master Servicer
shall furnish a copy of such report to the Trustee, the NIMs Insurer and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee.

         Section 3.22.     ACCESS TO CERTAIN DOCUMENTATION; FILING OF REPORTS BY
                           TRUSTEE.

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

         (b) Within 15 days after each Distribution Date, the Trustee shall file
with the Securities and Exchange Commission via the Electronic Data Gathering
Analysis and Retrieval System (EDGAR), 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 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
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 Securities and Exchange
Commission. The Trustee shall have no responsibility to file any items with the
Securities and Exchange Commission other than those specified in this Section.

         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

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behalf of REMIC 1, shall either sell any REO Property by the end of the third
full taxable year after the taxable year in which such REMIC 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 such
three-year period, unless the Master Servicer shall have delivered to the
Trustee and the NIMs Insurer an Opinion of Counsel, addressed to the Trustee,
the NIMs Insurer and the Depositor, to the effect that the holding by the REMIC
of such REO Property subsequent to three years after its acquisition will not
result in the imposition on the REMIC of taxes on "prohibited transactions"
thereof, as defined in Section 860F of the Code, or cause any of the REMICs
created hereunder 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 any of
the REMICs created hereunder 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 separately account for all funds
collected and received in connection with the operation of any REO Property and
shall establish and maintain, or cause to be established and maintained, 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 (subject to the requirement of prompt disposition set forth in Section
3.23(a)) as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Master Servicer's receipt thereof, 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.

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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, neither the Master Servicer nor
the Trustee shall:

                  (A) 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;

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

                  (C) 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

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

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMs Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by the REMIC, 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:

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

                  (2) 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;

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                  (3) 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

                  (4) 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; PROVIDED, HOWEVER, that to the extent that any payments made by such
Independent Contractor would constitute Servicing Advances if made by the Master
Servicer, such amounts shall be reimbursable as Servicing Advances made by the
Master Servicer.

         (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 Advances made in respect of
such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

         (e) Subject to the time constraints set forth in Section 3.23(a), each
REO Disposition shall be carried out by the Master Servicer in a manner, at such
price and upon such terms and conditions as shall be in conformity with the
requirements of the Loss Mitigation Procedures and as shall be normal and usual
in its Servicing Standard.

         (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

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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.

         Not later than 3:00 p.m. New York time on each Master Servicer
Remittance Date, the Master Servicer shall remit to the Distribution Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) its
aggregate Servicing Fee received in the related Due Period, any interest or
investment income earned on funds deposited in the Collection Account and any
Prepayment Interest Excess earned during the related Prepayment Period. The
Master Servicer shall not have the right to reimbursement for any amounts
remitted to the Trustee in respect of Compensating Interest. Such amounts so
remitted shall be included in the Available Funds and distributed therewith on
the next Distribution Date. The Master Servicer shall not be obligated to pay
Compensating Interest with respect to Relief Act Interest Shortfalls.

         Section 3.25.     [Reserved].

         Section 3.26.     OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF
                           MORTGAGE RATES AND MONTHLY PAYMENTS.

         In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deposit in the
Collection 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 servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.26 shall not limit the ability of the Master Servicer
to seek recovery of any such amounts from the related Mortgagor under the terms
of the related Mortgage Note, as permitted by law.

         Section 3.27.     SOLICITATIONS.

         From and after the Closing Date, the Master Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Master Servicer's behalf, to personally, by
telephone, mail or electronic mail, solicit the Mortgagor under any Mortgage
Loan for the purpose of refinancing such Mortgage Loan; PROVIDED, that the
Master Servicer may solicit any Mortgagor for whom the Master Servicer has
received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, another mortgage company has pulled
a credit report on

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the mortgagor or the mortgagor initiates a title search; provided further, it is
understood and agreed that promotions undertaken by the Master Servicer or any
of its Affiliates which (i) concern optional insurance products or other
additional products or (ii) are directed to the general public at large,
including, without limitation, mass mailings based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section, nor is the Master Servicer
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer shall be
permitted to include in its monthly statements to borrowers or otherwise,
statements regarding the availability of the Master Servicer's counseling
services with respect to refinancing mortgage loans.

         Section 3.28.     RESERVE FUND.

         No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Reserve Fund,
Wells Fargo Bank Minnesota, N.A., as Trustee, in trust for registered Holders of
Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates, Series
2001-2." On the Closing Date, the Depositor will deposit, or cause to be
deposited, into the Reserve Fund $1,000.

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

         For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000) shall be treated as amounts distributed by REMIC 3 to the Holders of
the Class C Certificates. Upon the termination of the Trust, or the payment in
full of the Class A Certificates and the Mezzanine Certificates, all amounts
remaining on deposit in the Reserve Fund will be released by the Trust and
distributed to the Class C Certificateholders or their designees. The Reserve
Fund will be part of the Trust but not part of any REMIC and any payments to the
Holders of the Class A Certificates or the Mezzanine Certificates of Net WAC
Rate Carryover Amounts will not be payments with respect to a "regular interest"
in a REMIC within the meaning of Code Section 860(G)(a)(1).

         By accepting a Class C Certificate, each Class C Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Reserve Fund the amounts described above on each Distribution
Date as to which there is any Net WAC Rate Carryover Amount rather than
distributing such amounts to the Class C Certificateholders. By accepting a
Class C Certificate,

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each Class C Certificateholder further agrees that such direction is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.

         At the direction of the Holders of a majority in Percentage Interest in
the Class C Certificates, the Trustee shall direct any depository institution
maintaining the Reserve Fund to invest the funds in such account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee or an
Affiliate manages or advises such investment, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee or an Affiliate manages or advises such investment. If
no investment direction of the Holders of a majority in Percentage Interest in
the Class C Certificates with respect to the Reserve Fund is received by the
Trustee, the Trustee shall invest the funds in such account in Permitted
Investments managed by the Trustee or an Affiliate of the kind described in
clause (vi) of the definition of Permitted Investments.

         For federal tax return and information reporting, the right of the
Class A Certificateholders and the Mezzanine Certificateholders to receive
payments from the Reserve Fund in respect of any Net Wac Rate Carryover Amount
shall be assigned a value of zero.

         Section 3.29.     ADVANCE FACILITY.

         (a) The Trustee on behalf of the Trust Fund, with the consent of the
Master Servicer and the NIMs Insurer, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing
Servicer") may make all or a portion of the Advances and/or Servicing Advances
to the Trust Fund under this Agreement, although no such facility shall reduce
or otherwise affect the Master Servicer's obligation to fund such Advances
and/or Servicing Advances. To the extent that an Advancing Servicer makes all or
a portion of any Advance or any Servicing Advance and provides the Trustee with
notice acknowledged by the Servicer that such Advancing Servicer is entitled to
reimbursement, such Advancing Servicer shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.29(b). Such notice from the Advancing Servicer must specify the
amount of the reimbursement and must specify which Section of this Agreement
permits the applicable Advance or Servicing Advance to be reimbursed. The
Trustee shall be entitled to rely without independent investigation on the
Advancing Servicer's statement with respect to the amount of any reimbursement
pursuant to this Section 3.29 and with respect to the Advancing Servicer's
statement with respect to the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed. An Advancing Servicer
whose obligations are limited to the making of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Section 6.06 hereof and will not be deemed to be a
Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Servicer by the Trust Fund would not materially
and adversely affect the interests of any Certificateholder, then the NIMs
Insurer shall not withhold its consent to the Trust Fund's entering such
facility.

         (b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 3.11(ii),
Section 3.11(iii), Section 3.11(v), Section 3.11(vi)

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Section 3.11(vii) and Section 4.04(b) prior to the remittance to the Trust Fund,
but instead the Master Servicer shall include such amounts in the applicable
remittance to the Trustee made pursuant to Section 3.10(a). The Trustee is
hereby authorized to pay to the Advancing Servicer, reimbursements for Advances
and Servicing Advances from the Distribution Account to the same extent the
Master Servicer would have been permitted to reimburse itself for such Advances
and/or Servicing Advances in accordance with Section 3.11(ii), Section
3.11(iii), Section 3.11(v), Section 3.11(vi), Section 3.11(vii) or Section
4.04(b), as the case may be, had the Master Servicer itself funded such Advance
or Servicing Advance. The Trustee is hereby authorized to pay directly to the
Advancing Servicer 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.

         Section 3.30.     PMI POLICY; CLAIMS UNDER THE PMI POLICY.

         Notwithstanding anything to the contrary elsewhere in this Article III,
the Master Servicer shall not agree to any modification or assumption of a PMI
Mortgage Loan or take any other action with respect to a PMI Mortgage Loan that
could result in denial of coverage under the PMI Policy. The Master Servicer
shall notify the PMI Insurer that the Trustee, on behalf of the
Certificateholders, is the Insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. Consistent with all rights and obligations hereunder, the
Master Servicer shall take all actions required under the PMI Policy as a
condition to the payment of any such claim. Any amount received from the PMI
Insurer with respect to any such PMI Mortgage Loan shall be deposited by the
Master Servicer, no later than two Business Days following receipt thereof, into
the Collection Account.

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                                   ARTICLE IV

                                  FLOW OF FUNDS

         Section 4.01.     DISTRIBUTIONS.

         (a) On the first Distribution Date, the Initial Deposit will be
transferred from the Initial Deposit Account to the Distribution Account for
inclusion in the Available Funds for such Distribution Date. On each
Distribution Date, the Trustee shall withdraw from the Distribution Account that
portion of Available Funds for such Distribution Date consisting of the Interest
Remittance Amount for such Distribution Date, and make the following
disbursements and transfers in the order of priority described below, in each
case to the extent of the Interest Remittance Amount remaining for such
Distribution Date:

                  (i) to the Holders of the Class A Certificates, the Monthly
         Interest Distributable Amount for such Class for such Distribution
         Date;

                  (ii) to the Holders of the Class A Certificates, the Unpaid
         Interest Shortfall Amount, if any, for such Class for such Distribution
         Date;

                  (iii) to the Holders of the Class M-1 Certificates, the
         Monthly Interest Distributable Amount allocable to such Certificates;

                  (iv) to the Holders of the Class M-2 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates; and

                  (v) to the Holders of the Class M-3 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates.

         (b) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:

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

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

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

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

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

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

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

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

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

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

                  (i) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, in an
         amount equal to any Extra Principal Distribution Amount, payable to
         such Holders as part of the Principal Distribution Amount as described
         under Section 4.01(b) and Section 4.01(c) above;

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

                  (iii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (iv) to the Holders of the Class M-2 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

                  (v) to the Holders of the Class M-2 Certificates, in an amount
         equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (vi) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

                  (vii) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (viii) to the Reserve Fund, the amount of any Net WAC Rate
         Carryover Amount;

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                  (ix) to the PMI Insurer, any payments made under the PMI
         Policy, to the extent such payments were the result of incorrect data
         supplied to the PMI Insurer by the Originator;

                  (x) to the Holders of the Class C Certificates, the Monthly
         Interest Distributable Amount for such Class and any remaining
         Overcollateralization Release Amount for such Distribution Date;

                  (xi) if such Distribution Date follows the Prepayment Period
         during which occurs the latest date on which a Prepayment Charge may be
         required to be paid in respect of any Mortgage Loans, to the Holders of
         the Class P Certificates, in reduction of the Certificate Principal
         Balance thereof, until the Certificate Principal Balance thereof is
         reduced to zero; and

                  (xii) any remaining amounts to the Holders of the Residual
         Certificates (in respect of the appropriate Class R Interest).

         On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee will FIRST, withdraw from the
Reserve Fund all income from the investment of funds in the Reserve Fund and
distribute such amount to the Holders of the Class C Certificates, and SECOND,
withdraw from the Reserve Fund, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date and distribute such amount FIRST, to the Class A Certificates; SECOND, to
the Class M-1 Certificates; THIRD, to the Class M- 2 Certificates and FOURTH, to
the Class M-3 Certificates, in each case to the extent the Net WAC Carryover
Amount is allocable to each such Class.

         On each Distribution Date, all amounts received by the Trustee in
respect of payments made by the counterparty to the Yield Maintenance Agreement
will be distributed by the Trustee to the Holders of the Class C Certificates
and shall not be available for distribution to the Holders of any other Class of
Certificates. The payment of the foregoing amounts to the Holders of the Class C
Certificates shall not be applied as a payment of interest or to reduce the
Certificate Principal Balances thereof.

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Master Servicer Prepayment Charge Amounts paid by the Master Servicer
during the related Prepayment Period will be withdrawn from the Distribution
Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.

         (e) METHOD OF DISTRIBUTION. The Trustee shall make distributions in
respect of a Distribution Date to each Certificateholder of record on the
related Record Date (other than as provided in Section 10.01 respecting the
final distribution), in the case of Certificateholders of the Regular
Certificates, by check or money order mailed to such Certificateholder at the
address appearing in the Certificate Register, or by wire transfer.
Distributions among Certificateholders

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shall be made in proportion to the Percentage Interests evidenced by the
Certificates held by such Certificateholders.

         (f) DISTRIBUTIONS ON BOOK-ENTRY CERTIFICATES. Each distribution with
respect to a Book- Entry Certificate shall be paid to the Depository, which
shall credit 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. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor, the Master Servicer or the
Originator shall have any responsibility therefor except as otherwise provided
by applicable law.

         Section 4.02.     [RESERVED].

         Section 4.03.     STATEMENTS.

         (a) 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 NIMs Insurer, the
Master Servicer and the Rating Agencies, a statement as to the distributions
made on such Distribution Date:

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

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Regular Certificates (other than
         the Class P Certificates) allocable to interest, separately identified;

                  (iii) the Overcollateralized Amount, the Overcollateralization
         Release Amount, the Overcollateralization Deficiency Amount and the
         Overcollateralization Target Amount as of such Distribution Date and
         the Excess Overcollateralized Amount for the Mortgage Pool for such
         Distribution Date;

                  (iv) the aggregate amount of servicing compensation received
         by the Master Servicer with respect to the related Due Period and such
         other customary information as the Trustee deems necessary or
         desirable, or which a Certificateholder reasonably requests, to enable
         Certificateholders to prepare their tax returns;

                  (v) the aggregate amount of Advances for the related Due
         Period;

                  (vi) the Pool Balance at the Close of Business at the end of
         the related Due Period;

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                  (vii) the number, aggregate principal balance, weighted
         average remaining term to maturity and weighted average Mortgage Rate
         of the Mortgage Loans as of the related Determination Date and the
         number and aggregate principal balance of all Subsequent Mortgage Loans
         added during the preceding Prepayment Period;

                  (viii) the number and aggregate unpaid principal balance of
         Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in
         bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60
         to 89 days and (3) 90 or more days, (B) as to which foreclosure
         proceedings have been commenced and Delinquent (1) 30 to 59 days, (2)
         60 to 89 days and (3) 90 or more days, (C) in bankruptcy and Delinquent
         (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each
         case as of the Close of Business on the last day of the calendar month
         preceding such Distribution Date and (D) REO Properties;

                  (ix) [reserved];

                  (x) the total number and cumulative principal balance of all
         REO Properties as of the Close of Business of the last day of the
         preceding Prepayment Period;

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

                  (xii) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period and the cumulative amount of Realized
         Losses;

                  (xiii) the aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Collection Account for such Distribution
         Date;

                  (xiv) the Certificate Principal Balance of the Class A
         Certificates, the Mezzanine Certificates and the Class C Certificates,
         after giving effect to the distributions made on such Distribution
         Date;

                  (xv) the Monthly Interest Distributable Amount in respect of
         the Class A Certificates, the Mezzanine Certificates and the Class C
         Certificates for such Distribution Date and the Unpaid Interest
         Shortfall Amount, if any, with respect to the Class A Certificates, the
         Mezzanine Certificates and the Class C Certificates for 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 3.26;

                  (xvii) the Credit Enhancement Percentage for such Distribution
         Date;

                  (xviii) the Net WAC Rate Carryover Amount for the Class A
         Certificates and the Mezzanine Certificates, if any, for such
         Distribution Date and the amount remaining unpaid after reimbursements
         therefor on such Distribution Date;

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                  (xix) any Overcollateralization Target Amount,
         Overcollateralized Amount and Overcollateralization Deficiency Amount
         after giving effect to the distribution of principal on such
         Distribution Date;

                  (xx) when the Stepdown Date or a Trigger Event has occurred;

                  (xxi) the Available Funds;

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

                  (xxiii) (A) the amount of payments received related to claims
         under the PMI Policy during the related Prepayment Period (and the
         number of Mortgage Loans to which such payments related) and (B) the
         cumulative amount of payments received related to claims under the PMI
         Policy since the Closing Date (and the number of Mortgage Loans to
         which such payments related);

                  (xxiv) (A) the dollar amount of claims made under the PMI
         Policy that were denied during the Prepayment Period (and the number of
         Mortgage Loans to which such denials related) and (B) the dollar amount
         of the cumulative claims made under the PMI Policy that were denied
         since the Closing Date (and the number of Mortgage Loans to which such
         denials related);

                  (xxv) the amount on deposit in the Pre-Funding Account, the
         Interest Coverage Account and the Reserve Fund; and

                  (xxvi) for the distribution occurring on the Distribution Date
         immediately following the end of the Funding Period, the balance on
         deposit in the Pre-Funding Account that has not been used to purchase
         Subsequent Mortgage Loans and that is being distributed to the Class A
         Certificates as a mandatory prepayment of principal, if any, on such
         Distribution Date.

         The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMs Insurer 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 option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.

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         In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.

         (b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to the NIMs Insurer and
each Person who at any time during the calendar year was a Certificateholder of
a Regular Certificate, if requested in writing by such Person, such information
as is reasonably necessary to provide to such Person 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
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.

         (c) On each Distribution Date, the Trustee shall forward to the NIMs
Insurer and the Class R Certificateholders a copy of the reports forwarded to
the Regular Certificateholders in respect of such Distribution Date with such
other information as the Trustee deems necessary or appropriate.

         (d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall deliver to the NIMs Insurer and each Person who at any
time during the calendar year was a Class R Certificateholder, if requested in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information provided pursuant to the
previous paragraph aggregated for such calendar year or applicable portion
thereof during which such Person was a Class R Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished to
Certificateholders by the Trustee pursuant to any requirements of the Code as
from time to time in force.

         Section 4.04.     REMITTANCE REPORTS; ADVANCES.

         (a) On the second Business Day following each Determination Date but in
no event later than the earlier of (i) such date which would allow the indenture
trustee to submit a claim to the NIMs Insurer under the Indenture so as to allow
a timely payment by the NIMs Insurer under the insurance policy related to the
notes insured by the NIMs Insurer and (ii) the 20th day of each month (or if
such 20th day is not a Business Day, the preceding Business Day), the Master
Servicer shall deliver to the Trustee and the NIMs Insurer by telecopy or
electronic mail (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; provided, however, that the Remittance Report will not
contain information concerning the PMI Mortgage Loans until such time as the
Master Servicer has provided the PMI Insurer with complete information
concerning the PMI Mortgage Loans. Not later than the 20th day of each month (or
if such 20th day is not a Business Day, the preceding Business Day), the Master
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to

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Certificateholders contemplated by Section 4.03. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.

         (b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis 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. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan.

         On or before 3:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.04, used by the Master Servicer in
discharge of any such Advance) or (iii) in the form of any combination of (i)
and (ii) aggregating the total amount of Advances to be made by the Master
Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held
for future distribution used by the Master Servicer to make an Advance as
permitted in the preceding sentence or withdrawn by the Master Servicer as
permitted in Section 3.11(a)(ii) in reimbursement of Advances previously made
shall be appropriately reflected in the Master Servicer's records and replaced
by the Master Servicer by deposit in the Collection Account on or before any
future Master Servicer Remittance Date to the extent that the Available Funds
for the related Distribution Date (determined without regard to Advances to be
made on the Master Servicer Remittance Date) shall be less than the total amount
that would be distributed to the Classes of Certificateholders pursuant to
Section 4.01 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances or reimburse for previously
made Advances. The Trustee will provide notice to the NIMs Insurer and the
Master Servicer by telecopy by the Close of Business on any Master Servicer
Remittance Date in the event that the amount remitted by the Master Servicer to
the Trustee on such date is less than the Advances required to be made by the
Master Servicer for the related Distribution Date, as set forth in the related
Remittance Report.

         (c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon.

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

         Section 4.05.     PRE-FUNDING ACCOUNT.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Pre-Funding Account, Wells Fargo Bank Minnesota, N.A., as
trustee for the registered holders of Option One Mortgage Loan Trust 2001-2,
Asset-Backed Certificates, Series 2001-2" (the "Pre-Funding Account"). The
Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account and
retain therein the Original Pre-Funded Amount remitted on the Closing Date to
the Trustee by the Depositor. Funds deposited in the Pre-Funding Account shall
be held in trust by the Trustee for the Certificateholders for the uses and
purposes set forth herein.

                  (b) The Trustee will invest funds deposited in the Pre-Funding
Account as directed by the Master Servicer in Permitted Investments with a
maturity date (i) no later than the Business Day immediately preceding the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment, (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee or an Affiliate manages or advises such investment or (iii) within one
Business Day of the Trustee's receipt thereof. For federal income tax purposes,
the Master Servicer shall be the owner of the Pre-Funding Account and shall
report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Pre-Funding
Account shall be transferred to the Interest Coverage Account at the following
times: (i) on the Business Day immediately preceding each Distribution Date, if
a Person other than the Trustee or an Affiliate of the Trustee manages or
advises such investment, or on each Distribution Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment, (ii) on the
Business Day immediately preceding each Subsequent Transfer Date, if a Person
other than the Trustee or an Affiliate of the Trustee manages or advises such
investment, or on each Subsequent Transfer Date, if the Trustee or an Affiliate
of the Trustee manages or advises such investment or (iii) within one Business
Day of the Trustee's receipt thereof. The Master Servicer shall deposit in the
Pre-Funding Account the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor. At no time will the Pre-Funding Account be an asset
of any REMIC created hereunder.

                  (c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:

                  (i) On any Subsequent Transfer Date, the Trustee shall
         withdraw from the Pre- Funding Account an amount equal to 100% of the
         Stated Principal Balances of the Subsequent Mortgage Loans transferred
         and assigned to the Trustee for deposit in the

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         Mortgage Pool on such Subsequent Transfer Date and pay such amount to
         or upon the order of the Depositor upon satisfaction of the conditions
         set forth in Section 2.08 with respect to such transfer and assignment;

                  (ii) If the amount on deposit in the Pre-Funding Account
         (exclusive of investment income) has not been reduced to zero during
         the Funding Period, on the day immediately following the termination of
         the Funding Period, the Trustee shall deposit into the Distribution
         Account any amounts remaining in the Pre-Funding Account (exclusive of
         investment income) for distribution in accordance with the terms
         hereof;

                  (iii) To withdraw any amount not required to be deposited in
         the Pre-Funding Account or deposited therein in error; and

                  (iv) To clear and terminate the Pre-Funding Account upon the
         earlier to occur of (A) the Distribution Date immediately following the
         end of the Funding Period and (B) the termination of this Agreement,
         with any amounts remaining on deposit therein being paid to the Holders
         of the Certificates then entitled to distributions in respect of
         principal.

         Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC 1 on the date of withdrawal.

         Section 4.06.     INTEREST COVERAGE ACCOUNT.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Interest Coverage Account, Wells Fargo Bank Minnesota,
N.A., as trustee for the registered holders of Option One Mortgage Loan Trust
2001-2, Asset-Backed Certificates, Series 2001-2" (the "Interest Coverage
Account"). The Trustee shall, promptly upon receipt, deposit in the Interest
Coverage Account and retain therein the Interest Coverage Amount remitted on the
Closing Date to the Trustee by the Depositor. Funds deposited in the Interest
Coverage Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.

                  (b) For federal income tax purposes, the Master Servicer shall
be the owner of the Interest Coverage Account and shall report all items of
income, deduction, gain or loss arising therefrom. At no time will the Interest
Coverage Account be an asset of any REMIC created hereunder. All income and gain
realized from investment of funds deposited in the Interest Coverage Account
shall be for the sole and exclusive benefit of the Master Servicer and shall be
remitted by the Trustee to the Master Servicer no later than the first Business
Day following receipt of such income and gain by the Trustee. The Master
Servicer shall deposit in the Interest Coverage Account the amount of any net
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss.

                  (c) On each Distribution Date during the Funding Period and on
the Distribution Date immediately following the end of the Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Distribution Account an amount equal to 30 days' interest on the excess, if any,
of the Original Pre-Funded Amount over the aggregate Principal

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Balance of Subsequent Mortgage Loans that both (i) had a Due Date during the Due
Period relating to such Distribution Date and (ii) had a Subsequent Cut-off Date
prior to the first day of the month in which such Distribution Date occurs, at a
per annum rate equal to the Pass-Through Rate of the Class A Certificates and
the Mezzanine Certificates for such Distribution Date, with the Pass-Through
Rate on the Class A Certificates and the Mezzanine Certificates, solely for the
purposes of the foregoing calculation, each being multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period for such
Class for such Distribution Date, and the denominator of which is 30. Such
withdrawal and deposit shall be treated as a contribution of cash by the Master
Servicer to REMIC 1 and REMIC 2 on the date thereof with REMIC 2 receiving that
portion of the contribution, if any, to the extent that the rate of LIBOR used
to calculate the Pass-Through Rate on the Class A Certificates and the Mezzanine
Certificates for such Distribution Date exceeds 4.47125% per annum. Immediately
following any such withdrawal and deposit, and immediately following the
conveyance of any Subsequent Mortgage Loans to the Trust on any Subsequent
Transfer Date, the Trustee shall withdraw from the Interest Coverage Account and
remit to the Master Servicer or its designee an amount equal to the excess, if
any, of the amount remaining in such Interest Coverage Account over the amount
that would be required to be withdrawn therefrom (assuming sufficient funds
therein) pursuant to the preceding sentence on each subsequent Distribution
Date, if any, that will occur during the Funding Period or that will be the
Distribution Date immediately following the end of the Funding Period, if no
Subsequent Mortgage Loans were acquired by the Trust Fund after the end of the
Prepayment Period relating to the current Distribution Date (assuming that LIBOR
remains constant at the level of LIBOR applicable to the calculation of the
Pass-Through Rate for the Class A Certificates and the Mezzanine Certificates
for the current Distribution Date).

                  (d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balances of the Certificates to zero or (iii) the termination of this
Agreement in accordance with Section 10.01, any amount remaining on deposit in
the Interest Coverage Account after distributions pursuant to paragraph (c)
above shall be withdrawn by the Trustee and paid to the Master Servicer or its
designee.

         Section 4.07.     DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS.

         (a) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 1 to REMIC 2
on account of the REMIC 1 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-1 Interest), as the case may be:

                  (i) first, to the extent of Available Funds, to Holders of
         REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1
         Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular
         Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular
         Interest LT1P, PRO RATA, in an amount equal to (A) the Uncertificated
         Accrued Interest for such Distribution Date, plus (B) any amounts in
         respect thereof remaining unpaid from previous Distribution Dates.
         Amounts payable as Uncertificated Accrued Interest in respect of REMIC
         1 Regular Interest LT1F shall be reduced when the REMIC 1
         Overcollateralized Amount is less than the REMIC 1 Target
         Overcollateralized

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         Amount, by the lesser of (x) the amount of such difference and (y) the
         Maximum LT1F Uncertificated Accrued Interest Deferral Amount; and

                  (ii) second, to the Holders of REMIC 1 Regular Interests, in
         an amount equal to the remainder of the Available Funds for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, allocated as follows:

                           (a) to the Holders of REMIC 1 Regular Interest LT1A,
                  98.00% of such remainder, until the Uncertificated Principal
                  Balance of such Uncertificated REMIC 1 Regular Interest is
                  reduced to zero;

                           (b) to the Holders of REMIC 1 Regular Interest LT1B,
                  REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D
                  and REMIC 1 Regular Interest LT1E, 1.00% of such remainder, in
                  the same proportion as principal payments are allocated to the
                  Corresponding Certificates, until the Uncertificated Principal
                  Balances of such REMIC 1 Regular Interests are reduced to
                  zero;

                           (c) to the Holders of REMIC 1 Regular Interest LT1F,
                  1.00% of such remainder, until the Uncertificated Principal
                  Balance of such REMIC 1 Regular Interest is reduced to zero;

                           (d) to the Holders of REMIC 1 Regular Interest LT1P,
                  on the Distribution Date immediately following the expiration
                  of the latest Prepayment Charge as identified on the
                  Prepayment Charge Schedule or any Distribution Date thereafter
                  until $100 has been distributed pursuant to this clause; then

                           (e) any remaining amount to the Holders of the Class
                  R Certificates (in respect of the Class R-1 Interest);

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated to
Holders of REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1F,
respectively.

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest LT1P.
The payment of the foregoing amounts to the Holders of REMIC 1 Regular Interest
LT1P shall not reduce the Uncertificated Principal Balance thereof.

         Section 4.08.     ALLOCATION OF REALIZED LOSSES.

         (a) All Realized Losses on the Mortgage Loans allocated to any Regular
Certificate shall be allocated by the Trustee on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates,
until the Certificate Principal Balance

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thereof has been reduced to zero; and fifth, to the Class M-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero. All
Realized Losses to be allocated to the Certificate Principal Balances of all
Classes on any Distribution Date shall be so allocated after the actual
distributions to be made on such date as provided above. All references above to
the Certificate Principal Balance of any Class of Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to such Class of Certificates, on such Distribution Date.

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

         (b) All Realized Losses on the Mortgage Loans shall be deemed to have
been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT1A and
REMIC 1 Regular Interest LT1F up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A and REMIC 1
Regular Interest LT1F up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 1%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest
LT1E and REMIC 1 Regular Interest LT1F, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1D and REMIC 1 Regular
Interest LT1F, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1D has been reduced to zero; and fifth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1C and REMIC 1 Regular Interest LT1F, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1C has been reduced to zero.

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                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01.     THE CERTIFICATES.

         Each of the Class A Certificates, the Mezzanine Certificates, the Class
P Certificates, the Class C Certificates and the Class R Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the Trustee
of the Trust Fund. The Class A Certificates and the Mezzanine Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $50,000 and integral dollar
multiples of $1.00 in excess thereof, except that one Certificate of each such
Class of Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date. The Class P
Certificates, the Class C Certificates and the Class R Certificates are issuable
in any Percentage Interests; PROVIDED, HOWEVER, that the sum of all such
percentages for each such Class totals 100% and no more than ten Certificates of
each Class may be issued.

         The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.

         Section 5.02.     REGISTRATION OF TRANSFER AND EXCHANGE OF
                           CERTIFICATES.

         (a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.

         Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on

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behalf of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.

         At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
with respect to each Class R Certificate, the holder thereof may exchange, in
the manner described above, such Class R Certificate for two separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-1 Interest and the Class R-2 Interest, respectively, in each case
that was evidenced by the Class R Certificate being exchanged.

         (b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.

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         (c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Termination, the Certificate Owners of the Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51%
advise the Trustee and Depository through the Financial Intermediaries and the
Depository Participants in writing that the continuation of a book-entry system
through the Depository to the exclusion of definitive, fully registered
certificates (the "Definitive Certificates") to Certificate Owners is no longer
in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (ii) above, or the
Master Servicer's expense, in the case of (i) and (iii) above, execute on behalf
of the Trust and authenticate the Definitive Certificates. Neither the Depositor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee, the
Certificate Registrar, the Master Servicer, any Paying Agent and the Depositor
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

         (d) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate or Class R Certificate shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. In the event of any
such transfer, except with respect to the initial transfer of any Class C
Certificate, Class P Certificate or Class R Certificates by the Depositor (i)
unless such transfer is made in reliance upon Rule 144A (as evidenced by the
investment letter delivered to the Trustee, in substantially the form attached
hereto as Exhibit J) under the 1933 Act, the Trustee and the Depositor shall
require a written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trustee and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the 1933 Act or is being
made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor or (ii) the Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached hereto
as Exhibit L) and the transferee to execute an investment letter (in
substantially the form attached hereto as Exhibit J) acceptable to and in form
and substance reasonably satisfactory to the Depositor and the Trustee
certifying to the Depositor and the Trustee the facts surrounding such transfer,
which investment letter shall not be an expense of the Trustee or the Depositor.
The Holder of a Class C Certificate, Class P Certificate or Class R Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

         Each Transferee of a Mezzanine Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59 , 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000) (the

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"Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60, and (iii) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied.

         No transfer of a Class C Certificate, Class P Certificate or Class R
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless 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 of the Depositor, the Master Servicer, the Trustee or
the Trust Fund. An Opinion of Counsel 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. The Yield Maintenance Agreement shall be deemed a
separate subtrust and shall not be an asset of the subtrust portion of the Trust
Fund which is the investment pool from which the Class A Certificates and Class
M Certificates are being paid.

         If any Class C Certificate, Class P Certificate or Class R Certificate
or any interest therein is acquired or held in violation of the provisions of
the second 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 NIMs
Insurer, the Trustee and the Trust from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

         Each Person who has or who acquires any Ownership Interest in a Class R
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 appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Class R Certificate are expressly subject to the following
provisions:

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                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class R 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.

                  (ii) No Person shall acquire an Ownership Interest in a Class
         R Certificate unless such Ownership Interest is a PRO RATA undivided
         interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Class R Certificate, the Trustee shall as a
         condition to registration of the transfer, require delivery to it, in
         form and substance satisfactory to it, of each of the following:

                           A. an affidavit in the form of Exhibit K hereto from
                  the proposed transferee to the effect that such transferee is
                  a Permitted Transferee and that it is not acquiring its
                  Ownership Interest in the Class R Certificate that is the
                  subject of the proposed transfer as a nominee, trustee or
                  agent for any Person who is not a Permitted Transferee; and

                           B. a covenant of the proposed transferee to the
                  effect that the proposed transferee agrees to be bound by and
                  to abide by the transfer restrictions applicable to the Class
                  R Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported transferee. If any purported transferee shall, in
         violation of the provisions of this Section, become a Holder of a Class
         R Certificate, then the prior Holder of such Class R Certificate that
         is a Permitted Transferee shall, upon discovery that the registration
         of transfer of such Class R Certificate was not in fact permitted by
         this Section, be restored to all rights as Holder thereof retroactive
         to the date of registration of transfer of such Class R Certificate.
         The Trustee shall be under no liability to any Person for any
         registration of transfer of a Class R Certificate that is in fact not
         permitted by this Section or for making any distributions due on such
         Class R Certificate to the Holder thereof or taking any other action
         with respect to such Holder under the provisions of this Agreement so
         long as the Trustee received the documents specified in clause (iii).
         The Trustee shall be entitled to recover from any Holder of a Class R
         Certificate that was in fact not a Permitted Transferee at the time
         such distributions were made all distributions made on such Class R
         Certificate. Any such distributions so recovered by the Trustee shall
         be distributed and delivered by the Trustee to the prior Holder of such
         Class R Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee shall have the right but
         not the obligation, without notice to the Holder of such Class R
         Certificate or any other Person having an Ownership Interest therein,
         to notify the Depositor to arrange for the sale of such Class R
         Certificate. The proceeds of such sale, net of commissions (which may
         include commissions payable to the Depositor or its affiliates in
         connection with such sale), expenses and taxes due, if any, will be
         remitted by the Trustee

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         to the previous Holder of such Class R Certificate that is a Permitted
         Transferee, except that in the event that the Trustee determines that
         the Holder of such Class R Certificate may be liable for any amount due
         under this Section or any other provisions of this Agreement, the
         Trustee may withhold a corresponding amount from such remittance as
         security for such claim. The terms and conditions of any sale under
         this clause (v) shall be determined in the sole discretion of the
         Trustee and it shall not be liable to any Person having an Ownership
         Interest in a Class R Certificate as a result of its exercise of such
         discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee upon receipt of
         reasonable compensation will provide to the Internal Revenue Service,
         and to the persons specified in Sections 860E(e)(3) and (6) of the
         Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of residual interests to
         disqualified organizations.

         The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trustee and the NIMs Insurer, in form and substance
satisfactory to the Trustee and the NIMs Insurer, (i) written notification from
each Rating Agency that the removal of the restrictions on transfer set forth in
this Section will not cause such Rating Agency to downgrade its rating of the
Certificates and (ii) an Opinion of Counsel to the effect that such removal will
not cause any REMIC created hereunder to fail to qualify as a REMIC.

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

         All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Certificate Registrar and disposed of pursuant to its
standard procedures.

         Section 5.03.     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor, the NIMs Insurer and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

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         Section 5.04.     PERSONS DEEMED OWNERS.

         The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, the
Certificate Registrar, any Paying Agent and any agent of the Master Servicer,
the Depositor, the Trustee, the NIMs Insurer, the Certificate Registrar, any
Paying Agent or the Trustee may treat the Person, including a Depository, 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 Master Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.

         Section 5.05.     APPOINTMENT OF PAYING AGENT.

         (a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the NIMs Insurer.

         (b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.

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                                   ARTICLE VI

                      THE MASTER SERVICER AND THE DEPOSITOR

         Section 6.01.     LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR.

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

         Section 6.02.     MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
                           OBLIGATIONS OF, THE MASTER SERVICER OR THE DEPOSITOR.

         Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, 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 Master Servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor Master Servicer.

         Section 6.03.     LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
                           OTHERS.

         Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; PROVIDED, FURTHER, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The preceding sentence shall not limit the obligations of the
Master Servicer pursuant to Section 8.05. The Master Servicer and any director
or officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind PRIMA FACIE properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer and any
director or officer or employee or agent of the Master Servicer shall be
indemnified by the Trust and held harmless 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 related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder. The

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Master Servicer may undertake any such action which it may deem necessary or
desirable in respect of 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, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust 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. The Master Servicer's right to indemnity or reimbursement
pursuant to this Section shall survive any resignation or termination of the
Master Servicer pursuant to Section 6.04 or 7.01 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or termination
(or arising from events that occurred prior to such resignation or termination).
This paragraph shall apply to the Master Servicer solely in its capacity as
Master Servicer hereunder and in no other capacities.

         The Master Servicer (except the Trustee if it is required to succeed
the Master Servicer hereunder) indemnifies and holds the Trustee, the Depositor,
the NIMs Insurer and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor, the NIMs Insurer and any Certificateholder may sustain in any way
related to the failure of the Master Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Master
Servicer shall immediately notify the Trustee, the Depositor, the NIMs Insurer
and each Certificateholder if a claim is made that may result in such claims,
losses, penalties, fines, forfeitures, legal fees or related costs, judgments,
or any other costs, fees and expenses, and the Master Servicer shall assume
(with the consent of the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Master Servicer, the Trustee, the Depositor, the NIMs Insurer and/or
Certificateholder in respect of such claim. The provisions of this paragraph
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.

         Section 6.04.     MASTER SERVICER NOT TO RESIGN.

         Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor servicer to the Trustee and the NIMs Insurer in writing and
such proposed successor servicer is reasonably acceptable to the Trustee and the
NIMs Insurer and (b) each Rating Agency shall have delivered a letter to the
Trustee and the NIMs Insurer prior to the appointment of the successor servicer
stating that the proposed appointment of such successor servicer as Master
Servicer hereunder will not result in the reduction or withdrawal of the then
current rating of the Certificates; PROVIDED, HOWEVER, that no such resignation
by the Master Servicer shall become

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effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated, with the consent of
the NIMs Insurer, a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Master Servicer of responsibility for any of
the obligations specified in Sections 7.01 and 7.02 as obligations that survive
the resignation or termination of the Master Servicer. Any such determination
permitting the resignation of the Master Servicer pursuant to clause (i) above
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee and the NIMs Insurer. Any such determination permitting the resignation
of the Master Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMs Insurer.

         Section 6.05.     DELEGATION OF DUTIES.

         In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. Except as provided in Section 3.02, no such delegation is permitted that
results in the delegee subservicing any Mortgage Loans. The Master Servicer
shall provide the Trustee and the NIMs Insurer with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Master Servicer's Affiliates or their respective successors and assigns.

         Section 6.06.     [RESERVED].

         Section 6.07.     INSPECTION.

         The Master Servicer, in its capacity as Originator and Master Servicer,
shall afford the Trustee and the NIMs Insurer, upon reasonable advance notice,
during normal business hours, access to all records maintained by the Master
Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish to the Trustee and the NIMs Insurer its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.

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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01.     MASTER SERVICER EVENTS OF TERMINATION.

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

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

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

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

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

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

                  (v) A Delinquency Master Servicer Termination Trigger has
         occurred and is continuing;

         (b) then, and in each and every such case, so long as a Master Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 5:00 P.M., New York time, on the Business Day immediately following the
Master Servicer Remittance Date (provided the Trustee shall give the Master
Servicer notice of such failure to advance by 5:00 P.M. New York time on the
Master Servicer Remittance Date), the Trustee shall terminate all of the rights
and obligations of the Master Servicer under this Agreement and the Trustee, or
a successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Master Servicer, (y) in the case of (i)(B), (ii), (iii) and (iv)
above, the Trustee shall, at the written direction of the NIMs Insurer or the
Holders of each Class of Regular Certificates evidencing Percentage Interests
aggregating not less than 51%, by notice then given in writing to the Master
Servicer and to the Trustee and (z) in the case of (v) above, the Trustee shall,
at the direction of the NIMs Insurer, by notice then given in writing to the
Master Servicer and to the Trustee, terminate all of the rights and obligations
of the Master Servicer as servicer under this Agreement. Any such notice to the
Master Servicer shall also be given to each Rating Agency, the Depositor and the
Originator. On or after the receipt by the Master Servicer (and by the Trustee
if such notice is given by the Holders) of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect to
the Certificates or the Mortgage Loans or otherwise, shall pass to and be vested
in the Trustee pursuant to and under this Section; and, without limitation, and
the Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the Master Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of each Mortgage Loan and
related documents or otherwise. The Master Servicer agrees to cooperate with the
Trustee (or the applicable successor Master Servicer) in effecting the
termination of the responsibilities and rights of the Master Servicer hereunder,
including, without limitation, the delivery to the Trustee of all documents and
records requested by it to enable it to assume the Master Servicer's functions
under this Agreement within ten Business Days subsequent to such notice, the
transfer within one Business Day subsequent to such notice to the Trustee (or
the applicable successor Master Servicer) for the administration by it of all
cash amounts that shall at the time be held by the Master Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer with
respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Mortgage Files to the successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section shall be paid by the predecessor Master
Servicer (or if the predecessor Master Servicer is the Trustee, the initial
Master Servicer) upon presentation of reasonable documentation of such costs and
expenses and to the extent not paid by the Master Servicer, by the Trust.

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         Section 7.02.     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         (a) Within 90 days of the time the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor Master Servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Master Servicer in its capacity as 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 placed on the
Master Servicer by the terms and provisions hereof arising on and after its
succession. Notwithstanding the foregoing, the parties hereto agree that the
Trustee, in its capacity as successor Master Servicer, immediately will assume
all of the obligations of the Master Servicer to make advances. Notwithstanding
the foregoing, the Trustee, in its capacity as successor Master Servicer, shall
not be responsible for the lack of information and/or documents that it cannot
obtain through reasonable efforts. As compensation therefor, the Trustee (or
such other successor Master Servicer) shall be entitled to such compensation as
the Master Servicer would have been entitled to hereunder if no such notice of
termination had been given. Notwithstanding the above, (i) if the Trustee is
unwilling to act as successor Master Servicer or (ii) if the Trustee is legally
unable so to act, the Trustee shall appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
bank or other mortgage loan or home equity loan servicer having a net worth of
not less than $50,000,000 as the successor to the Master Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder; PROVIDED, that the appointment of any such
successor Master Servicer shall be approved by the NIMs Insurer (such approval
not to be unreasonably withheld), as evidenced by the prior written consent of
the NIMs Insurer, and will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Master Servicer hereunder, unless the Trustee
is prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to indemnify the Trustee or the NIMs Insurer
pursuant to Section 6.03), nor shall any successor Master Servicer be liable for
any acts or omissions of the predecessor Master Servicer or for any breach by
such Master Servicer of any of its representations or warranties contained
herein or in any related document or agreement. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. All Servicing Transfer Costs shall be paid by
the predecessor Master Servicer upon presentation of reasonable documentation of
such costs, and if such predecessor Master Servicer defaults in its obligation
to pay such costs, such costs shall be paid by the successor Master Servicer or
the Trustee (in which case the successor Master Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).

         (b) Any successor to the Master Servicer, including the Trustee, shall
during the term of its service as servicer continue to service and administer
the Mortgage Loans for the benefit of

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Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and a Fidelity Bond in respect of its officers, employees and
agents to the same extent as the Master Servicer is so required pursuant to
Section 3.14.

         Section 7.03.     WAIVER OF DEFAULTS.

         The Majority Certificateholders may, on behalf of all
Certificateholders and with the consent of the NIMs Insurer, waive any events
permitting removal of the Master Servicer as servicer pursuant to this Article
VII, PROVIDED, HOWEVER, that the Majority Certificateholders may not waive a
default in making a required distribution on a Certificate without the consent
of the Holder of such Certificate and the consent of the NIMs Insurer. Upon any
waiver of a past default, such default shall cease to exist and any Master
Servicer Event of Termination arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to the Rating Agencies and the NIMs Insurer.

         Section 7.04.     NOTIFICATION TO CERTIFICATEHOLDERS.

         (a) Upon any termination or appointment of a successor to the Master
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register, the NIMs Insurer and each
Rating Agency.

         (b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Master Servicer Event of Termination for five Business 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 Certificateholders and to the NIMs Insurer
notice of such occurrence unless such default or Master Servicer Event of
Termination shall have been waived or cured.

         Section 7.05.     SURVIVABILITY OF MASTER SERVICER LIABILITIES.

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

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                                  ARTICLE VIII

                                   THE TRUSTEE

         Section 8.01.     DUTIES OF TRUSTEE.

         The Trustee, prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has knowledge, 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 man would exercise or use under the circumstances
in the conduct of his own affairs.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders and the NIMs Insurer.

         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; PROVIDED, HOWEVER, that:

                  (i) prior to the occurrence of a Master Servicer Event of
         Termination, and after the curing of all such Master Servicer Events of
         Termination 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 and
         conforming to the requirements of this Agreement;

                  (ii) the Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless it shall be proved that the Trustee was negligent in
         ascertaining or investigating the facts related thereto;

                  (iii) the Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMs Insurer or the
         Majority Certificateholders relating to the time, method and place of

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         conducting any proceeding for any remedy available to the Trustee, or
         exercising or omitting to exercise any trust or power conferred upon
         the Trustee, under this Agreement; and

                  (iv) the Trustee shall not be charged with knowledge of any
         failure by the Master Servicer to comply with the obligations of the
         Master Servicer referred to in clauses (i) and (ii) of Section 7.01(a)
         unless a Responsible Officer of the Trustee at the Corporate Trust
         Office obtains actual knowledge of such failure or the Trustee receives
         written notice of such failure from the Master Servicer, the NIMs
         Insurer or the Majority Certificateholders.

         The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.

         Section 8.02.     CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a)      Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon, and shall be
         protected in acting or refraining from acting upon, any resolution,
         Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties, and the manner of obtaining consents and
         of evidencing the authorization of the execution thereof by
         Certificateholders shall be subject to such reasonable regulations as
         the Trustee may prescribe;

                  (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 be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation hereunder or in relation
         hereto, at the request, order or direction of any of the
         Certificateholders or the NIMs Insurer, pursuant to the provisions of
         this Agreement, unless such Certificateholders or the NIMs Insurer, as
         applicable, shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which may be
         incurred therein or thereby; the right of the Trustee to perform any
         discretionary act enumerated in this Agreement shall not be construed
         as a duty, and the Trustee shall not be answerable for other than its
         negligence or willful misconduct in the performance of any such act;

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                  (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
         Termination and after the curing of all Master Servicer Events of
         Termination 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
         documents, unless requested in writing to do so by the NIMs Insurer or
         the Majority Certificateholder; PROVIDED, HOWEVER, that if the payment
         within a reasonable time to the Trustee of the costs, expenses or
         liabilities likely to be incurred by it in the making of such
         investigation is, in the opinion of the Trustee, not reasonably assured
         to the Trustee by the security afforded to it by the terms of this
         Agreement, the Trustee may require reasonable indemnity against such
         cost, expense or liability as a condition to such proceeding. The
         reasonable expense of every such examination shall be paid by the
         Master Servicer or the NIMs Insurer (if requested by the NIMs Insurer)
         or, if paid by the Trustee, shall be reimbursed by the Master Servicer
         or the NIMs Insurer (if requested by the NIMs Insurer) upon demand and,
         if not reimbursed by the Master Servicer or the NIMs Insurer (if
         requested by the NIMs Insurer), shall be reimbursed by the Trust.
         Nothing in this clause (v) shall derogate from the obligation of the
         Master Servicer to observe any applicable law prohibiting disclosure of
         information regarding the Mortgagors;

                  (vi) the Trustee shall not be accountable, shall have no
         liability and makes no representation as to any acts or omissions
         hereunder of the Master Servicer until such time as the Trustee may be
         required to act as Master Servicer pursuant to Section 7.02 and
         thereupon only for the acts or omissions of the Trustee as successor
         Master Servicer;

                  (vii) 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 or a custodian; and

                  (viii) the right of the Trustee to perform any discretionary
         act enumerated in this Agreement shall not be construed as a duty, and
         the Trustee shall not be answerable for other than its negligence or
         willful misconduct in the performance of such act.

         Section 8.03.     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE
                           LOANS.

         The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature 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 Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer. The Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the

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maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor, the Originator, the Seller or the Master Servicer
with any warranty or representation made under this Agreement or in any related
document or the accuracy of any such warranty or representation prior to the
Trustee's receipt of notice or other discovery of any non-compliance therewith
or any breach thereof; any investment of monies by or at the direction of the
Master Servicer or any loss resulting therefrom, it being understood that the
Trustee shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02), any Sub-Servicer or any Mortgagor; any action of the Master
Servicer (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02), or any Sub- Servicer taken in the name of
the Trustee; the failure of the Master Servicer or any Sub-Servicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02); PROVIDED, HOWEVER, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement, including,
without limitation, the Trustee's duty to review the Mortgage Files pursuant to
Section 2.01. The Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder (unless the Trustee shall have become the successor Master
Servicer).

         Section 8.04.     TRUSTEE MAY OWN CERTIFICATES.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Master Servicer, the Depositor or their Affiliates.

         Section 8.05.     TRUSTEE FEE AND EXPENSES.

         The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee and, to the extent that the
funds therein are at anytime insufficient for such purpose, the Master Servicer
shall pay such fees. The Master Servicer (or the Depositor, if the Trustee
becomes the Master Servicer) will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ and any amounts paid by the
Trustee for the recording of Assignments of Mortgage pursuant to Section 2.01)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith or which is the responsibility of Certificateholders or
the Trustee hereunder. In addition, the Master Servicer (or the Depositor, if
the Trustee becomes the Master Servicer) covenants and agrees to

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indemnify the Trustee and its officers, directors, employees and agents from,
and hold it harmless against, any and all losses, liabilities, damages, claims
or expenses incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence of the
Trustee in the performance of its duties hereunder or by reason of the Trustee's
reckless disregard of obligations and duties hereunder. This section shall
survive termination of this Agreement or the resignation or removal of any
Trustee hereunder. If the Master Servicer (or the Depositor, if the Trustee
becomes the Master Servicer) defaults in its obligations to pay or reimburse the
Trustee any amount as required under this Section 8.05, the Trustee shall be
entitled to be paid or reimbursed such amount at any time from the assets of the
Trust Fund consisting of any amounts on deposit at such time in the Collection
Account or the Distribution Account.

         Section 8.06.     ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

         The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and a minimum long-term
debt rating of "Baa3" by Moody's, a long-term debt rating of at least "A-" and a
short-term debt rating of at least "A-1" by S&P, if rated by S&P, and subject to
supervision or examination by federal or state authority. If such entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to such Trustee and the NIMs Insurer at
the time such Trustee is appointed Trustee to the effect that the Trust will not
be a taxable entity under the laws of such state. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07.

         Section 8.07.     RESIGNATION OR REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the NIMs Insurer, the
Depositor, the Master Servicer and each Rating Agency. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor Trustee
acceptable to the NIMs Insurer by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
having 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 the NIMs Insurer or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a 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

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rehabilitation, conservation or liquidation, then the Depositor, the Master
Servicer or the NIMs Insurer may remove the Trustee. If the Depositor, the
Master Servicer or the NIMs Insurer removes the Trustee under the authority of
the immediately preceding sentence, the Depositor, with the consent of the NIMs
Insurer, shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.

         The Majority Certificateholders (or the NIMs Insurer upon the failure
of the Trustee to perform its obligations hereunder) may at any time remove the
Trustee by written instrument or instruments delivered to the Master Servicer,
the Depositor and the Trustee; the Depositor shall thereupon use its best
efforts to appoint a successor trustee acceptable to the NIMs Insurer in
accordance with this Section.

         Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 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 NIMs Insurer, the Depositor, the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee. The Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.

         No successor Trustee shall accept appointment as provided in this
Section 8.08 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 the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

         Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.

         Section 8.09.     MERGER OR CONSOLIDATION OF TRUSTEE.

         Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06

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and 8.08, 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 of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMs Insurer to act as co-trustee or co-trustees, jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee may
consider necessary or desirable. Any such co-trustee or separate trustee shall
be subject to the written approval of the Master Servicer and the NIMs Insurer.
If the Master Servicer and the NIMs Insurer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Master Servicer Event of Termination 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, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Master Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed hereunder.

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

                  (i) 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 (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (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 or any portion
         thereof in any such jurisdiction) shall be exercised and performed
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

                  (ii) no trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) the Master Servicer and the Trustee, acting jointly and
         with the consent of the NIMs Insurer, may at any time accept the
         resignation of or remove any separate trustee or co-trustee except that
         following the occurrence of a Master Servicer Event of Termination, the
         Trustee acting alone may accept the resignation or remove any separate
         trustee or co- trustee.

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         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 trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Master Servicer and the NIMs Insurer.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.

         Section 8.11.     LIMITATION OF LIABILITY.

         The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.

         Section 8.12.     TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
                           CERTIFICATES.

         (a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

         (b) The Trustee shall afford the Seller, the Originator, the Depositor,
the Master Servicer, the NIMs Insurer and each Certificateholder upon reasonable
notice during normal business hours, access to all records maintained by the
Trustee in respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. Upon request, the Trustee shall furnish
the Depositor, the Master Servicer, the NIMs Insurer and any requesting
Certificateholder with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Originator the Master Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Originator, the Master Servicer, the Depositor, the NIMs Insurer and such
Certificateholder for review and copying such books, documents or records as may
be requested with

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respect to the Trustee's duties hereunder. The Seller, the Originator, the
Depositor, the Master Servicer and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Trustee and
are not obligated to supervise the performance of the Trustee under this
Agreement or otherwise.

         Section 8.13.     SUITS FOR ENFORCEMENT.

         In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee, shall, at the direction of the Majority Certificateholders or the NIMs
Insurer, or may, proceed to protect and enforce its rights and the rights of the
Certificateholders or the NIMs Insurer under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee, the NIMs Insurer and the
Certificateholders.

         Section 8.14.     WAIVER OF BOND REQUIREMENT.

         The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.

         Section 8.15.     WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL
                           REQUIREMENT.

         The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.

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                                   ARTICLE IX

                              REMIC ADMINISTRATION

         Section 9.01.     REMIC ADMINISTRATION.

         (a) REMIC elections as set forth in the Preliminary Statement shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.

         (b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.

         (c) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Master Servicer in fulfilling its duties hereunder. The Master
Servicer shall be entitled to reimbursement of expenses to the extent provided
in clause (i) above from the Collection Account.

         (d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns as the direct representative each
REMIC created hereunder. The expenses of preparing and filing such returns shall
be borne by the Trustee.

         (e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the "Tax Matters Person") with respect to each REMIC
and shall act as Tax Matters Person for each REMIC. The Trustee, as agent for
the Tax Matters Person, shall perform on behalf of each REMIC all reporting and
other tax compliance duties that are the responsibility of such REMIC under the
Code, the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the Treasury
or other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions. The
Trustee, as agent for the Tax Matters Person, shall represent each REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC, enter into settlement agreements with any
government taxing agency, extend any statute of limitations relating to any item
of any REMIC and otherwise act on behalf of any REMIC in relation to any tax
matter involving the Trust.

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         (f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause the REMIC to take any action necessary to create
or maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Master Servicer nor the Holder of any Residual Certificate
shall take any action, cause any REMIC created hereunder 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 such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee, the NIMs Insurer and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such a tax. In addition, prior to taking any
action with respect to any REMIC created hereunder or the assets therein, or
causing such REMIC to take any action, which is not expressly permitted under
the terms of this Agreement, any Holder of a Residual Certificate will consult
with the Trustee, the NIMs Insurer and the Master Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any REMIC, and no such Person shall
take any such action or cause any REMIC to take any such action as to which the
Trustee, the NIMs Insurer or the Master Servicer has advised it in writing that
an Adverse REMIC Event could occur.

         (g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Master Servicer, the Master Servicer agrees to pay on behalf of
such REMIC when due, any and all state and local taxes imposed as a result of
such a determination, in the event that the Holder of the related Class R
Certificate fails to pay such taxes, if any, when imposed.

         (h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.

         (i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.

         (j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.

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         (k) On or before April 15 of each calendar year beginning in 2002, the
Master Servicer shall deliver to the NIMs Insurer, the Trustee and each Rating
Agency an Officers' Certificate stating the Master Servicer's compliance with
the provisions of this Section 9.01.

         (l) The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities and shall complete the Form 8811.

         Section 9.02.     PROHIBITED TRANSACTIONS AND ACTIVITIES.

         Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to either REMIC after the Closing Date, unless it and the NIMs Insurer have
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any REMIC created
hereunder as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause any REMIC created hereunder to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.

         Section 9.03.     INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND
                           LOSS OF REMIC STATUS.

         (a) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Master Servicer of its duties and
obligations set forth herein, the Master Servicer shall indemnify the NIMs
Insurer, the Trustee and the Trust Fund against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
PROVIDED, HOWEVER, that the Master Servicer shall not be liable for any such
Losses attributable to the action or inaction of the Trustee, the Depositor or
the Holder of such Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Master Servicer has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Master Servicer have any liability (1)
for any action or omission that is taken in accordance with and in compliance
with the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Master Servicer of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).

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         (b) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Trustee of its duties and obligations set
forth herein, the Trustee shall indemnify the NIMs Insurer and the Trust Fund
against any and all Losses resulting from such negligence; PROVIDED, HOWEVER,
that the Trustee shall not be liable for any such Losses attributable to the
action or inaction of the Master Servicer, the Depositor or the Holder of such
Class R Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Trustee of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).

         Section 9.04. [RESERVED].

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                                    ARTICLE X

                                   TERMINATION

         Section 10.01.             TERMINATION.

         (a) The respective obligations and responsibilities of the Master
Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust
and (iii) the optional purchase by the Master Servicer or the NIMs Insurer of
the Mortgage Loans as described below. Notwithstanding the foregoing, 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's, living on the
date hereof.

         The Master Servicer (or if the Master Servicer fails to exercise such
option, the NIMs Insurer) may, at its option, terminate this Agreement on any
date on which the aggregate of the Principal Balances of the Mortgage Loans on
such date is equal to or less than 10% of the sum of the aggregate Principal
Balances of the Initial Mortgage Loans on the Cut-off Date plus the Original
Pre-Funded Amount, by purchasing, on the next succeeding Distribution Date, all
of the outstanding Mortgage Loans and REO Properties at a price equal to the
greater of the Stated Principal Balance of the Mortgage Loans and REO Properties
or the market value of the Mortgage Loans and REO Properties, in each case plus
accrued and unpaid interest thereon at the weighted average of the Mortgage
Rates through the end of the Due Period preceding the final Distribution Date,
plus unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees
allocable to such Mortgage Loans and REO Properties and any accrued and unpaid
Net WAC Rate Carryover Amount (the "Termination Price").

         In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer or the NIMs Insurer, as applicable, shall deposit
in the Distribution Account all amounts then on deposit in the Collection
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase.

         Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.

         (b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Master Servicer
or the NIMs Insurer, by letter to the Certificateholders and the NIMs Insurer
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final

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distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.

         (c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Class R Certificates, the Holders of the
Class R Certificates agree, in connection with any termination hereunder, to
assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.

         (d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate Servicing Account for
the benefit of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans), the NIMs
Insurer (if the NIMs Insurer has exercised its right to purchase the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds, and the Certificateholders shall look to the Class R
Certificateholder for payment.

         Section 10.02.             ADDITIONAL TERMINATION REQUIREMENTS.

         (a) In the event that the Master Servicer or the NIMs Insurer exercises
its purchase option as provided in Section 10.01, each REMIC shall be terminated
in accordance with the following additional requirements, unless the Trustee
shall have been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section will not
(i) result in the imposition of taxes on "prohibited transactions" of the Trust
as defined in Section 860F of the Code or (ii) cause any REMIC constituting part
of the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

                  (i) Within 90 days prior to the final Distribution Date, the
         Master Servicer or the NIMs Insurer shall adopt and the Trustee shall
         sign a plan of complete liquidation of each REMIC created hereunder
         meeting the requirements of a "Qualified Liquidation" under Section
         860F of the Code and any regulations thereunder; and

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<PAGE>

                  (ii) At or after the time of adoption of such a plan of
         complete liquidation and at or prior to the final Distribution Date,
         the Trustee shall sell all of the assets of the Trust Fund to the
         Master Servicer or the NIMs Insurer, as applicable, for cash pursuant
         to the terms of the plan of complete liquidation.

         (b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan
of complete liquidation (and the Certificateholders hereby appoint the Trustee
as their attorney in fact to sign such plan) as appropriate and (ii) to take
such other action in connection therewith as may be reasonably required to carry
out such plan of complete liquidation all in accordance with the terms hereof.

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<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01.             AMENDMENT.

         This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the NIMs Insurer and without
the consent of the Certificateholders (i) to cure any ambiguity, (ii) to correct
or supplement any provisions herein which may be defective or inconsistent with
any other provisions herein 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, HOWEVER, that any
such action listed in clause (i) through (iii) above shall be deemed not to
adversely affect in any respect the interests of any Certificateholder, if
evidenced by (i) written notice to the Depositor, the Master Servicer and the
Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency or (ii) an Opinion of Counsel
delivered to the Master Servicer and the Trustee.

         In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the NIMs
Insurer and the Majority Certificateholders 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 or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates or distributions which are required to be made on any Certificate
without the consent of the Holder of such Certificate, (y) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.

         Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment and satisfactory to the NIMs Insurer, to the
effect that such amendment will not result in the imposition of a tax on any
REMIC created hereunder constituting part of the Trust Fund pursuant to the
REMIC Provisions or cause any REMIC created hereunder constituting part of the
Trust to fail to qualify as a REMIC at any time that any Certificates are
outstanding and that the amendment is being made in accordance with the terms
hereof.

         Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and

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<PAGE>

the Opinion of Counsel referred to in the immediately preceding paragraph to the
Master Servicer, the NIMs Insurer and each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

         The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 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 Trust, but only upon direction of
Certificateholders 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 together constitute but
one and the same instrument.

         Section 11.03.             LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) 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, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

         No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates

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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 whatever 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, which priority or preference is not otherwise provided
for herein, 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 11.03 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; JURISDICTION.

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

         Section 11.05.             NOTICES.

         All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Originator and/or Master Servicer, Option One Mortgage
Corporation, 3 Ada, Irvine, California 92618, Attention: William O'Neill, or
such other address or telecopy number as may hereafter be furnished to the
Depositor, the NIMs Insurer and the Trustee in writing by the Master Servicer,
(b) in the case of the Trustee, Wells Fargo Bank Minnesota, N.A., 11000 Broken
Land Parkway, Columbia, Maryland 21044, Attention: Option One Mortgage Loan
Trust Series 2001-2, with a copy to Wells Fargo Bank Minnesota, N.A., Sixth and
Marquette, Minneapolis, Minnesota 55479, Attention: Option One Series 2001-2, or
such other address or telecopy number as may hereafter be furnished to the
Depositor, the NIMs Insurer and the Master Servicer in writing by the Trustee,
(c) in the case of the Depositor, Option One Mortgage Acceptance Corporation, 3
Ada, Irvine, California 92618, Attention: William O'Neill, or such other address
or telecopy number as may be furnished to the Master Servicer, the NIMs Insurer
and the Trustee in writing by the Depositor and (d) in the case of the NIMs
Insurer, (i) Radian Insurance Inc., 1601 Market Street, Philadelphia,
Pennsylvania 19103, Attention: General Counsel and (ii) Financial

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<PAGE>

Security Assurance, Inc., 350 Park Avenue, New York, New York 10022, Attn:
Transaction Oversight, or such other address or telecopy number as may hereafter
be furnished to the Depositor, the Master Servicer and the Trustee in writing by
the NIMs Insurer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Master Servicer Default shall be given by telecopy and by certified mail. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.

         Section 11.06.             SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this 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.             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 11.08.             NOTICE TO THE RATING AGENCIES AND THE NIMS
                                    INSURER.

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

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

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

                  (iii) the resignation or termination of the Master Servicer or
         the Trustee;

                  (iv) the final payment to Holders of the Certificates of any
         Class;

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

                  (vi) if the Trustee is acting as successor Master Servicer
         pursuant to Section 7.02 hereof, any event that would result in the
         inability of the Trustee to make Advances.

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<PAGE>

         (b) In addition, the Trustee shall promptly make available to each
Rating Agency copies of each Statement to Certificateholders described in
Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:

                  (i) each annual statement as to compliance described in
                  Section 3.20 hereof;

                  (ii) each annual independent public accountants' servicing
                  report described in Section 3.21 hereof; and

                  (iii) each notice delivered pursuant to Section 7.01(a) hereof
                  which relates to the fact that the Master Servicer has not
                  made an Advance.

         Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service, Inc., 99 Church Street, New York, NY 10048, Attention: MBS
Monitoring/Option One Mortgage Loan Trust 2001-2; Fitch, Inc., One State Street
Plaza, New York, New York 10004 and Standard & Poor's Ratings Services, Inc., 55
Water Street, New York, New York 10004.

         Section 11.09.             FURTHER ASSURANCES.

         Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

         Section 11.10.             THIRD PARTY RIGHTS.

         The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.

         Section 11.11.             BENEFITS OF AGREEMENT.

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

         Section 11.12.             ACTS OF CERTIFICATEHOLDERS.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such

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<PAGE>

instrument or instruments are delivered to the Trustee and the Master Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

         (c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.

         Section 11.13      NO PETITION.

         The Depositor, Master Servicer and the Trustee, by entering into this
Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the Trust
Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations with respect to the Certificates or this
Agreement.

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<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, all as of the day and year first above written.

                                               OPTION ONE MORTGAGE ACCEPTANCE
                                               CORPORATION,
                                                 as Depositor

                                               By: /s/ Rod Colombi
                                                  ------------------------------
                                               Name:   Rod Colombi
                                               Title:  Vice President

                                               OPTION ONE MORTGAGE CORPORATION,
                                                 as Master Servicer

                                               By: /s/ David S. Wells
                                                  ------------------------------
                                               Name:   David S. Wells
                                               Title:  Assistant Secretary

                                               WELLS FARGO BANK MINNESOTA, N.A.,
                                                 as Trustee

                                               By: /s/ Amy Doyle
                                                  ------------------------------
                                               Name:   Amy Doyle
                                               Title:  Assistant Vice President

<PAGE>

STATE OF            )
                    ) ss.:
COUNTY OF           )

         On the ___th day of April, 2001 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
______________ of Option One Mortgage Acceptance Corporation, a Delaware
corporation 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

<PAGE>

STATE OF            )
                    ) ss.:
COUNTY OF           )

         On the ___th day of April, 2001 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
_______________ of Option One Mortgage Corporation, a corporation 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

<PAGE>

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF NEW YORK  )

         On the ___th day of April, 2001 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
____________________ of Wells Fargo Bank Minnesota, N.A., a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, 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

<PAGE>

                                   EXHIBIT A-1

                          FORM OF CLASS A CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

Certificate No.                   :   1

Cut-off Date                      :   With respect to any Mortgage Loan, the
                                      later of (i) the date of origination of
                                      such Mortgage Loan or (ii) April 1, 2001

First Distribution Date           :   May 25, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                  :   $____________

Original Class Certificate
Principal Balance of this Class   :   $____________

Percentage Interest               :   100.00%

Pass-Through Rate                 :   Variable

CUSIP                             :   68389F BN 3

Class                             :   A

Assumed Maturity Date             :   [Date]

                                      A-1-1

<PAGE>

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2
                                     Class A

     evidencing the Percentage Interest in the distributions allocable to
     the Certificates of the  above-referenced  Class with respect to the
     Trust consisting of first lien,  adjustable rate mortgage loans (the
     "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A Certificate (obtained by dividing the
Denomination of this Class A Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April 1, 2001 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, N.A., a national banking
association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class A Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

     Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class A Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      A-1-2

<PAGE>

     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: April __, 2001

                                      OPTION ONE MORTGAGE LOAN TRUST 2001-2

                                      By:  WELLS FARGO BANK MINNESOTA,
                                           N.A.
                                           not in its individual capacity, but
                                           solely as Trustee

                                      By ______________________________________

This is one of the Class A Certificates
referenced in the within-mentioned Agreement

By______________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     N.A.., as Trustee

                                      A-1-3

<PAGE>

                        [Reverse of Class A Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates,
Series 2001-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable 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 Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. 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 therefor 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.

                                      A-1-4

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-1-5

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: __________________

                                      ______________________________________
                                      Signature by or on behalf of assignor

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
for the account of ____________________________________________________________,
account number ________________________, or, if mailed by check, to ____________
________________________________________. Applicable statements should be mailed
to ____________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________, as its
agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2

                  FORM OF CLASS [M-1] [M-2] [M-3] CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES[, THE CLASS M-1
CERTIFICATES AND THE CLASS M-2 CERTIFICATES] TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

                                      A-2-1

<PAGE>

Certificate No.                   :   1

Cut-off Date                      :   With respect to any Mortgage Loan, the
                                      later of (i) the date of origination of
                                      such Mortgage Loan or (ii) April 1, 2001

First Distribution Date           :   May 25, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                  :   $____________

Original Class Certificate
Principal Balance of this Class   :   $____________

Percentage Interest               :   100.00%

Pass-Through Rate                 :   Variable

CUSIP                             :   [68389F BP 8] [68389F BQ 6] [68389F BR 4]

Class                             :   [M-1][M-2][M-3]

Assumed Maturity Date             :   [Date]

                                      A-2-2

<PAGE>

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2
                                  Class M-[__]

     evidencing the Percentage Interest in the distributions allocable to
     the Certificates of the  above-referenced  Class with respect to the
     Trust consisting of first lien,  adjustable rate mortgage loans (the
     "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
M-[__] Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This Class
M-[__] Certificate does not evidence an obligation of, or an interest in, and is
not guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-[__] Certificate (obtained by dividing the
Denomination of this Class M-[__] Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April 1, 2001 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, N.A., a national banking
association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class M-[__] Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class
M-[__] Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

     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(d) of the Agreement.

     Each Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets, (b) it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption ("PTE") 90-59 , 55 Fed. Reg. 36724 (September
6, 1990), as amended by PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) (the
"Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of

                                      A-2-3

<PAGE>

Labor Prohibited Transaction Class Exemption ("PTCE") 95-60), and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.

     Reference is hereby made to the further provisions of this Class M-[__]
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class M-[__] Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      A-2-4

<PAGE>

     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: April __, 2001

                                      OPTION ONE MORTGAGE LOAN TRUST 2001-2

                                      By: WELLS FARGO BANK MINNESOTA,
                                          N.A.
                                          not in its individual capacity, but
                                          solely as Trustee

                                      By ______________________________________

This is one of the Class M-[__] Certificates
referenced in the within-mentioned Agreement

By ______________________________________
         Authorized Signatory of
         Wells Fargo Bank Minnesota,
         N.A., as Trustee

                                      A-2-5

<PAGE>

                      [Reverse of Class M-[__] Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates,
Series 2001-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable 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 Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. 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 therefor 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.

                                      A-2-6

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: ____________________

                                      _______________________________________
                                      Signature by or on behalf of assignor

                                      A-2-8

<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-2-9

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS C CERTIFICATES

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 HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

                                      A-3-1

<PAGE>

Certificate No.                    :  1

Cut-off Date                       :  With respect to any Mortgage Loan, the
                                      later of (i) the date of origination of
                                      such Mortgage Loan or (ii) April 1, 2001

First Distribution Date            :  May 25, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                   :  $_______________

Original Class Certificate
Principal Balance of this Class    :  $_______________

Initial Notional Amount of this
Certificate ("Denomination")
                                   :  $_______________

Original Notional Amount of
this Class                         :  $_______________

Percentage Interest                :  100.00%

Class                              :  C

                                      A-3-2

<PAGE>

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2
                                     Class C

     evidencing the Percentage Interest in the distributions allocable to
     the Certificates of the  above-referenced  Class with respect to the
     Trust consisting of first lien,  adjustable rate mortgage loans (the
     "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Class C Certificate (obtained
by dividing the Denomination of this Class C Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April 1, 2001 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, N.A., a national banking
association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class C Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

                                      A-3-3

<PAGE>

     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(d) of the Agreement.

     Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      A-3-4

<PAGE>

     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: April __, 2001

                                      OPTION ONE MORTGAGE LOAN TRUST 2001-2

                                      By: WELLS FARGO BANK MINNESOTA,
                                          N.A.,
                                          not in its individual capacity, but
                                          solely as Trustee

                                      By _____________________________________

This is one of the Class C Certificates
referenced in the within-mentioned Agreement

By ____________________________________
    Authorized Signatory of
    Wells Fargo Bank Minnesota, N.A.,
    a national banking association, as Trustee

                                      A-3-5

<PAGE>

                        [Reverse of Class C Certificate]

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates,
Series 2001-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable 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 Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. 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 therefor 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.

                                      A-3-6

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________

Dated:___________________

                                      ______________________________________
                                      Signature by or on behalf of assignor

                                      A-3-8

<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-3-9

<PAGE>

                                   EXHIBIT A-4

                           FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS 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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

                                      A-4-1

<PAGE>

Certificate No.                   :  1

Cut-off Date                      :  With respect to any Mortgage Loan, the
                                     later of (i) the date of origination of
                                     such Mortgage Loan or (ii) April 1, 2001

First Distribution Date           :  May 25, 2001

Initial Certificate Principal
Balance of this Certificate
("Denomination")                  :  $100.00

Original Class Certificate
Principal Balance of this Class   :  $100.00

Percentage Interest               :  100.00%

Class                             :  P

                                      A-4-2

<PAGE>

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2
                                     Class P

     evidencing the Percentage Interest in the distributions allocable to
     the Certificates of the  above-referenced  Class with respect to the
     Trust consisting of first lien,  adjustable rate mortgage loans (the
     "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Class P Certificate (obtained
by dividing the Denomination of this Class P Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of April 1, 2001 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, N.A., a national banking
association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class P Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

     This Certificate does not have a pass-through rate and will be entitled to
distributions only to the extent set forth in the Agreement.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability

                                      A-4-3

<PAGE>

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(d) of the Agreement.

     Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      A-4-4

<PAGE>

     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: April __, 2001

                                      OPTION ONE MORTGAGE LOAN TRUST 2001-2

                                      By: WELLS FARGO BANK MINNESOTA,
                                          N.A.,
                                          not in its individual capacity, but
                                          solely as Trustee

                                      By ______________________________________

This is one of the Class P Certificates
referenced in the within-mentioned Agreement

By ______________________________________
    Authorized Signatory of
    Wells Fargo Bank Minnesota, N.A.,
    a national banking association, as Trustee

                                      A-4-5

<PAGE>

                        [Reverse of Class P Certificate]

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates,
Series 2001-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable 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 Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. 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 therefor 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.

                                      A-4-6

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-4-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________

Dated: _____________________

                                      __________________________________________
                                      Signature by or on behalf of assignor

                                      A-4-8

<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-4-9

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS R CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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 REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS 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"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

Certificate No.          :  1

Cut-off Date             :  With respect to any Mortgage Loan, the later of
                            (i) the date of origination of such Mortgage Loan or
                            (ii) April 1, 2001

First Distribution Date  :  May 25, 2001

Percentage Interest      :  100.00%

Class                       R

                                      A-5-1

<PAGE>

                      OPTION ONE MORTGAGE LOAN TRUST 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2
                                     Class R

     evidencing the Percentage Interest in the distributions allocable to
     the Certificates of the  above-referenced  Class with respect to the
     Trust consisting primarily of a pool of first lien,  adjustable rate
     mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Master Servicer or the Trustee referred
to below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Option One Mortgage Acceptance Corporation (the "Depositor"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of
April 1, 2001 (the "Agreement") among the Depositor, Option One Mortgage
Corporation, as master servicer (the "Master Servicer") and Wells Fargo Bank
Minnesota, N.A., a national banking association, as trustee (the "Trustee"). 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.

     This Certificate does not have a principal balance or pass-through rate and
will be entitled to distributions only to the extent set forth in the Agreement.
In addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the Corporate Trust Office or the office or agency maintained by the Trustee in
Minneapolis, Minnesota.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Master Servicer or the Depositor; or there shall be delivered
to the Trustee and the Depositor a transferor certificate by the transferor and
an investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability

                                      A-5-2

<PAGE>

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(d) of the Agreement.

     Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
officer of the Trustee.

                                      A-5-3

<PAGE>

     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: April __, 2001

                                          OPTION ONE MORTGAGE LOAN TRUST 2001-2

                                          By:  WELLS FARGO BANK MINNESOTA,
                                               N.A.,
                                               not in its individual capacity,
                                               but solely as Trustee

                                          By ______________________________

This is one of the Class R Certificates
referenced in the within-mentioned Agreement

By ______________________________________
   Authorized Signatory of
   Wells Fargo Bank Minnesota, N.A.,
   a national banking association, as Trustee

                                      A-5-4

<PAGE>

                        [Reverse of Class R Certificate]

                      Option One Mortgage Loan Trust 2001-2
                           Asset-Backed Certificates,
                                  Series 2001-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2001-2, Asset-Backed Certificates,
Series 2001-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable 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 Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee and of Holders of the
requisite percentage of the Percentage Interests of each Class of Certificates
affected by such amendment, as specified in the Agreement. 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 therefor 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.

                                      A-5-5

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Depositor, the Master Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-5-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________

Dated:_____________________

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                      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 B

                                   [RESERVED]

                                       B-1

<PAGE>

                                    EXHIBIT C

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       C-1

<PAGE>

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

                        OPTION ONE MORTGAGE CORPORATION,

                                    as Seller

                                       and

                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser

                        MORTGAGE LOAN PURCHASE AGREEMENT

                           Dated as of April 23, 2001

                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2001-2

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
                                                    ARTICLE I.

                                                    DEFINITIONS

         Section 1.01      DEFINITIONS............................................................................1

                                                    ARTICLE II.

                                 SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.................................................................2
         Section 2.02      OBLIGATIONS OF SELLER UPON SALE........................................................2
         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5

                                                   ARTICLE III.

                                REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01      SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS...................6
         Section 3.02      SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER..........................12
         Section 3.03      REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................14

                                                    ARTICLE IV.

                                                SELLER'S COVENANTS

         Section 4.01      COVENANTS OF THE SELLER...............................................................15

                                                    ARTICLE V.

                                INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.......................................................................16

                                                         i

<PAGE>

                                                    ARTICLE VI.

                                                    TERMINATION

         Section 6.01      TERMINATION...........................................................................19

                                                   ARTICLE VII.

                                             MISCELLANEOUS PROVISIONS

         Section 7.01      AMENDMENT.............................................................................19
         Section 7.02      GOVERNING LAW.........................................................................19
         Section 7.03      NOTICES...............................................................................19
         Section 7.04      SEVERABILITY OF PROVISIONS............................................................20
         Section 7.05      COUNTERPARTS..........................................................................20
         Section 7.06      FURTHER AGREEMENTS....................................................................20
         Section 7.07      INTENTION OF THE PARTIES..............................................................20
         Section 7.08      SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................20
         Section 7.09      SURVIVAL..............................................................................21
</TABLE>

                                       ii

<PAGE>

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of April 23, 2001
(the "Agreement"), among Option One Mortgage Corporation (the "Seller") and
Option One Mortgage Acceptance Corporation (the "Purchaser").

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

                  WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and

                  WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

                  WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and

                  WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of April 1, 2001 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Seller as master servicer and Wells Fargo
Bank Minnesota, N.A. as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Option One Mortgage Loan Trust 2001-2 (the "Trust");

                  WHEREAS, the Seller is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself and the Mortgage Loans.

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

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.

         "SELLER INFORMATION": The information in the Prospectus Supplement as
         follows: under "SUMMARY OF TERMS--Mortgage Loans," the fifth bullet
         point under "RISK FACTORS--Unpredictability of Prepayments and Effect
         on Yields," the second sentence under "RISK FACTORS--Balloon Loan
         Risks," the fourth bullet point under "RISK FACTORS--Interest Generated
         by the Mortgage Loans May Be Insufficient to Maintain
         Overcollateralization," the third and fourth sentences under "RISK
         FACTORS--Effect of

                                        1

<PAGE>

         Mortgage Loan Rates on the Class A Certificates and the Mezzanine
         Certificates," the second sentence under "RISK FACTORS--High
         Loan-to-Value Ratios Increase Risk of Loss," the first and third
         sentences under "RISK FACTORS--Nature of the Mortgage Loans," "THE
         MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the fifth sentence
         of the first paragraph, the third and fourth sentences of the second
         paragraph and the sixth and ninth sentences of the fourth paragraph
         under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.

                  (a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, assign, set over, and otherwise convey to
the Purchaser, without recourse, (i) all of its right, title and interest in and
to each Mortgage Loan, including the related Cut-off Date Principal Balance, all
interest accruing thereon on and after the Cut-off Date and all collections in
respect of interest and principal due on or after the Cut-off Date; (ii)
property which secured such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance
policies (including the PMI Policy) in respect of the Mortgage Loans and (iv)
all proceeds of any of the foregoing.

                  (b) In connection with the transactions contemplated by
Section 2.08 of the Pooling and Servicing Agreement, the Seller hereby agrees
that the Purchaser shall be under no obligation to purchase any Subsequent
Mortgage Loans unless (i) the conditions precedent contained in Section 2.08 of
the Pooling and Servicing Agreement and the Subsequent Transfer Instrument,
substantially in the form of Exhibit N of the Pooling and Servicing Agreement,
are satisfied and (ii) each Subsequent Mortgage Loan satisfies the
representations and warranties contained in Section 3.01 of this Agreement. The
sale of Subsequent Mortgage Loans by the Seller to the Depositor shall be
effected in accordance with the terms of Section 2.08 of the Pooling and
Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase Agreement
substantially in the form of this Agreement.

         Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense on or prior to the Closing Date, (a) to cause its books and records to
indicate that the Mortgage Loans have been sold to the Purchaser pursuant to
this Agreement, (b) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all such Mortgage Loans specifying for
each such Mortgage Loan, as of the Cut-off Date, (i) its account number and (ii)
the Cut-off Date Principal Balance. Such file, which forms a part of Exhibit D
to the Pooling and Servicing Agreement, shall also be marked as Schedule I to
this Agreement and is hereby incorporated into and made a part of this Agreement
and (c) to deliver to the Purchaser and the Trustee the ETT (as defined in the
PMI Policy) with respect to the Mortgage Loans.

                                        2

<PAGE>

                  In connection with any conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Trustee, as
assignee of the Purchaser, on or before the Closing Date, the following
documents or instruments with respect to each Mortgage Loan:

                           (i) the original Mortgage Note, endorsed either (A)
in blank, in which case the Trustee shall cause the endorsement to be completed
or (B) in the following form: "Pay to the order of Wells Fargo Bank Minnesota,
N.A., as Trustee, 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 or Subsequent Cut-off Date Principal Balance, as
applicable, of which is less than or equal to 1.00% of the Pool Balance as of
the Cut-off Date or the Subsequent Cut-off Date, as applicable;

                           (ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording thereon or,
if such Mortgage or power of attorney has been submitted for recording but has
not been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney, as the
case may be, certified to be a true and complete copy of the original submitted
for recording;

                           (iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Wells Fargo Bank Minnesota, N.A., as Trustee,
without recourse";

                           (iv) an original copy of any intervening assignment
of Mortgage showing a complete chain of assignments;

                           (v) the original or a certified copy of lender's
title insurance policy; and

                           (vi) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any.

         The Seller hereby confirms to the Purchaser and the Trustee that it has
made the appropriate entries in its general accounting records to indicate that
such Mortgage Loans have been transferred to the Trustee and constitute part of
the Trust in accordance with the terms of the Pooling and Servicing Agreement.

         If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans) been submitted for recording but either (x) has not
been returned from the applicable public recording office or (y) has been lost
or such public recording office has retained the original of such document, the
obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date (or Subsequent Closing Date, with respect to Subsequent Mortgage
Loans), of a copy of each such document certified by the Seller in the case of
(x) above or the applicable public recording office in the case of (y) above to
be a true and

                                        3

<PAGE>

complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Seller, delivery to the Trustee or the Custodian,
promptly upon receipt thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true and complete
copy of the original. If the original lender's title insurance policy, or a
certified copy thereof, was not delivered pursuant to Section 2.02(v) above, the
Seller shall deliver or cause to be delivered to the Trustee or the Custodian,
the original or a copy of a written commitment or interim binder or preliminary
report of title issued by the title insurance or escrow company, with the
original or a certified copy thereof to be delivered to the Trustee or the
Custodian, promptly upon receipt thereof. The Seller shall deliver or cause to
be delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

         Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.

         The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.

         The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.

         The Seller shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(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 NIMs Insurer,
the Trustee and the Rating Agencies on or before the Closing Date, 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, each Assignment shall be submitted for
recording by the Seller in the manner described above, 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 Master Servicer, (iv)
the occurrence of a servicing transfer as described in Section 7.02 hereof, (v)
if the Seller is not the Master Servicer and with respect to any one Assignment
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage and (vi) any Mortgage Loan that is 90 days
or

                                        4

<PAGE>

more Delinquent. The Seller shall be required to deliver such assignments for
recording within 45 days of the Closing Date. The Seller 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 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. In the event that any
Mortgage Note is endorsed in blank as of the Closing Date, promptly following
the Closing Date the Depositor shall cause to be completed such endorsements
"Pay to the order of Wells Fargo Bank Minnesota, N.A., as Trustee, without
recourse."

         The Seller shall forward to the Purchaser original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Seller shall provide the
Purchaser with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 270 days of its submission for recordation. In the event that
the Seller cannot provide a copy of such document certified by the public
recording office within such 270 day period, the Seller shall deliver to the
Purchaser, within such 270 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Seller shall immediately deliver such document to the Purchaser. In the event
the appropriate public recording office will not certify as to the accuracy of
such document, the Seller shall deliver a copy of such document certified by an
officer of the Seller to be a true and complete copy of the original to the
Purchaser.

         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

         In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to 1,153,652.01 and (ii) a 0.52% percentage interest in
the Class C Certificates, the Class P Certificates and the Class R Certificates
(collectively the "Option One Certificates") which Option One Certificates shall
be registered in the name of Option One Mortgage Securities Corp. The Originator
shall pay, and be billed directly for, all expenses incurred by the Purchaser in
connection with the issuance of the Certificates, including, without limitation,
printing fees incurred in connection with the prospectus relating to the
Certificates, blue sky registration fees and expenses, fees and expenses of
Purchaser's counsel, fees of the rating agencies requested to rate the
Certificates, accountant's fees and expenses and the fees and expenses of the
Trustee and other out-of-pocket costs, if any.

                                        5

<PAGE>

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Seller hereby represents and warrants with respect to the
Mortgage Loans to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:

                  (a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;

                  (b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;

                  (c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;

                  (d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;

                  (e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Seller and any affiliate of the Seller in
compliance with all applicable federal, state and local laws and regulations and
the terms of the related Mortgage Note and Mortgage;

                  (f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);

                  (g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage and (iv) the first lien on the Mortgaged Property, in the case
of the Mortgages that are second liens;

                                        6

<PAGE>

                  (h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;

                  (i) As of the last calendar day of March 2001 and with respect
to any Mortgage Loan that had a payment due on or before March 1, 2001, except
with respect to approximately 0.05% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on March 1, 2001 has been received. In addition, no more than [__]%
of the Mortgage Loans have been 30 or more days delinquent in the last 12 months
and no more than [__]% of the Mortgage Loans have been 30 or more days
delinquent for two payment periods in the last 12 months;

                  (j) The Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan under the Mortgage Loan;

                  (k) The Seller has not impaired, waived, altered or modified
the related Mortgage or Mortgage Note in any material respect, or satisfied,
canceled, rescinded or subordinated such Mortgage or Mortgage Note in whole or
in part or released all or any material portion of the Mortgaged Property from
the lien of the Mortgage, or executed any instrument of release, cancellation,
rescission or satisfaction of the Mortgage Note or Mortgage;

                  (l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;

                  (m) No Mortgage Loan is 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 any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or 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;

                  (n) To the Seller's knowledge, there is no proceeding pending
for the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

                  (o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Seller's rights under such policies,

                                        7

<PAGE>

opinions or other instruments shall be transferred and assigned to Purchaser
upon sale and assignment of the Mortgage Loans hereunder. The title insurance
policy has been issued by a title insurer licensed to do business in the
jurisdiction where the Mortgaged Property is located, insuring the original
lender, its successor and assigns, as to the first or second priority lien of
the Mortgage in the original principal amount of the Mortgage Loan, subject to
the exceptions contained in such policy. Seller is the sole insured of such
mortgagee title insurance policy, and such mortgagee title insurance policy is
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. Neither the Seller nor any
affiliate of the Seller has made, and Seller has no knowledge of, any claims
under such mortgagee title insurance policy. Seller is not aware of any action
by a prior holder and neither Seller nor any affiliate of the Seller has done,
by act or omission, anything which could impair the coverage or enforceability
of such mortgagee title insurance policy or the accuracy of such attorney's
opinion of title;

                  (p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related 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 material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Seller nor any
affiliate of the Seller has waived any default, breach, violation or event of
acceleration;

                  (q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;

                  (r) To the Seller's knowledge, 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;

                  (s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Seller's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;

                  (t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance, and, if applicable, flood insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. The Mortgaged Property is covered by Hazard Insurance;

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<PAGE>

                  (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

                  (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
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 (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Seller or any affiliate of 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;

                  (w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;

                  (x) To the Seller's knowledge, there was no fraud involved in
the origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;

                  (y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

                  (z) To the best of the Seller's knowledge, 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;

                  (aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements

                                        9

<PAGE>

are within the project with respect to that unit), and no improvements on
adjoining properties encroach upon the Mortgaged Property unless there exists in
the Mortgage File a title Policy with endorsements which insure against losses
sustained by the insured as a result of such encroachments;

                  (bb) Each Mortgage Loan was originated or acquired 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 by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Seller's underwriting
criteria, which are at least as stringent as the underwriting criteria set forth
in the Prospectus Supplement. Each Mortgage Loan is currently being serviced by
the Seller and has been serviced by the Seller since the date of origination of
such Mortgage Loan;

                  (cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;

                  (dd) Other than with respect to not more than approximately
0.00% of the Mortgage Loans (by aggregate principal balance of the Mortgage
Loans as of the Cut-off Date), which are "balloon payment" mortgage loans, each
Mortgage Loan is fully amortizing;

                  (ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;

                  (ff) With respect to escrow deposits, 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 advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;

                  (gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor; (ii) paid by any source other than the Mortgagor or (iii)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

                  (hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;

                  (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note;

                                       10

<PAGE>

                  (jj) 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;

                  (kk) 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;

                  (ll) There are no mechanics' or similar liens or claims that
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
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;

                  (mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;

                  (nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;

                  (oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;

                  (pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;

                  (qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;

                  (rr) The Mortgage Loans have original terms to maturity
ranging from 15 to 30 years;

                  (ss) With respect to the Mortgage Loans, no more than
approximately 41.59%; 32.28%; 11.54%; 8.69% and 5.89% of the Mortgage Loans, by
Cut-off Date Principal Balance will be secured by Mortgaged Properties located
in New York, Virginia, Illinois, California and Michigan, respectively; and
approximately 100.00% of the Mortgage Loans, by Cut-off Date Principal Balance
will be secured by real property with a single family residence erected thereon
and approximately 0.00% of the Mortgage Loans, by the Cut-off Date Principal
Balance are secured by condominiums;

                  (tt) As of the Cut-off Date, each Mortgage Loan had a
Loan-to-Value-Ratio that was less than or equal to 95.00%;

                                       11

<PAGE>

                  (uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;

                  (vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $230,730.00;

                  (ww) 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;

                  (xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

                  (yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and

                  (zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-105(l)(I) of the UCC.

         Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Seller represents, warrants and covenants to the Purchaser as of the
Closing Date or as of such other date specifically provided herein or in the
applicable Assignment and Conveyance:

                           (i) The Seller is duly organized, validly existing
and in good standing as a corporation under the laws of the State of California
and is and will remain in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of this
Agreement;

                           (ii) The Seller has the full power and authority to
hold each Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by this
Agreement. The Seller has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser and the Seller, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization. At the time of the sale of each Mortgage Loan by the Seller, the
Seller had the full power and authority to hold each Mortgage Loan and to sell
each Mortgage Loan;

                           (iii) The execution and delivery of this Agreement by
the Seller and the performance of and compliance with the terms of this
Agreement will not violate the Seller's articles of incorporation or by-laws or
constitute a default under or result in a breach or acceleration of, any

                                       12

<PAGE>

material contract, agreement or other instrument to which the Seller is a party
or which may be applicable to the Seller or its assets;

                           (iv) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;

                           (v) The Seller is a HUD approved mortgagee pursuant
to Section 203 and Section 211 of the National Housing Act. No event has
occurred, including but not limited to a change in insurance coverage, which
would make the Seller unable to comply with HUD eligibility requirements or
which would require notification to HUD;

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

                           (vii) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity of enforceability of, this Agreement;

                           (viii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Seller of, or compliance by the Seller 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;

                           (ix) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Seller. The sale of the Mortgage Loans was in the ordinary course of business of
the Seller and the assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or any similar
statutory provisions;

                           (x) The information delivered by the Seller to the
Purchaser with respect to the Seller's loan loss, foreclosure and delinquency
experience on mortgage loans underwritten to similar standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report;

                           (xi) Except with respect to any statement regarding
the intentions of the Purchaser, or any other statement contained herein the
truth or falsity of which is dependant solely

                                       13

<PAGE>

upon the actions of the Purchaser, this Agreement does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements contained herein not misleading. The written statements, reports
and other documents prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby taken in the aggregate do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements contained therein not misleading; and

                           (xii) The Seller has not transferred the Mortgage
Loans with any intent to hinder, delay or defraud any of its creditors.

         Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Subsections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment or
the examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best 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
is inaccurate and the inaccuracy materially and adversely affects the value of
the related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty being inaccurate at the time the representation and warranty was made,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty and the Seller shall take such action described in the following
paragraphs of this Section 3.04 in respect of such Mortgage Loan. Upon discovery
by either the Seller, the Master Servicer or the Purchaser of a breach of any of
the foregoing representations and warranties that materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the others.

         Within 90 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty made by the Seller that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest therein of the Purchaser, the Seller shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Purchase Price. In the event that a breach shall
involve any representation or warranty set forth in Subsection 3.02 or 3.03 and
such breach cannot be cured within 90 days of the earlier of either discovery by
or notice to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Purchase Price. The
Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase a deficient Mortgage
Loan as provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If the Seller does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.04 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in accordance with Section 2.03

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<PAGE>

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.

         At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller and the delivery to the
Seller of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Seller shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

         As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage Note endorsed as required therein. The
Seller shall deposit in the Collection Account the Monthly Payment less the
Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Subsections 3.01, 3.02 or 3.03.

         It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

         It is understood and agreed that the obligations of the Seller set
forth in Section 3.03 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01 or 3.02.

                                   ARTICLE IV.

                               SELLER'S COVENANTS

         Section 4.01 COVENANTS OF THE SELLER. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loan, or any interest therein; the Seller will notify
the Trustee, as assignee of the Purchaser, of the existence of any Lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend the
right, title and interest of the Trust, as assignee of the Purchaser, in, to and
under the Mortgage Loans, against all

                                       15

<PAGE>

claims of third parties claiming through or under the Seller or the Seller;
provided, however, that nothing in this Section 4.01 shall prevent or be deemed
to prohibit the Seller from suffering to exist upon any of the Mortgage Loans
any Liens for municipal or other local taxes and other governmental charges if
such taxes or governmental charges shall not at the time be due and payable or
if the Seller shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.

                  (a) The Seller agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission relates to the Seller Information contained in the Prospectus
Supplement, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the information on any computer tape furnished to the
Purchaser or an affiliate thereof by or on behalf of the Seller containing
information regarding the assets of the Trust or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any information
provided by the Seller to the Purchaser or any affiliate thereof, or any
material omission from the information purported to be provided hereby, and
disseminated to PricewaterhouseCoopers LLP or prospective investors (directly or
indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Seller may otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller, its officers, directors and each person or entity who controls the
Seller, or any such person, against any and all losses, claims, damages or
liabilities, joint and several, to which the Seller or any such person or entity
may become subject, under the Securities Act or otherwise, and will reimburse
the Seller for any legal or other expenses incurred by the Seller, each officer
and director and controlling person in connection with investigating or
defending any such losses, claims, damages or liabilities insofar

                                       16

<PAGE>

as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement or the omission or the alleged omission
to state therein a material fact necessary in order to make the statements in
the Prospectus Supplement or any amendment or supplement to the Prospectus
Supplement, in the light of the circumstances under which they were made, not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is not contained in the Seller
Information in the Prospectus Supplement. This indemnity agreement will be in
addition to any liability which the Purchaser may otherwise have.

                  (c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

                  If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

                  Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Seller,

                                       17

<PAGE>

if the indemnified parties in this Article V consist of the Seller, if the
indemnified parties under this Article V consist of the Seller.

                  Each indemnified party, as a condition of the indemnity
agreements contained in Section 5.01 (a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

                  (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans such that the Purchaser is
responsible for the lesser of (i) 0.25% thereof and (ii) 0.25% of the aggregate
proceeds to the Seller from the sale of the Mortgage Loans and the Seller shall
be responsible for the balance; PROVIDED, HOWEVER, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
officer and director of the Purchaser and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Purchaser and each director of the Seller,
each officer of the Seller, and each person, if any, who controls the Seller
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Seller.

                  (e) The Seller agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Seller to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Seller of its representations and warranties
in Section 3.01 or 3.02 of this Agreement or (iii) related to the origination or
prior servicing of the

                                       18

<PAGE>

Mortgage Loans by reason of any acts, omissions, or alleged acts or omissions of
the Seller or any servicer. The Seller shall immediately notify the Purchaser,
the Trustee and each Certificateholder if a claim is made by a third party with
respect to this Agreement. The Seller shall assume the defense of any such claim
and pay all expenses in connection therewith, including reasonable counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Purchaser, the Trustee or any such person or entity and/or
any Certificateholder in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION

         Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the Seller's indemnity obligations as provided herein upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS

         Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Seller and the Purchaser, by written agreement signed by the Seller and
the Purchaser.

         Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
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 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

         if to the Seller:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.

         if to the Purchaser:

                  Option One Mortgage Acceptance Corporation

                                       19

<PAGE>

                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.

         Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.

         Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

         Section 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.

         Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.

         Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.

         Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Trustee and the NIMs Insurer. The NIMs Insurer shall
be a third party beneficiary hereof and may enforce the terms hereof as if a
party hereto. The obligations of the Seller under this Agreement cannot be

                                       20

<PAGE>

assigned or delegated to a third party without the consent of the Purchaser
which consent shall be at the Purchaser's sole discretion, except that the
Purchaser acknowledges and agrees that the Seller may assign its obligations
hereunder to any Person into which the Seller is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller is a
party or any Person succeeding to the business of the Seller. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue a Series of Certificates
representing undivided interests in such Mortgage Loans. As an inducement to the
Purchaser to purchase the Mortgage Loans, the Seller acknowledges and consents
to the assignment by the Purchaser to the Trustee of all of the Purchaser's
rights against the Seller pursuant to this Agreement insofar as such rights
relate to Mortgage Loans transferred to the Trustee and to the enforcement or
exercise of any right or remedy against the Seller pursuant to this Agreement by
the Trustee. Such enforcement of a right or remedy by the Trustee shall have the
same force and effect as if the right or remedy had been enforced or exercised
by the Purchaser directly.

         Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

                                       21

<PAGE>

                  IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed to this Mortgage Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year fist above
written.

                                            OPTION ONE MORTGAGE ACCEPTANCE
                                            CORPORATION,
                                                as Purchaser

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

                                            OPTION ONE MORTGAGE CORPORATION
                                                as Seller

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

<PAGE>

                                   SCHEDULE I

                                 MORTGAGE LOANS
                                 --------------

                             AVAILABLE UPON REQUEST

                                       I-1

<PAGE>

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

                        OPTION ONE MORTGAGE CORPORATION,

                                  as Originator

                         OPTION ONE OWNER TRUST 2001-1A,

                                    as Seller

                                       and

                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser

                        MORTGAGE LOAN PURCHASE AGREEMENT

                           Dated as of April 23, 2001

                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2001-2

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----

                                                    ARTICLE I.

                                                    DEFINITIONS

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

                                                    ARTICLE II.

                                 SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.................................................................2
         Section 2.02      OBLIGATIONS OF ORIGINATOR UPON SALE....................................................2
         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5

                                                   ARTICLE III.

                                REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS...............6
         Section 3.02      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE ORIGINATOR..................12
         Section 3.03      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER......................14
         Section 3.04      REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................16

                                                    ARTICLE IV.

                                              ORIGINATOR'S COVENANTS

         Section 4.01      COVENANTS OF THE ORIGINATOR...........................................................17

                                                    ARTICLE V.

                                INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.......................................................................18

                                                         i

<PAGE>

                                                    ARTICLE VI.

                                                    TERMINATION

         Section 6.01      TERMINATION...........................................................................21

                                                   ARTICLE VII.

                                             MISCELLANEOUS PROVISIONS

         Section 7.01      AMENDMENT.............................................................................21
         Section 7.02      GOVERNING LAW.........................................................................21
         Section 7.03      NOTICES...............................................................................21
         Section 7.04      SEVERABILITY OF PROVISIONS............................................................22
         Section 7.05      COUNTERPARTS..........................................................................22
         Section 7.06      FURTHER AGREEMENTS....................................................................22
         Section 7.07      INTENTION OF THE PARTIES..............................................................23
         Section 7.08      SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................23
         Section 7.09      SURVIVAL..............................................................................23
         Section 7.10      OWNER TRUSTEE..................................................................................23
</TABLE>

                                       ii

<PAGE>

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of April 23, 2001
(the "Agreement"), among Option One Mortgage Corporation (the "Originator"),
Option One Owner Trust 2001-1A (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").

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

                  WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and

                  WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

                  WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and

                  WHEREAS, the Seller is an indirect subsidiary of the
Originator and the Originator is the administrator of the Seller; and

                  WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and

                  WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of April 1, 2001 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Originator as master servicer and Wells
Fargo Bank Minnesota, N.A. as trustee (the "Trustee"), the Purchaser will convey
the Mortgage Loans to Option One Mortgage Loan Trust 2001-2 (the "Trust");

                  WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.

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

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.

                                        1

<PAGE>

         "ORIGINATOR INFORMATION": The information in the Prospectus Supplement
         as follows: under "SUMMARY OF TERMS--Mortgage Loans," the fifth bullet
         point under "RISK FACTORS--Unpredictability of Prepayments and Effect
         on Yields," the second sentence under "RISK FACTORS--Balloon Loan
         Risks," the fourth bullet point under "RISK FACTORS--Interest Generated
         by the Mortgage Loans May Be Insufficient to Maintain
         Overcollateralization," the third and fourth sentences under "RISK
         FACTORS--Effect of Mortgage Loan Rates on the Class A Certificates and
         the Mezzanine Certificates," the second sentence under "RISK
         FACTORS--High Loan-to-Value Ratios Increase Risk of Loss," the first
         and third sentences under "RISK FACTORS--Nature of the Mortgage Loans,"
         "THE MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the fifth
         sentence of the first paragraph, the third and fourth sentences of the
         second paragraph and the sixth and ninth sentences of the fourth
         paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.

                  (a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, assign, set over, and otherwise convey to
the Purchaser, without recourse, (i) all of its right, title and interest in and
to each Mortgage Loan, including the related Cut-off Date Principal Balance, all
interest accruing thereon on and after the Cut-off Date and all collections in
respect of interest and principal due on or after the Cut-off Date; (ii)
property which secured such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance
policies (including the PMI Policy) in respect of the Mortgage Loans and (iv)
all proceeds of any of the foregoing.

                  (b) In connection with the transactions contemplated by
Section 2.08 of the Pooling and Servicing Agreement, the Seller hereby agrees
that the Purchaser shall be under no obligation to purchase any Subsequent
Mortgage Loans unless (i) the conditions precedent contained in Section 2.08 of
the Pooling and Servicing Agreement and the Subsequent Transfer Instrument,
substantially in the form of Exhibit N of the Pooling and Servicing Agreement,
are satisfied and (ii) each Subsequent Mortgage Loan satisfies the
representations and warranties contained in Section 3.01 of this Agreement. The
sale of Subsequent Mortgage Loans by the Seller to the Depositor shall be
effected in accordance with the terms of Section 2.08 of the Pooling and
Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase Agreement
substantially in the form of this Agreement.

         Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator further agrees, at
its own expense on or prior to the Closing Date, (a) to cause the books and
records of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such

                                        2

<PAGE>

Mortgage Loan, as of the Cut-off Date, (i) its account number and (ii) the
Cut-off Date Principal Balance. Such file, which forms a part of Exhibit D to
the Pooling and Servicing Agreement, shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this Agreement and
(c) to deliver to the Purchaser and the Trustee the ETT (as defined in the PMI
Policy) with respect to the Mortgage Loans.

                  In connection with any conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Trustee, as
assignee of the Purchaser, on or before the Closing Date, the following
documents or instruments with respect to each Mortgage Loan:

                           (i) the original Mortgage Note, endorsed either (A)
in blank, in which case the Trustee shall cause the endorsement to be completed
or (B) in the following form: "Pay to the order of Wells Fargo Bank Minnesota,
N.A., as Trustee, 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 or Subsequent Cut-off Date Principle Balance, as
applicable, of which is less than or equal to 1.00% of the Pool Balance as of
the Cut-off Date, or the Subsequent Cut-off Date, as applicable;

                           (ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording thereon or,
if such Mortgage or power of attorney has been submitted for recording but has
not been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney, as the
case may be, certified to be a true and complete copy of the original submitted
for recording;

                           (iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Wells Fargo Bank Minnesota, N.A., as Trustee,
without recourse";

                           (iv) an original copy of any intervening assignment
of Mortgage showing a complete chain of assignments;

                           (v) the original or a certified copy of lender's
title insurance policy; and

                           (vi) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any.

         The Originator hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in the general accounting records
of the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

         If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans) been submitted for

                                        3

<PAGE>

recording but either (x) has not been returned from the applicable public
recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Seller to deliver
such documents shall be deemed to be satisfied upon (1) delivery to the Trustee
or the Custodian no later than the Closing Date (or Subsequent Closing Date,
with respect to Subsequent Mortgage Loans), of a copy of each such document
certified by the Originator in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Originator, delivery to the Trustee or the Custodian, promptly upon receipt
thereof of either the original or a copy of such document certified by the
applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

         Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.

         The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.

         The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.

                  The Originator shall cause the Assignments which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv)
hereof to be recorded; PROVIDED, HOWEVER, the Originator 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
Originator to the NIMs Insurer, the Trustee and the Rating Agencies on or before
the Closing Date, 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, each Assignment shall be
submitted for recording by the Originator in the manner described above, at no
expense to the Trust

                                        4

<PAGE>

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 Master Servicer, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof or (v) if
the Originator is not the Master Servicer and with respect to any one Assignment
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage and (vi) any Mortgage Loan that is 90 days
or more Delinquent. The Originator shall be required to deliver such assignments
for recording within 45 days of the Closing Date. The Originator 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 Originator shall promptly have a
substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded. In the event that
any Mortgage Note is endorsed in blank as of the Closing Date, promptly
following the Closing Date the Depositor shall cause to be completed such
endorsements "Pay to the order of Wells Fargo Bank Minnesota, N.A., as Trustee,
without recourse."

         The Originator shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Pooling and Servicing
Agreement within two weeks of their execution; PROVIDED, HOWEVER, that the
Originator shall provide the Purchaser with a certified true copy of any such
document submitted for recordation within two weeks of its execution, and shall
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within 270 days of its submission for recordation.
In the event that the Originator cannot provide a copy of such document
certified by the public recording office within such 270 day period, the
Originator shall deliver to the Purchaser, within such 270 day period, an
Officer's Certificate of the Master Servicer which shall (A) identify the
recorded document, (B) state that the recorded document has not been delivered
to the Purchaser due solely to a delay caused by the public recording office,
(C) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, if known, and
(D) specify the date the applicable recorded document is expected to be
delivered to the Purchaser, and, upon receipt of a copy of such document
certified by the public recording office, the Originator shall immediately
deliver such document to the Purchaser. In the event the appropriate public
recording office will not certify as to the accuracy of such document, the
Originator shall deliver a copy of such document certified by an officer of the
Originator to be a true and complete copy of the original to the Purchaser.

         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

         In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to 97,875,349.58 and (ii) a 44.39% percentage interest
in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Securities
Corp. The Originator shall pay, and be billed directly for, all expenses
incurred by the Purchaser in connection with the issuance of the Certificates,
including, without limitation, printing fees incurred in connection with the
prospectus relating to the

                                        5

<PAGE>

Certificates, blue sky registration fees and expenses, fees and expenses of
Purchaser's counsel, fees of the rating agencies requested to rate the
Certificates, accountant's fees and expenses and the fees and expenses of the
Trustee and other out-of-pocket costs, if any.

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:

                  (a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;

                  (b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;

                  (c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;

                  (d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;

                  (e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Originator and any affiliate of the Originator
in compliance with all applicable federal, state and local laws and regulations
and the terms of the related Mortgage Note and Mortgage;

                  (f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);

                  (g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like

                                        6

<PAGE>

properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (iv) the
first lien on the Mortgaged Property, in the case of the Mortgages that are
second liens;

                  (h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;

                  (i) As of the last calendar day of March 2001 and with respect
to any Mortgage Loan that had a payment due on or before March 1, 2001, except
with respect to approximately 0.28% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on March 1, 2001 has been received. In addition, [__]% of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months and
[__]% of the Mortgage Loans have been 30 or more days delinquent for two payment
periods in the last 12 months;

                  (j) Neither the Originator nor the Seller has advanced funds,
or induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan under the Mortgage Loan;

                  (k) Neither the Originator nor the Seller has impaired,
waived, altered or modified the related Mortgage or Mortgage Note in any
material respect, or satisfied, canceled, rescinded or subordinated such
Mortgage or Mortgage Note in whole or in part or released all or any material
portion of the Mortgaged Property from the lien of the Mortgage, or executed any
instrument of release, cancellation, rescission or satisfaction of the Mortgage
Note or Mortgage;

                  (l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;

                  (m) No Mortgage Loan is subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or Mortgage
unenforceable in whole or in part, or subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of recission, set-off, counterclaim or defense has been asserted with
respect thereto;

                  (n) To Originator's knowledge, there is no proceeding pending
for the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

                                        7

<PAGE>

                  (o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Originator's rights under such policies, opinions or other instruments shall
be transferred and assigned to Purchaser upon sale and assignment of the
Mortgage Loans hereunder. The title insurance policy has been issued by a title
insurer licensed to do business in the jurisdiction where the Mortgaged Property
is located, insuring the original lender, its successor and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject to the exceptions contained in such policy.
Originator is the sole insured of such mortgagee title insurance policy, and
such mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. Neither the Originator nor any affiliate of the Originator has made,
and Originator has no knowledge of, any claims under such mortgagee title
insurance policy. Originator is not aware of any action by a prior holder and
neither Originator nor any affiliate of the Originator has done, by act or
omission, anything which could impair the coverage or enforceability of such
mortgagee title insurance policy or the accuracy of such attorney's opinion of
title;

                  (p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related 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 material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;

                  (q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;

                  (r) To the Originator's knowledge, 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;

                  (s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Originator's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;

                  (t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in

                                        8

<PAGE>

the Federal Register by the Federal Emergency Management Agency ("FEMA") as
having special flood hazards, a flood insurance policy is in effect which met
the requirements of FEMA at the time such policy was issued. The Mortgage
obligates the Mortgagor to maintain the Hazard Insurance, and, if applicable,
flood insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. The Mortgaged Property is covered by
Hazard Insurance;

                  (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

                  (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
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 (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

                  (w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;

                  (x) To the Originator's knowledge, there was no fraud involved
in the origination of the Mortgage Loan by the mortgagee or by the Mortgagor,
any appraiser or any other party involved in the origination of the Mortgage
Loan;

                  (y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

                                        9

<PAGE>

                  (z) To the best of the Originator's knowledge, 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;

                  (aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;

                  (bb) Each Mortgage Loan was originated or acquired 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 by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Originator's
underwriting criteria, which are at least as stringent as the underwriting
criteria set forth in the Prospectus Supplement. Each Mortgage Loan is currently
being serviced by the Originator and has been serviced by the Originator since
the date of origination of such Mortgage Loan;

                  (cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;

                  (dd) Other than with respect to not more than approximately
2.83% of the Mortgage Loans (by aggregate principal balance of the Mortgage
Loans as of the Cut-off Date), which are "balloon payment" mortgage loans, each
Mortgage Loan is fully amortizing;

                  (ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;

                  (ff) With respect to escrow deposits, 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 advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;

                  (gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Originator, the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor; (ii) paid by any source other than the
Mortgagor or (iii) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                                       10

<PAGE>

                  (hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;

                  (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.

                  (jj) 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;

                  (kk) 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;

                  (ll) There are no mechanics' or similar liens or claims that
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
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;

                  (mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;

                  (nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;

                  (oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;

                  (pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;

                  (qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;

                  (rr) The Mortgage Loans have original terms to maturity
ranging from 15 to 30 years;

                                       11

<PAGE>

                  (ss) With respect to the Mortgage Loans, no more than
approximately 31.9%; 10.41%; 7.23%; 5.47%, 4.81% and 4.63% of the Mortgage
Loans, by Cut-off Date Principal Balance will be secured by Mortgaged Properties
located in California, New York, Virginia, Massachussets, New Jersey and
Washington, respectively; and approximately 78.54% of the Mortgage Loans, by
Cut-off Date Principal Balance will be secured by real property with a single
family residence erected thereon and approximately 4.72% of the Mortgage Loans,
by the Cut-off Date Principal Balance are secured by condominiums;

                  (tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 95.00%;

                  (uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;

                  (vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $306,818.28;

                  (ww) 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;

                  (xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

                  (yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and

                  (zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-105(1)(I) of the UCC.

         Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

                           (i) The Originator is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
California and is and will remain in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of this
Agreement;

                           (ii) The Originator has the full power and authority
to execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Originator has duly authorized
the execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution

                                       12

<PAGE>

and delivery by the Purchaser and the Seller, constitutes a legal, valid and
binding obligation of the Originator, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization. At the time of the sale of each Mortgage Loan by
the Originator, the Originator had the full power and authority to hold each
Mortgage Loan and to sell each Mortgage Loan;

                           (iii) The execution and delivery of this Agreement by
the Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

                           (iv) The Originator is not in violation of, and the
execution and delivery of this Agreement by the Originator and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction over
the Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;

                           (v) The Originator is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act. No event
has occurred, including but not limited to a change in insurance coverage, which
would make the Originator unable to comply with HUD eligibility requirements or
which would require notification to HUD;

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

                           (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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

                           (ix) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Originator. The sale of the Mortgage Loans was in the ordinary course of
business of the Originator and the assignment and conveyance of the Mortgage

                                       13

<PAGE>

Notes and the Mortgages by the Originator are not subject to the bulk transfer
or any similar statutory provisions;

                           (x) The information delivered by the Originator to
the Purchaser with respect to the Originator's loan loss, foreclosure and
delinquency experience on mortgage loans underwritten to similar standards as
the Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects as of the date of such
report;

                           (xi) Except with respect to any statement regarding
the intentions of the Purchaser, or any other statement contained herein the
truth or falsity of which is dependant solely upon the actions of the Purchaser,
this Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

                           (xii) The Originator has not transferred the Mortgage
Loans with any intent to hinder, delay or defraud any of its creditors.

         Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:

                  (a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

                  (b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Originator, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;

                  (c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's certificate of trust or constitute a default under or
result in a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;

                  (d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will

                                       14

<PAGE>

not constitute a violation with respect to, any order or decree of any court or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over the Seller or its assets, which violation might have
consequences that would materially and adversely affect the condition (financial
or otherwise) or the operation of the Seller or its assets or might have
consequences that would materially and adversely affect the performance of its
obligations and duties hereunder; and

                  (e) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;

                  (f) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;

                  (g) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;

                  (h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller 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;

                  (i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and

                  (j) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated, the Seller shall have transferred
all of its right, title and interest in and to each

                                       15

<PAGE>

Mortgage Loan and the Trustee will hold good, marketable and indefeasible title
to, and be the sole owner of, each Mortgage Loan subject to no Liens.

         Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Subsections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment or
the examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator has no
knowledge, if it is discovered that the substance of any such representation and
warranty is inaccurate and the inaccuracy materially and adversely affects the
value of the related Mortgage Loan, or the interest therein of the Purchaser or
the Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

         Within 90 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Subsection 3.02 or
3.03 and such breach cannot be cured within 90 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Originator at the
Purchase Price. The Originator may, at the request of the Purchaser and assuming
the Originator has a Qualified Substitute Mortgage Loan, rather than repurchase
a deficient Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Originator does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit 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.

         At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to

                                       16

<PAGE>

the deficient or repurchased Mortgage Loan. In the event the Purchase Price is
deposited in the Collection Account, the Originator shall, simultaneously with
such deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase, the Mortgage Loan Schedule shall be amended to
reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.

         As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage Note endorsed as required therein. The
Originator shall deposit in the Collection Account the Monthly Payment less the
Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Originator. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Originator shall thereafter be entitled to
retain all amounts subsequently received by the Originator in respect of such
Deleted Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage
Loans shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 3.01, 3.02 or 3.03.

         It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

                  It is understood and agreed that the obligations of the
Originator set forth in Section 3.04 to cure, repurchase and substitute for a
defective Mortgage Loan and to indemnify the Purchaser as provided in Section
5.01 constitute the sole remedies of the Purchaser respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 3.01.

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS

         Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby
covenants that except for the transfer hereunder, neither the Originator nor the
Seller will sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Mortgage Loan, or any
interest therein; the Originator will notify the Trustee, as assignee of the
Purchaser, of the existence of any Lien on any Mortgage Loan immediately upon
discovery thereof, and the Originator will defend the right, title and interest
of the Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting

                                       17

<PAGE>

the validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.

                  (a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
information provided by the Originator to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be provided
hereby, and disseminated to PricewaterhouseCoopers LLP or prospective investors
(directly or indirectly through available information systems) in connection
with the issuance, marketing or offering of the Certificates. This indemnity
agreement will be in addition to any liability which the Originator may
otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller and the Originator, each of their respective officers, directors and each
person or entity who controls the Seller, the Originator or any such person,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Seller, the Originator or any such person or entity may become
subject, under the Securities Act or otherwise, and will reimburse the Seller
and/or the Originator for any legal or other expenses incurred by the Seller,
the Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the

                                       18

<PAGE>

Prospectus Supplement or the omission or the alleged omission to state therein a
material fact necessary in order to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement, in the
light of the circumstances under which they were made, not misleading, but only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission is not contained in the Originator Information in the
Prospectus Supplement. This indemnity agreement will be in addition to any
liability which the Purchaser may otherwise have.

                  (c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

                  If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

                  Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.

                                       19

<PAGE>

                  Each indemnified party, as a condition of the indemnity
agreements contained in Section 5.01 (a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

                  (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each officer and
director of the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Purchaser, each director of the Originator, each
officer of the Originator, and each person, if any, who controls the Originator
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Originator and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Seller.

                  (e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior

                                       20

<PAGE>

servicing of the Mortgage Loans by reason of any acts, omissions, or alleged
acts or omissions of the Originator, the Seller or any servicer. The Originator
shall immediately notify the Purchaser, the Trustee and each Certificateholder
if a claim is made by a third party with respect to this Agreement. The
Originator shall assume the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Purchaser, the Trustee or any such person or entity and/or any Certificateholder
in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION

         Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate, except for the Originator's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS

         Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.

         Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
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 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

         if to the Originator:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.

         if to the Purchaser:

                                       21

<PAGE>

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.

         if to the Seller:

                  Option One Owner Trust 2001-1A
                  c/o Wilmington Trust Company
                  One Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.

         Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.

         Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

         Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any Series of Certificates representing interests in the
Mortgage Loans.

         Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, the Originator will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request and
will provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.

                                       22

<PAGE>

         Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.

         Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer. The
NIMs Insurer shall be a third party beneficiary hereof and may enforce the terms
hereof as if a party hereto. The obligations of the Seller and the Originator
under this Agreement cannot be assigned or delegated to a third party without
the consent of the Purchaser which consent shall be at the Purchaser's sole
discretion, except that the Purchaser acknowledges and agrees that the Seller or
the Originator may assign its obligations hereunder to any Person into which the
Seller or the Originator is merged or any corporation resulting from any merger,
conversion or consolidation to which the Seller or the Originator is a party or
any Person succeeding to the business of the Seller or the Originator. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a Series of
Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller and the
Originator each acknowledge and consent to the assignment by the Purchaser to
the Trustee of all of the Purchaser's rights against the Seller and the
Originator pursuant to this Agreement insofar as such rights relate to Mortgage
Loans transferred to the Trustee and to the enforcement or exercise of any right
or remedy against the Seller or the Originator pursuant to this Agreement by the
Trustee. Such enforcement of a right or remedy by the Trustee shall have the
same force and effect as if the right or remedy had been enforced or exercised
by the Purchaser directly.

         Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

         Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by
the parties to this Agreement that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or

                                       23

<PAGE>

failure of any obligation, representation, warranty or covenant made or
undertaken by the Seller under this Agreement or any other document.

                                       24

<PAGE>

                  IN WITNESS WHEREOF, the Seller, the Originator and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.

                                    OPTION ONE MORTGAGE ACCEPTANCE
                                    CORPORATION,
                                        as Purchaser

                                    By:_____________________________
                                       Name:
                                       Title:

                                    OPTION ONE MORTGAGE CORPORATION
                                        as Originator

                                    By:_____________________________
                                       Name:
                                       Title:

                                    OPTION ONE OWNER TRUST 2001-1A
                                        as Seller

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

                                    By:_____________________________
                                       Name:
                                       Title:

<PAGE>

                                   SCHEDULE I

                                 MORTGAGE LOANS
                                 --------------

                             AVAILABLE UPON REQUEST

                                       I-1

<PAGE>

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

                        OPTION ONE MORTGAGE CORPORATION,

                                  as Originator

                         OPTION ONE OWNER TRUST 2001-2,

                                    as Seller

                                       and

                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser

                        MORTGAGE LOAN PURCHASE AGREEMENT

                           Dated as of April 23, 2001

                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2001-2

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----

                                                    ARTICLE I.

                                                    DEFINITIONS

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

                                                    ARTICLE II.

                                 SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.................................................................2
         Section 2.02      OBLIGATIONS OF ORIGINATOR UPON SALE....................................................2
         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5

                                                   ARTICLE III.

                                REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS...............6
         Section 3.02      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE ORIGINATOR..................12
         Section 3.03      ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER......................14
         Section 3.04      REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................16

                                                    ARTICLE IV.

                                              ORIGINATOR'S COVENANTS

         Section 4.01      COVENANTS OF THE ORIGINATOR...........................................................17

                                                    ARTICLE V.

                                INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.......................................................................18

                                        i

<PAGE>

                                                    ARTICLE VI.

                                                    TERMINATION

         Section 6.01      TERMINATION...........................................................................21

                                                   ARTICLE VII.

                                             MISCELLANEOUS PROVISIONS

         Section 7.01      AMENDMENT.............................................................................21
         Section 7.02      GOVERNING LAW.........................................................................21
         Section 7.03      NOTICES...............................................................................21
         Section 7.04      SEVERABILITY OF PROVISIONS............................................................22
         Section 7.05      COUNTERPARTS..........................................................................22
         Section 7.06      FURTHER AGREEMENTS....................................................................22
         Section 7.07      INTENTION OF THE PARTIES..............................................................23
         Section 7.08      SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................23
         Section 7.09      SURVIVAL..............................................................................23
         Section 7.10      OWNER TRUSTEE..................................................................................23
</TABLE>

                                       ii

<PAGE>

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of April 23, 2001
(the "Agreement"), among Option One Mortgage Corporation (the "Originator"),
Option One Owner Trust 2001-2 (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").

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

                  WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and

                  WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

                  WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and

                  WHEREAS, the Seller is an indirect subsidiary of the
Originator and the Originator is the administrator of the Seller; and

                  WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and

                  WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of April 1, 2001 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Originator as master servicer and Wells
Fargo Bank Minnesota, N.A. as trustee (the "Trustee"), the Purchaser will convey
the Mortgage Loans to Option One Mortgage Loan Trust 2001-2 (the "Trust");

                  WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.

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

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.

                                        1

<PAGE>

         "ORIGINATOR INFORMATION": The information in the Prospectus Supplement
         as follows: under "SUMMARY OF TERMS--Mortgage Loans," the fifth bullet
         point under "RISK FACTORS--Unpredictability of Prepayments and Effect
         on Yields," the second sentence under "RISK FACTORS--Balloon Loan
         Risks," the fourth bullet point under "RISK FACTORS--Interest Generated
         by the Mortgage Loans May Be Insufficient to Maintain
         Overcollateralization," the third and fourth sentences under "RISK
         FACTORS--Effect of Mortgage Loan Rates on the Class A Certificates and
         the Mezzanine Certificates," the second sentence under "RISK
         FACTORS--High Loan-to-Value Ratios Increase Risk of Loss," the first
         and third sentences under "RISK FACTORS--Nature of the Mortgage Loans,"
         "THE MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the fifth
         sentence of the first paragraph, the third and fourth sentences of the
         second paragraph and the sixth and ninth sentences of the fourth
         paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

         Section 2.01      SALE OF MORTGAGE LOANS.

                  (a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, assign, set over, and otherwise convey to
the Purchaser, without recourse, (i) all of its right, title and interest in and
to each Mortgage Loan, including the related Cut-off Date Principal Balance, all
interest accruing thereon on and after the Cut-off Date and all collections in
respect of interest and principal due on or after the Cut-off Date; (ii)
property which secured such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance
policies (including the PMI Policy) in respect of the Mortgage Loans and (iv)
all proceeds of any of the foregoing.

                  (b) In connection with the transactions contemplated by
Section 2.08 of the Pooling and Servicing Agreement, the Seller hereby agrees
that the Purchaser shall be under no obligation to purchase any Subsequent
Mortgage Loans unless (i) the conditions precedent contained in Section 2.08 of
the Pooling and Servicing Agreement and the Subsequent Transfer Instrument,
substantially in the form of Exhibit N of the Pooling and Servicing Agreement,
are satisfied and (ii) each Subsequent Mortgage Loan satisfies the
representations and warranties contained in Section 3.01 of this Agreement. The
sale of Subsequent Mortgage Loans by the Seller to the Depositor shall be
effected in accordance with the terms of Section 2.08 of the Pooling and
Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase Agreement
substantially in the form of this Agreement.

         Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator further agrees, at
its own expense on or prior to the Closing Date, (a) to cause the books and
records of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such

                                        2

<PAGE>

Mortgage Loan, as of the Cut-off Date, (i) its account number and (ii) the
Cut-off Date Principal Balance. Such file, which forms a part of Exhibit D to
the Pooling and Servicing Agreement, shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this Agreement and
(c) to deliver to the Purchaser and the Trustee the ETT (as defined in the PMI
Policy) with respect to the Mortgage Loans.

                  In connection with any conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Trustee, as
assignee of the Purchaser, on or before the Closing Date, the following
documents or instruments with respect to each Mortgage Loan:

                           (i) the original Mortgage Note, endorsed either (A)
in blank, in which case the Trustee shall cause the endorsement to be completed
or (B) in the following form: "Pay to the order of Wells Fargo Bank Minnesota,
N.A., as Trustee, 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 or Subsequent Cut-off Date Principle Balance, as
applicable, of which is less than or equal to 1.00% of the Pool Balance as of
the Cut-off Date, or the Subsequent Cut-off Date, as applicable;

                           (ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording thereon or,
if such Mortgage or power of attorney has been submitted for recording but has
not been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney, as the
case may be, certified to be a true and complete copy of the original submitted
for recording;

                           (iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Wells Fargo Bank Minnesota, N.A., as Trustee,
without recourse";

                           (iv) an original copy of any intervening assignment
of Mortgage showing a complete chain of assignments;

                           (v) the original or a certified copy of lender's
title insurance policy; and

                           (vi) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any.

         The Originator hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in the general accounting records
of the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

         If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date (or Subsequent Transfer Date, with respect to
Subsequent Mortgage Loans) been submitted for

                                        3

<PAGE>

recording but either (x) has not been returned from the applicable public
recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Seller to deliver
such documents shall be deemed to be satisfied upon (1) delivery to the Trustee
or the Custodian no later than the Closing Date (or Subsequent Closing Date,
with respect to Subsequent Mortgage Loans), of a copy of each such document
certified by the Originator in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Originator, delivery to the Trustee or the Custodian, promptly upon receipt
thereof of either the original or a copy of such document certified by the
applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

         Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 90 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.

         The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.

         The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.

         The Originator shall cause the Assignments which were delivered in
blank to be completed and shall cause all Assignments referred to in Section
2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv) hereof to be
recorded; PROVIDED, HOWEVER, the Originator 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 Originator to
the NIMs Insurer, the Trustee and the Rating Agencies on or before the Closing
Date, 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, each Assignment shall be
submitted for recording by the Originator in the manner described above, at no
expense to the Trust Fund or

                                        4

<PAGE>

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 Master Servicer, (iv) the occurrence
of a servicing transfer as described in Section 7.02 hereof or (v) if the
Originator is not the Master Servicer and with respect to any one Assignment the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage and (vi) any Mortgage Loan that is 90 days or more
Delinquent. The Originator shall be required to deliver such assignments for
recording within 45 days of the Closing Date. The Originator 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 Originator shall promptly have a substitute
Assignment prepared or have such defect cured, as the case may be, and
thereafter cause each such Assignment to be duly recorded. In the event that any
Mortgage Note is endorsed in blank as of the Closing Date, promptly following
the Closing Date the Depositor shall cause to be completed such endorsements
"Pay to the order of Wells Fargo Bank Minnesota, N.A., as Trustee, without
recourse."

         The Originator shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Pooling and Servicing
Agreement within two weeks of their execution; PROVIDED, HOWEVER, that the
Originator shall provide the Purchaser with a certified true copy of any such
document submitted for recordation within two weeks of its execution, and shall
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within 270 days of its submission for recordation.
In the event that the Originator cannot provide a copy of such document
certified by the public recording office within such 270 day period, the
Originator shall deliver to the Purchaser, within such 270 day period, an
Officer's Certificate of the Master Servicer which shall (A) identify the
recorded document, (B) state that the recorded document has not been delivered
to the Purchaser due solely to a delay caused by the public recording office,
(C) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, if known, and
(D) specify the date the applicable recorded document is expected to be
delivered to the Purchaser, and, upon receipt of a copy of such document
certified by the public recording office, the Originator shall immediately
deliver such document to the Purchaser. In the event the appropriate public
recording office will not certify as to the accuracy of such document, the
Originator shall deliver a copy of such document certified by an officer of the
Originator to be a true and complete copy of the original to the Purchaser.

         Section 2.03      PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

         In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to 121,440,987.30 and (ii) a 55.08% percentage interest
in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Securities
Corp. The Originator shall pay, and be billed directly for, all expenses
incurred by the Purchaser in connection with the issuance of the Certificates,
including, without limitation, printing fees incurred in connection with the
prospectus

                                        5

<PAGE>

relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the rating agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:

                  (a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;

                  (b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;

                  (c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;

                  (d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;

                  (e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Originator and any affiliate of the Originator
in compliance with all applicable federal, state and local laws and regulations
and the terms of the related Mortgage Note and Mortgage;

                  (f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);

                  (g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like

                                        6

<PAGE>

properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (iv) the
first lien on the Mortgaged Property, in the case of the Mortgages that are
second liens;

                  (h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;

                  (i) As of the last calendar day of March 2001 and with respect
to any Mortgage Loan that had a payment due on or before March 1, 2001, except
with respect to approximately 3.21% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on March 1, 2001 has been received. In addition, no more than [__]%
of the Mortgage Loans have been 30 or more days delinquent in the last 12 months
and no more than [__]% of the Mortgage Loans have been 30 or more days
delinquent for two payment periods in the last 12 months;

                  (j) Neither the Originator nor the Seller has advanced funds,
or induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan under the Mortgage Loan;

                  (k) Neither the Originator nor the Seller has impaired,
waived, altered or modified the related Mortgage or Mortgage Note in any
material respect, or satisfied, canceled, rescinded or subordinated such
Mortgage or Mortgage Note in whole or in part or released all or any material
portion of the Mortgaged Property from the lien of the Mortgage, or executed any
instrument of release, cancellation, rescission or satisfaction of the Mortgage
Note or Mortgage;

                  (l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;

                  (m) No Mortgage Loan is subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or Mortgage
unenforceable in whole or in part, or subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of recission, set-off, counterclaim or defense has been asserted with
respect thereto;

                  (n) To Originator's knowledge, there is no proceeding pending
for the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

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<PAGE>

                  (o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Originator's rights under such policies, opinions or other instruments shall
be transferred and assigned to Purchaser upon sale and assignment of the
Mortgage Loans hereunder. The title insurance policy has been issued by a title
insurer licensed to do business in the jurisdiction where the Mortgaged Property
is located, insuring the original lender, its successor and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject to the exceptions contained in such policy.
Originator is the sole insured of such mortgagee title insurance policy, and
such mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. Neither the Originator nor any affiliate of the Originator has made,
and Originator has no knowledge of, any claims under such mortgagee title
insurance policy. Originator is not aware of any action by a prior holder and
neither Originator nor any affiliate of the Originator has done, by act or
omission, anything which could impair the coverage or enforceability of such
mortgagee title insurance policy or the accuracy of such attorney's opinion of
title;

                  (p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related 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 material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;

                  (q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;

                  (r) To the Originator's knowledge, 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;

                  (s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Originator's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;

                  (t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in

                                        8

<PAGE>

the Federal Register by the Federal Emergency Management Agency ("FEMA") as
having special flood hazards, a flood insurance policy is in effect which met
the requirements of FEMA at the time such policy was issued. The Mortgage
obligates the Mortgagor to maintain the Hazard Insurance, and, if applicable,
flood insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. The Mortgaged Property is covered by
Hazard Insurance;

                  (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

                  (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
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 (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

                  (w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;

                  (x) To the Originator's knowledge, there was no fraud involved
in the origination of the Mortgage Loan by the mortgagee or by the Mortgagor,
any appraiser or any other party involved in the origination of the Mortgage
Loan;

                  (y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

                                        9

<PAGE>

                  (z) To the best of the Originator's knowledge, 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;

                  (aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;

                  (bb) Each Mortgage Loan was originated or acquired 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 by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Originator's
underwriting criteria, which are at least as stringent as the underwriting
criteria set forth in the Prospectus Supplement. Each Mortgage Loan is currently
being serviced by the Originator and has been serviced by the Originator since
the date of origination of such Mortgage Loan;

                  (cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;

                  (dd) Other than with respect to not more than approximately
2.92% of the Mortgage Loans (by aggregate principal balance of the Mortgage
Loans as of the Cut-off Date), which are "balloon payment" mortgage loans, each
Mortgage Loan is fully amortizing;

                  (ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;

                  (ff) With respect to escrow deposits, 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 advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;

                  (gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Originator, the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor; (ii) paid by any source other than the
Mortgagor or (iii) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                                       10

<PAGE>

                  (hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;

                  (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.

                  (jj) 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;

                  (kk) 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;

                  (ll) There are no mechanics' or similar liens or claims that
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
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;

                  (mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;

                  (nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;

                  (oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;

                  (pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;

                  (qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;

                  (rr) The Mortgage Loans have original terms to maturity
ranging from 15 to 30 years;

                                       11

<PAGE>

                  (ss) With respect to the Mortgage Loans, no more than
approximately 36.97%; 7.68%; 6.94%; 4.96%, 4.73% and 3.91% of the Mortgage
Loans, by Cut-off Date Principal Balance will be secured by Mortgaged Properties
located in California, New York, Florida, Massachusetts, Texas and New Jersey,
respectively; and approximately 72.48% of the Mortgage Loans, by Cut-off Date
Principal Balance will be secured by real property with a single family
residence erected thereon and approximately 3.84% of the Mortgage Loans, by the
Cut-off Date Principal Balance are secured by condominiums;

                  (tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 95.00%;

                  (uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;

                  (vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $391,745.12;

                  (ww) 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;

                  (xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

                  (yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and

                  (zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-105(1)(I) of the UCC.

         Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

                           (i) The Originator is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
California and is and will remain in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of this
Agreement;

                           (ii) The Originator has the full power and authority
to execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Originator has duly authorized
the execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution

                                       12

<PAGE>

and delivery by the Purchaser and the Seller, constitutes a legal, valid and
binding obligation of the Originator, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization. At the time of the sale of each Mortgage Loan by
the Originator, the Originator had the full power and authority to hold each
Mortgage Loan and to sell each Mortgage Loan;

                           (iii) The execution and delivery of this Agreement by
the Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

                           (iv) The Originator is not in violation of, and the
execution and delivery of this Agreement by the Originator and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction over
the Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;

                           (v) The Originator is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act. No event
has occurred, including but not limited to a change in insurance coverage, which
would make the Originator unable to comply with HUD eligibility requirements or
which would require notification to HUD;

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

                           (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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

                           (ix) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Originator. The sale of the Mortgage Loans was in the ordinary course of
business of the Originator and the assignment and conveyance of the Mortgage

                                       13

<PAGE>

Notes and the Mortgages by the Originator are not subject to the bulk transfer
or any similar statutory provisions;

                           (x) The information delivered by the Originator to
the Purchaser with respect to the Originator's loan loss, foreclosure and
delinquency experience on mortgage loans underwritten to similar standards as
the Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects as of the date of such
report;

                           (xi) Except with respect to any statement regarding
the intentions of the Purchaser, or any other statement contained herein the
truth or falsity of which is dependant solely upon the actions of the Purchaser,
this Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

                           (xii) The Originator has not transferred the Mortgage
Loans with any intent to hinder, delay or defraud any of its creditors.

         Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:

                  (a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

                  (b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Originator, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;

                  (c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's certificate of trust or constitute a default under or
result in a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;

                  (d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will

                                       14

<PAGE>

not constitute a violation with respect to, any order or decree of any court or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over the Seller or its assets, which violation might have
consequences that would materially and adversely affect the condition (financial
or otherwise) or the operation of the Seller or its assets or might have
consequences that would materially and adversely affect the performance of its
obligations and duties hereunder; and

                  (e) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;

                  (f) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;

                  (g) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;

                  (h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller 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;

                  (i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and

                  (j) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated, the Seller shall have transferred
all of its right, title and interest in and to each

                                       15

<PAGE>

Mortgage Loan and the Trustee will hold good, marketable and indefeasible title
to, and be the sole owner of, each Mortgage Loan subject to no Liens.

         Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Subsections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment or
the examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator has no
knowledge, if it is discovered that the substance of any such representation and
warranty is inaccurate and the inaccuracy materially and adversely affects the
value of the related Mortgage Loan, or the interest therein of the Purchaser or
the Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

         Within 90 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Subsection 3.02 or
3.03 and such breach cannot be cured within 90 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Originator at the
Purchase Price. The Originator may, at the request of the Purchaser and assuming
the Originator has a Qualified Substitute Mortgage Loan, rather than repurchase
a deficient Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Originator does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit 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.

         At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to

                                       16

<PAGE>

the deficient or repurchased Mortgage Loan. In the event the Purchase Price is
deposited in the Collection Account, the Originator shall, simultaneously with
such deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase, the Mortgage Loan Schedule shall be amended to
reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.

         As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage Note endorsed as required therein. The
Originator shall deposit in the Collection Account the Monthly Payment less the
Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Originator. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Originator shall thereafter be entitled to
retain all amounts subsequently received by the Originator in respect of such
Deleted Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage
Loans shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 3.01, 3.02 or 3.03.

         It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

                  It is understood and agreed that the obligations of the
Originator set forth in Section 3.04 to cure, repurchase and substitute for a
defective Mortgage Loan and to indemnify the Purchaser as provided in Section
5.01 constitute the sole remedies of the Purchaser respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 3.01.

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS

         Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby
covenants that except for the transfer hereunder, neither the Originator nor the
Seller will sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Mortgage Loan, or any
interest therein; the Originator will notify the Trustee, as assignee of the
Purchaser, of the existence of any Lien on any Mortgage Loan immediately upon
discovery thereof, and the Originator will defend the right, title and interest
of the Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting

                                       17

<PAGE>

the validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

         Section 5.01      INDEMNIFICATION.

                  (a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
information provided by the Originator to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be provided
hereby, and disseminated to PricewaterhouseCoopers LLP or prospective investors
(directly or indirectly through available information systems) in connection
with the issuance, marketing or offering of the Certificates. This indemnity
agreement will be in addition to any liability which the Originator may
otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller and the Originator, each of their respective officers, directors and each
person or entity who controls the Seller, the Originator or any such person,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Seller, the Originator or any such person or entity may become
subject, under the Securities Act or otherwise, and will reimburse the Seller
and/or the Originator for any legal or other expenses incurred by the Seller,
the Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the

                                       18

<PAGE>

Prospectus Supplement or the omission or the alleged omission to state therein a
material fact necessary in order to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement, in the
light of the circumstances under which they were made, not misleading, but only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission is not contained in the Originator Information in the
Prospectus Supplement. This indemnity agreement will be in addition to any
liability which the Purchaser may otherwise have.

                  (c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

                  If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

                  Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.

                                       19

<PAGE>

                  Each indemnified party, as a condition of the indemnity
agreements contained in Section 5.01 (a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

                  (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each officer and
director of the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Purchaser, each director of the Originator, each
officer of the Originator, and each person, if any, who controls the Originator
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Originator and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Seller.

                  (e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior

                                       20

<PAGE>

servicing of the Mortgage Loans by reason of any acts, omissions, or alleged
acts or omissions of the Originator, the Seller or any servicer. The Originator
shall immediately notify the Purchaser, the Trustee and each Certificateholder
if a claim is made by a third party with respect to this Agreement. The
Originator shall assume the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Purchaser, the Trustee or any such person or entity and/or any Certificateholder
in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION

         Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate, except for the Originator's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS

         Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.

         Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
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 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

         if to the Originator:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.

         if to the Purchaser:

                                       21

<PAGE>

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.

         if to the Seller:

                  Option One Owner Trust 2001-2
                  c/o Wilmington Trust Company
                  One Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.

         Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.

         Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.

         Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any Series of Certificates representing interests in the
Mortgage Loans.

         Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, the Originator will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request and
will provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.

                                       22

<PAGE>

         Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.

         Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer. The
NIMs Insurer shall be a third party beneficiary hereof and may enforce the terms
hereof as if a party hereto. The obligations of the Seller and the Originator
under this Agreement cannot be assigned or delegated to a third party without
the consent of the Purchaser which consent shall be at the Purchaser's sole
discretion, except that the Purchaser acknowledges and agrees that the Seller or
the Originator may assign its obligations hereunder to any Person into which the
Seller or the Originator is merged or any corporation resulting from any merger,
conversion or consolidation to which the Seller or the Originator is a party or
any Person succeeding to the business of the Seller or the Originator. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a Series of
Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller and the
Originator each acknowledge and consent to the assignment by the Purchaser to
the Trustee of all of the Purchaser's rights against the Seller and the
Originator pursuant to this Agreement insofar as such rights relate to Mortgage
Loans transferred to the Trustee and to the enforcement or exercise of any right
or remedy against the Seller or the Originator pursuant to this Agreement by the
Trustee. Such enforcement of a right or remedy by the Trustee shall have the
same force and effect as if the right or remedy had been enforced or exercised
by the Purchaser directly.

         Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

         Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by
the parties to this Agreement that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or

                                       23

<PAGE>

failure of any obligation, representation, warranty or covenant made or
undertaken by the Seller under this Agreement or any other document.

                                       24

<PAGE>

                  IN WITNESS WHEREOF, the Seller, the Originator and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.

                                     OPTION ONE MORTGAGE ACCEPTANCE
                                     CORPORATION,
                                         as Purchaser

                                     By:__________________________________
                                        Name:
                                        Title:

                                     OPTION ONE MORTGAGE CORPORATION
                                         as Originator

                                     By:__________________________________
                                        Name:
                                        Title:

                                     OPTION ONE OWNER TRUST 2001-2
                                         as Seller

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

                                     By:__________________________________
                                        Name:
                                        Title:

<PAGE>

                                   SCHEDULE I

                                 MORTGAGE LOANS
                                 --------------

                             AVAILABLE UPON REQUEST

                                       I-1

<PAGE>

                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                            [AVAILABLE UPON REQUEST]

                                       D-1

<PAGE>

                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      Wells Fargo Bank Minnesota, N.A.,
         1015 10th Avenue S.E.
         Minneapolis, MN 55414
         Attn: Inventory Control

          Re:  Pooling and Servicing Agreement dated as of April 1, 2001 among
               Option One Mortgage Acceptance Corporation, as Depositor, Option
               One Mortgage Corporation, as Master Servicer and Wells Fargo Bank
               Minnesota, N.A., as Trustee
               -----------------------------------------------------------------

     In connection with the administration of the Mortgage Loans held by you as
Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or 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 Trustee's Mortgage File:
_______________________________________________________________________________
_______________________________________________________________________________

                                          By:__________________________________
                                                   (authorized signer)

                                          Issuer: _____________________________

                                       E-1

<PAGE>

                                          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 TRUSTEE'S INITIAL CERTIFICATION

                                                   April __, 2001

Option One Mortgage Acceptance Corporation Option One Mortgage Corporation 3 Ada
3 Ada Irvine, California 92618 Irvine, California 92618 Radian Insurance Inc.
1601 Market Street
Philadelphia, PA 19103

     Re:  Pooling and Servicing Agreement, dated as of April 1, 2001, among
          Option One Mortgage Acceptance Corporation, Option One Mortgage
          Corporation and Wells Fargo Bank Minnesota, N.A., Asset-Backed
          Certificates, Series 2001-2
          ------------------------------------------------------------------

Ladies and Gentlemen:

          Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

          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 pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.

                                          WELLS FARGO BANK MINNESOTA,
                                          N.A.

                                          By: _______________________________
                                          Name:
                                          Title:

                                      F-1-1

<PAGE>

                                   EXHIBIT F-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                    _________________________
                                                               [Date]

Option One Mortgage Acceptance                 Radian Insurance Inc.
Corporation                                    1601 Market Street
3 Ada                                          Philadelphia, PA 19103
Irvine, California  92618

     Re:  Pooling and Servicing Agreement (the "Pooling and Servicing
          Agreement"), dated as of April 1, 2001 among Option One Mortgage
          Acceptance Corporation, as Depositor, Option One Mortgage Corporation,
          as Master Servicer and Wells Fargo Bank Minnesota, N.A., as Trustee
          with respect to Option One Mortgage Loan Trust 2001-2, Asset-Backed
          Certificates, Series 2001-2
          ----------------------------------------------------------------------

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 (or its custodian) has received the applicable
documents listed in Section 2.01 of the Pooling and Servicing Agreement.

     The undersigned hereby certifies that 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 is correct.

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                          WELLS FARGO BANK MINNESOTA, N.A., as
                                          Trustee

                                          By:__________________________________
                                          Name:
                                          Title:

                                      F-2-1

<PAGE>

                                   EXHIBIT F-3

                        FORM OF RECEIPT OF MORTGAGE NOTE

Option One Mortgage Acceptance
Corporation                                  Radian Insurance Inc.
3 Ada                                        1601 Market Street
Irvine, California  92618                    Philadelphia, PA 19103

                      Re:   Option One Mortgage Loan Trust 2001-2,
                            Asset-Backed Certificates Series 2001-2
                            ---------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of April 1, 2001, among Option One Mortgage Acceptance Corporation as Depositor,
Option One Mortgage Corporation as Master Servicer and Wells Fargo Bank
Minnesota, N.A. as Trustee (the "Trustee"), we hereby acknowledge the receipt of
the original Mortgage Notes (a copy of which is attached hereto as Exhibit 1)
with any exceptions thereto listed on Exhibit 2.

                                          WELLS FARGO BANK MINNESOTA,
                                          N.A., as Trustee

                                          By:_______________________________
                                          Name:
                                          Title:

                                      F-3-1

<PAGE>

                                    EXHIBIT G

                           LOSS MITIGATION PROCEDURES

                                       G-1

<PAGE>

          FAS 140 P &S RELEVANT PROVISIONS - RECOVERY FOR DEFAULT LOANS
          -------------------------------------------------------------

COLLECTIONS DEPARTMENT PRE-FORECLOSURE PROCESS:
-----------------------------------------------

At 33 calendar days delinquent, all borrowers are sent a 30-day pre-foreclosure
demand letter. Borrowers in states that require more than a 30-day period are
given the amount of time specified by state law.

Borrowers who are unable to pay the total amount past due are reviewed for
foreclosure based upon the following criteria;

A.            "Early Indicator" default risk score. Those borrowers with risk
              scores that suggest a strong statistical likelihood of continuing
              default, are approved for foreclosure as soon as 48 hours after
              expiration of the demand letter (approximately 64 calendar days
              delinquent).
B.            Moderate risk with willingness and ability. Those borrowers with a
              moderate statistical likelihood of continuing default who
              demonstrate a willingness and ability to pay (as defined above),
              are solicited for extended (up to 6 months) repayment plans in
              which a portion of all past due payments are divided equally by 6
              and a monthly payment schedule is established which consists of a
              "good faith" payment of some portion of the past due amount, one
              regular monthly installment and 1/6th of the remaining past due
              amount.
C.            Low risk with willingness and ability. Those borrowers with a low
              risk of continuing default are actively solicited for placement on
              a repayment plan and/or are granted additional time to resolve
              their financial difficulties informally in arrangement with a loan
              counselor. Foreclosure is not typically initiated if or until the
              loan becomes 90+ days delinquent and the borrower is unable or
              unwilling to continue to make reasonable repayment arrangements.
D.            Broken repayment plans. Those borrowers who are placed on extended
              repayment plans but fail to make their scheduled payments, are
              approved for foreclosure as soon as 48 hours after the payment
              plan is broken.

All borrowers are given all reasonable opportunities to pay the total amount
past due (including all contractually permitted fees and charges) prior to the
expiration of the 30 day demand letters. Borrowers who fail to contact Option
One collections when past due, who repeatedly break promises to pay, who have a
willingness but no financial ability, or apparent financial ability but no
willingness, may be referred to foreclosure at any time after the expiration of
the 30-day demand letter, without regard to any other factor, but as a general
rule, a loan is referred to foreclosure no later than the 120th day of
delinquency. The guidelines outlined herein presuppose at least some reasonable
degree of willingness and ability.

PRE-CONVEYANCE OF TITLE:
------------------------

Initial contact is made for discovery of mortgagor's intent and a minimum
requirement of two attempted contacts per month is required. In general, contact
made or attempted within the first 48 hours establishes categories as follows:
Willingness and Ability, No Willingness or Willingness and No Ability. Each
category provides a subset of options for loss mitigation efforts and the
options are ranked within each category as follows:

1.       WILLINGNESS AND ABILITY - Typically the mortgagor(s) reason for default
         is temporary and a foreseeable solution is probable. The standard
         options negotiated, ranked in priority are:
               A.       Full Reinstatement
               B.       Payoff

<PAGE>

               C.       Standard 6 month payment plan
               D.       Extension of the payment plan
               E.       Forbearance
               F.       PreSale/Pre-Foreclosure Sale
               G.       Short Payoff
               H.       Modification

2.       NO WILLINGNESS - Typically the mortgagor(s) is unclear of options to
         mitigate default and avoids all calls or is brief and discloses little
         when contact is made. In this category efforts are made to continue
         attempts to contact and/or counsel mortgagor(s). When no contact is
         made, Skip Tracing, promotional items and/or letters are mailed in
         attempts to stimulate communication.

3.       WILLINGNESS AND NO ABILITY - Mortgagor(s) want to save home or remedy
         the default, however do not have resources to do so. In this scenario,
         The standard options negotiated, ranked in priority are:
               A.       Payoff
               B.       Assumption
               C.       PreSale/Pre-Foreclosure Sale
               D.       Short Payoff
               E.       Deed In Lieu of Foreclosure
               F.       Write-Off
               G.       Modification

Foreclosure process is also running parallel to the Loss Mitigation efforts and
in the event no workout is achieved then the Master Servicer obtains title
through foreclosure sale, from which the REO Department will attempt to seek
complete recovery from the sale of said property.

LIST OF ALL LOSS MITIGATION OPTIONS USED:
     -        Full Reinstatement
     -        Payoff
     -        Six (6) Month Re-Payment Plan
     -        Extension of Six (6) Month Payment Plan
     -        Forbearance
     -        Short Payoff
     -        Presale/Pre-Foreclosure Sale
     -        Assumption
     -        Modification
     -        Deed In Lieu of Foreclosure
     -        Write-off

CONVEYANCE OF TITLE:
--------------------

Once title is acquired as a result of foreclosure sale, Deed In Lieu of
Foreclosure or otherwise, the property is assigned to an REO Agent for complete
and timely disposition. REO Broker/Agents are selected and retained using the
following criteria:

     -        Experience
     -        Possess Error and Omissions Insurance
     -        Licensed to sell Real Property in the related region
     -        Adhere to Option One Mortgage Corporation's Standards

<PAGE>

Review of the current values obtained on the subject property will establish the
Net Present Value and the marketing strategy. An analysis worksheet is completed
to establish the marketing strategy on the property and to project the Net
Present Value.

<PAGE>

                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

     Personally appeared before me the undersigned authority to administer
oaths, _______________________________ who first being duly sworn deposes and
says: Deponent is ____________________________ of ____________________________,
successor by merger to _______________________________ ("Seller") and who has
personal knowledge of the facts set out in this affidavit.

     On _______________________________, _______________________________ did
execute and deliver a promissory note in the principal amount of $___________.

     That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

     Seller executes this Affidavit for the purpose of inducing Wells Fargo Bank
Minnesota, N.A., as trustee on behalf of Option One Mortgage Loan Trust 2001-2,
Asset-Backed Certificates Series 2001-2, to accept the transfer of the above
described loan from Seller.

     Seller agrees to indemnify Wells Fargo Bank Minnesota, N.A., Option One
Mortgage Acceptance Corporation and Option One Mortgage Corporation harmless for
any losses incurred by such parties resulting from the above described
promissory note has been lost or misplaced.

By:_______________________________
   _______________________________

STATE OF         )
                 )        SS:
COUNTY OF        )

     On this ______ day of ______________, 20_, before me, a Notary Public, in
and for said County and State, appeared _______________________________, who
acknowledged the extension of the foregoing and who, having been duly sworn,
states that any representations therein contained are true.

     Witness my hand and Notarial Seal this _________ day of 20__.

_______________________________
_______________________________
My commission expires _________________.

                                       H-1

<PAGE>

                                    EXHIBIT I

                                   [RESERVED]

                                       I-1

<PAGE>

                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                     [DATE]

Option One Mortgage Acceptance            Wells Fargo Bank Minnesota, N.A.
Corporation                               11000 Broken Land Parkway
3 Ada                                     Columbia, MD 21044
Irvine, California  92618
Radian Insurance Inc.
1601 Market Street
Philadelphia, PA 19103

                   Re:  Option One Mortgage Loan Trust 2001-2,
                        Asset-Backed Certificates Series 2001-2
                        ---------------------------------------

Ladies and Gentlemen:

          In connection with our acquisition of the above-captioned
Certificates, we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has

                                       J-1

<PAGE>

executed and delivered to you a certificate to substantially the same effect as
this certificate, and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Pooling and Servicing
Agreement.

                                          Very truly yours,

                                          [NAME OF TRANSFEREE]

                                          By:_______________________________
                                                     Authorized Officer

                                       J-2

<PAGE>

                       FORM OF RULE 144A INVESTMENT LETTER

                                     [DATE]

Option One Mortgage Acceptance            Wells Fargo Bank Minnesota, N.A.
Corporation                               11000 Broken Land Parkway
3 Ada                                     Columbia, MD 21044
Irvine, California  92618
Radian Insurance Inc.
1601 Market Street
Philadelphia, PA 19103

                           Re:  Option One Mortgage Loan Trust 2001-2,
                                Asset-Backed Certificates Series 2001-2
                                ---------------------------------------

Ladies and Gentlemen:

     In connection with our acquisition of the above Certificates we certify
that:

     (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws;

     (b) we have had the opportunity to ask questions of and receive answers
from the Depositor concerning the purchase of the Certificates and all matters
relating thereto or any additional information deemed necessary to our decision
to purchase the Certificates;

     (c) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such plan;

     (d) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates;

     (e) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule

                                       J-3

<PAGE>

144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates 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 Securities Act; and

     (f) either (i) we are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended ("Plan"), or any other person (including an investment manager,
a named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan within
the meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3- 101 or (ii) we have provided the Trustee, the Depositor and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to such parties to the effect that the purchase of
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.

                                          Very truly yours,

                                          [NAME OF TRANSFEREE]

                                          By:_______________________________
                                                     Authorized Officer

                                       J-4

<PAGE>

                                                            ANNEX 1 TO EXHIBIT J
                                                            --------------------

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

          [For Transferees Other Than Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

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

          2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_________/1 in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.

          ________ CORPORATION, ETC. The Buyer is a corporation (other than a
          bank, savings and loan association or similar institution),
          Massachusetts or similar business trust, partnership, or charitable
          organization described in Section 501(c)(3) of the Internal Revenue
          Code of 1986, as amended.

          ________ BANK. The Buyer (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

          ________ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least
          $25,000,000 as demonstrated in its latest annual financial statements,
          a copy of which is attached hereto.

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

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

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

                                       J-5

<PAGE>

          ________ INSURANCE COMPANY. The Buyer is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

          ________ STATE OR LOCAL PLAN. The Buyer is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

          ________ ERISA PLAN. The Buyer is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

          ________ INVESTMENT ADVISOR. The Buyer is an investment advisor
          registered under the Investment Advisors Act of 1940.

          ________ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small business
          investment company licensed by the U.S. Small Business Administration
          under Section 301(c) or (d) of the Small Business Investment Act of
          1958.

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

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer 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 Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

          5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will

                                       J-6

<PAGE>

continue to rely on the statements made herein because one or more sales to the
Buyer may be in reliance on Rule 144A.

          6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                          __________________________________
                                                Print Name of Buyer

                                          By:_______________________________
                                          Name:
                                          Title:

                                          Date:_____________________________

                                       J-7

<PAGE>

                                                            ANNEX 2 TO EXHIBIT J
                                                            --------------------

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

           [For Transferees That are Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

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

          2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

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

          ________ The Buyer is part of a Family of Investment Companies which
          owned in the aggregate $___________ in securities (other than the
          excluded securities referred to below) as of the end of the Buyer's
          most recent fiscal year (such amount being calculated in accordance
          with Rule 144A).

          3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) 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,

                                       J-8

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

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

          6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.

                                          ________________________________
                                          Print Name of Buyer or Adviser

                                          By:_____________________________
                                          Name:
                                          Tide:

                                          IF AN ADVISER:

                                          ________________________________
                                                 Print Name of Buyer

                                          Date:___________________________

                                       J-9

<PAGE>

                                    EXHIBIT K

                     AFFIDAVIT OF TRANSFER OF R CERTIFICATES
                           PURSUANT TO SECTION 5.02(d)

                     OPTION ONE MORTGAGE LOAN TRUST 2001-2,
                    ASSET-BACKED CERTIFICATES, SERIES 2001-2

STATE OF      )
              ) ss.:
COUNTY OF     )

     The undersigned, being first duly sworn, deposes and says as follows:

     1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Option One Mortgage Acceptance Corporation,
as Depositor, Option One Mortgage Corporation, as Master Servicer (the "Master
Servicer") and Wells Fargo Bank Minnesota, N.A., as Trustee (the "Trustee").
Capitalized terms used, but not defined herein shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.

     2. The Transferee is, as of the date hereof and will be, as of the date of
the Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. The Transferee has
no knowledge that any such affidavit is false.

     3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) to
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.

     4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass- through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership,

                                       K-1

<PAGE>

trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)

     5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

     6. The Transferee agrees to require a Transfer Affidavit from any Person to
whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

     7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.

     8. The Transferee's taxpayer identification number is _____________.

     9. The Transferee is a United States Person as defined in the Agreement.

     10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.

     11. The Transferee is not an employee benefit plan that is subject to ERISA
or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.

                                       K-2

<PAGE>

     IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of __________, ___.

                                          [NAME OF TRANSFEREE]

                                          By:________________________________
                                          Name:
                                          Title:

[Corporate Seal]

ATTEST:
___________________________
[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 the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.

     Subscribed and sworn before me this __ day of _______, ___.

                                          ____________________________________
                                                       NOTARY PUBLIC

                                          My Commission expires the ____ day
                                          of ____, ___.

                                       K-3

<PAGE>

                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]

Option One Mortgage Acceptance                Radian Insurance Inc.
Corporation                                   1601 Market Street
3 Ada                                         Philadelphia, PA 19103
Irvine, California  92618

                   Re:    Option One Mortgage Loan Trust 2001-2,
                          Asset-Backed Certificates Series 2001-2
                          ---------------------------------------

Ladies and Gentlemen:

     In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                          Very truly yours,

                                          TRANSFEROR

                                          By:________________________________
                                          Name:
                                          Title:

                                       L-1

<PAGE>

                                   EXHIBIT M
                           Form of Liquidation Report

Customer Name:
Account Number:
Original Principal Balance:
1.       Type of Liquidation (REO disposition/charge-off/short pay-off)
         Date last paid
         Date of foreclosure
         Date of REO
         Date of REO Disposition
         Property Sale Price/Estimated Market Value at disposition
2.       Liquidation Proceeds
         Principal Prepayment                    $_____________
         Property Sale Proceeds                   _____________
         Insurance Proceeds                       _____________
         Other (itemize)                          _____________
         Total Proceeds                          $_____________
3.       Liquidation Expenses
         Servicing Advances                      $_____________
         Delinquency Advances                     _____________
         Monthly Advances                         _____________
         Servicing Fees                           _____________
         Other Servicing Compensation             _____________

         Total Advances                          $_____________
4.       Net Liquidation Proceeds                $_____________
         (Item 2 minus Item 3)
5.       Principal Balance of Mortgage Loan      $_____________
6.       Loss, if any (Item 5 minus Item 4)      $_____________

                                       M-1

<PAGE>

                                    EXHIBIT N
                                    ---------

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

     Pursuant to this Subsequent Transfer Instrument, dated___________, 2001
(the "Instrument"), between Option One Mortgage Acceptance Corporation as seller
(the "Depositor"), and Wells Fargo Bank Minnesota, N.A. as trustee of the Option
One Mortgage Loan Trust 2001-2 Asset-Backed Certificates, Series 2001-2, as
purchaser (the "Trustee"), and pursuant to the Pooling and Servicing Agreement,
dated as of April 1, 2001 (the "Pooling and Servicing Agreement"), among the
Depositor as depositor, Option One Mortgage Corporation as master servicer and
the Trustee as trustee, the Depositor and the Trustee agree to the sale by the
Depositor and the purchase by the Trustee in trust, on behalf of the Trust, of
the Mortgage Loans listed on the attached Schedule of Mortgage Loans (the
"Subsequent Mortgage Loans").

          Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.

          Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

          (a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee in trust, on behalf of the Trust, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

          (b) 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, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as seller, to the extent of the Subsequent
Mortgage Loans.

          (c) Additional terms of the sale are set forth on Attachment A hereto.

          Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.

          (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.08 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                                       N-1

<PAGE>

          (b) All terms and conditions of the Pooling and Servicing Agreement
are hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.

          Section 3. RECORDATION OF INSTRUMENT.

          To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of 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 Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

          Section 4. GOVERNING LAW.

          This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

          Section 5. COUNTERPARTS.

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

                                       N-2

<PAGE>

          Section 6. SUCCESSORS AND ASSIGNS.

          This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.

                                   OPTION ONE MORTGAGE ACCEPTANCE
                                   CORPORATION

                                   By: _________________________________
                                   Name:
                                   Title:

                                   WELLS FARGO BANK MINNESOTA, N.A., as
                                   Trustee for Option One Mortgage Loan Trust
                                   2001-2, Asset-Backed Certificates,
                                   Series 2001-2

                                   By:__________________________________
                                   Name:
                                   Title:

ATTACHMENTS

A.   Additional terms of sale.
B.   Schedule of Subsequent Mortgage Loans.
C.   Schedule of Prepayment Charges

                                       N-3

<PAGE>

                                  ATTACHMENT A
                                  ------------

                            ADDITIONAL TERMS OF SALE

     A. General

        1.  Subsequent Cut-off Date: __________, 2001
        2.  Subsequent Transfer Date: _________, 2001
        3.  Aggregate Principal Balance of the Subsequent Mortgage Loans as of
            the Subsequent Cut-off Date:  $_______________
        4.  Purchase Price:  100.00%

     B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (vi) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than [__]% or greater than [__]%; (vii) such Subsequent
Mortgage Loan shall have been serviced by the Master Servicer since origination
or the date of purchase; (viii) such Subsequent Mortgage Loan must have a first
payment date occurring on or before [__], 2001; (ix) if the Subsequent Mortgage
Loan is an Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have
a Gross Margin not less than [__]%; (x) if the Subsequent Mortgage Loan is an
Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Maximum
Mortgage Rate not less than [__]%; (xi) if the Subsequent Mortgage Loan is an
Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Minimum
Mortgage Rate not less than [__]% and (xii) such Subsequent Mortgage Loan shall
have been underwritten in accordance with the criteria set forth under "Option
One Mortgage Corporation--Underwriting Standards" in the Prospectus Supplement.

     C. Following the purchase of any Subsequent Mortgage Loan by the Trust, the
Mortgage Loans (including such Subsequent Mortgage Loans) will as of the
Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than [__]% and not more than [__]%; (iii) have a weighted average
Loan-to-Value Ratio of not more than [__]%; (iv) have no Mortgage Loan with a
principal balance in excess of $[__]; (v) will consist of Mortgage Loans covered
by the PMI Policy representing no less than [__]% of the aggregate Principal
Balance thereof; (v) will consist of Mortgage Loans with Prepayment Charges
representing no less than approximately [__]% of the aggregate Principal Balance
thereof and (vi) have no more than [__]% of Fixed Rate Mortgage Loans by
aggregate principal balance of the Mortgage Loans as of the Subsequent Cut-off
Date. In addition, the Adjustable Rate Mortgage Loans will as of the Subsequent
Cut-off Date have a weighted average Gross Margin not less than [__]% by
aggregate principal balance of the Adjustable Rate Mortgage Loans as of the
Subsequent Cut-off Date.

                                       N-4

<PAGE>

     D. Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by (i) the NIMs Insurer or (ii) either Rating Agency if the inclusion
of such Subsequent Mortgage Loan would adversely affect the ratings on any class
of Offered Certificates.

                                       N-5

<PAGE>

                                    EXHIBIT O
                                    ---------

                             FORM OF ADDITION NOTICE

                                            [Date]

Wells Fargo Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, MD 21044

          Re:  Pooling and Servicing Agreement, dated as of April 1, 2001, among
               Option One Mortgage Acceptance Corporation, Option One Mortgage
               Corporation and Wells Fargo Bank Minnesota, National Association,
               relating to Option One Mortgage Loan Trust 2001-2, Asset-Backed
               Certificates, Series 2001-2
               -----------------------------------------------------------------

Ladies and Gentlemen:

          Pursuant to Section 2.08 of the referenced Pooling and Servicing
Agreement, Option One Mortgage Acceptance Corporation has designated Subsequent
Mortgage Loans to be sold to the Trust on ___________, 2001, with an aggregate
principal balance of $____________. Capitalized terms not otherwise defined
herein have the meaning set forth in the Pooling and Servicing Agreement.

          Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.

                                         Very truly yours,

                                         OPTION ONE MORTGAGE ACCEPTANCE
                                         CORPORATION

                                         By:__________________________
                                         Name:
                                         Title:

Acknowledged and Agreed:

WELLS FARGO BANK MINNESOTA, N.A.

By:__________________________
Name:
Title:

                                       O-1

<PAGE>

                                   SCHEDULE I

                           PREPAYMENT CHARGE SCHEDULE

                                       O-2

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