Document:

CONSULTING AGREEMENT

This  CONSULTING  AGREEMENT  is  made  and entered on this 1st day of September,
2000,  by and between Net2Wireless (Israel) Ltd registration Number 51-286965-2,
with  its  principal  office  at 11 Ha'amal Street Afek Park, Rosh Ha'ayin 49032
Israel  (the  "Company") and Rubner Technology Ventures Ltd. Registration Number
51-290532-4  (the  "Consultant").

     WHEREAS,  the  Company  is  a company duly registered under the laws of the
state of Israel, and  is engaged in the development, production and marketing of
certain  products,  systems  and  services in the area of wireless computing and
telephony;  and,  through  its  shareholders, the company possesses know how and
experience  in  the  areas  of  value added services for wireless communication.

     WHEREAS,  the  Company desires to retain the services of the Consultant and
the  Consultant  desires  to  provide  such  services;

     In  consideration  of  the  covenants,  promises  and  conditions  herein
contained,  and  for  other consider-ation as hereinafter described, the parties
hereto  agree  as  follows:

     1.     Retention  as a Consultant.  The Company hereby agrees to engage the
Consultant  and  the Consultant hereby agrees to provide services to the Company
as  a  consultant  in accordance with the terms and conditions set forth herein.

          2.     Term  The  term  of  this  Agreement  shall  be  deemed to have
commenced  on  1st  February 2000  and shall remain in force for a period of one
year,  until  31 January 2001.  (the "the First year "). At the end of the first
year  ,  this  agreement  shall  be  automatically extended, and shall remain in
force,  until  either  party  gives  the  other  party,  written notice of their
intention  to  terminate  this  agreement  (the  "Notice"). This agreement shall
terminate 90 days from the date of said Notice , provided, however, that neither
party  shall  be  entitled  to  give said Notice, to the other party, during the
first  year.

     3.     Duties.  During  the  term  of  this agreement, the Consultant shall
serve  as a consultant to the Company in the areas of business developmentWhile
the execution of Consultant's services under this agreement, are not expected to
be  provided  on  a  full-time  basis, the Consultant shall devote such time and
energies  to  the  performance  of  its  services  hereunder  as  are reasonably
necessary  to  fulfill  its  obligations  hereunder,  based  on  the  consultant
discretion.  In  performing  its  services  and duties under this agreement, the
Consultant shall at all times comply with the policies of, and be subject to the
direction  of  the  Company  and  applicable  law.  The company acknowledges and
consents to the fact, that  Consultant and/or Consultant's shareholders, renders
at  present  and/or  in  future,  directly  or  indirectly,  Consulting  and/or
Directorship  services  to  other  third  parties  and/or companies and/or legal
entities,  in  Israel  and/or  abroad.  Company  acknowledges and consents, that
nothing  in  this  agreement  shall  be construed as preventing and/or hindering
Consultant  and/or  consultant's  shareholders,  in any way, from rendering said
services  to  third  parties.

<PAGE>

     4.     Consideration.  As compensation for the services rendered under this
agreement, the Company shall pay the Consultant an annual payment in New Israeli
Shekels  (NIS) equivalent to  US $100,000 (One Hundred Thousand US Dollars) plus
value  added  tax (VAT) ("The Consideration). The consideration shall be paid in
twelve  (12) equal consecutive monthly payments. The first payment to be made on
the first day of the second month of this agreement. Each payment shall be made,
on  the  first day of the month following each month in which this agreement has
remained valid, against an Invoice for said amount. The consideration shall bear
VAT  according  to prevailing law. The company shall be entitled to withhold any
amount  required  to  be  deducted, in terms of law, for income tax and/or other
taxation unless Consultant shall present a relevant exempt from tax authorities.

     5.     Independent Contractor.  The Consultant's engagement hereunder shall
be  as  an  independent  contractor  for all intents and purposes, and not as an
employee  of  the Company. Consultant and/or consultant's shareholders shall not
be  entitled  to  any  fringe,  pension,  welfare or other benefits available to
employees  of  the  Company  whether  or  not  a  determination is made that the
Consultant  is  an  employee  and  not an independent contractor with respect to
Consultants  services under this Agreement.  The Consultant acknowledges that it
will  be  solely  responsible  for  any  income tax and self-employment or other
taxes, regardless of tax jurisdiction, arising with respect to the consideration
hereunder.  The  Consultant  acknowledges  and  agrees  that  it  shall  be  its
obligation  to report to the appropriate tax authority as self-employment income
all  compensation  it  receives pursuant to this Agreement.  The Consultant also
acknowledges  that  it  has  no  state law workers' compensation or unemployment
insurance  rights  with  respect  to  its  services  under  this  Agreement. The
Consultant is an independent contractor and has no authority to legally bind the
Company,  and  shall  not  hold  itself  out  as  having  such  authority

     6.     Covenants of the Consultant.  The Consultant represents and warrants
the  following:

     (i)     that  Consultant it is not under any contractual, other restriction
or obligation which conflicts with, or is otherwise inconsistent with its duties
hereunder or the Company's rights hereunder, provided, however, that  nothing in
this  agreement  shall  prevent  Consultant  from rendering Consulting services,
whether  directly or indirectly, to other companies and/or legal entities and/or
third  parties.

     (ii)     that  it  agrees  that all Confidential Information (as defined in
Section  7)  that is received by it or by its representatives or on behalf of it
in connection with this Agreement, is the sole property of the Company and shall
be  used  by  the Consultant only in accordance with the terms and provisions of
this  Agreement,  and that all services, documentation and intellectual property
created  by  or  for  the  Consultant with regard thereto shall be the exclusive
property of and shall vest solely in the Company; with respect to the foregoing,
all Confidential Information (as defined in Section 7) received by or created by
the  Consultant  shall  be  disclosed to the Company immediately upon request or
upon  a  Termination  Date  or  Expiration  Date  under  this  Agreement.
The  Company  hereby  confirms  that it shall not be considered a breach of this
agreement  to the extent that such Confidential Information has otherwise become
publicly  available  (other  than  by  reason  of  Consultant's  breach  of this
agreement  or  under  any  other  obligations  owed by it to the Company)' where
Consultant  receives  information  through a third party who Consultant does not
reasonably  know  to have breached a confidentiality obligation to the Company ,
where  required  by  law,  or  where  permitted  by  agreement  to  the parties;

7.     Disclosure  of  Information.  The Consultant acknowledges that during the
course  of  its involvement in the Company's activities or otherwise, it and its
representatives  will  obtain  or  have  access  to  confidential  information
concerning  the Company's businesses, strategies, operations, financial affairs,
organizational  and personnel matters, policies, procedures and other non-public
matters,  or  concerning those of third parties, including Intellectual Property
(as  defined  below).  Such  information  ("Confidential  Information")  may  be
provided in written or electronic form or orally.  In consideration of, and as a
condition  to,  access  to Confidential Information, and without prejudice to or
limitation  of  any other confidentiality obligations imposed by agreement or by
law,  the  Consultant  hereby  undertakes  to  use  and  protect  Confidential
Information in accordance with any restrictions placed on its use or disclosure.
Without limiting the foregoing, except as authorized by the Company, as required
by  law  or  to  the  extent that such information has otherwise become publicly
available (other than by reason of its default under this Agreement or under any
other  obligation owed by it to the Company), the Consultant may not disclose or
allow  disclosure of any Confidential Information, or of any information derived
therefrom,  in  whatever  form  without  the  prior consent of the Company.  The
foregoing  obligations  will  survive, and remain binding and enforceable during
the  Consulting  Period  and  for a period of two (2) years after the Expiration
Date  or  the  Termination  Date  (as each is defined below) notwithstanding any
termination  of  the Consultant's service with the Company and any settlement of
the  financial rights and obligations arising from its service with the Company.
Upon  the  earlier  of  the  Expiration  Date  or  a  termination  date  of this
Consultation  Agreement the Consultant agrees to return any and all Confidential
Information  received  during  the  Consulting  Period.

     "Intellectual  Property"  includes,  but  is  not limited to, client lists,
customer  lists,  strategies  and  methods,  techniques,  computer  technology,
technological  research,  software programs, vendors, lists, corporate financial
information,  customer  and  trader accounts' financial information and business
affiliate  lists.

     8.     Termination.  This  agreement may not be terminated during the first
year,  as  defined above. After the end of the first year, each party shall have
the  right  to  terminate  this Agreement at any time and for any reason upon 90
(ninety)  days  months prior Notice (as defined above) given to the other party.
Termination  under  this  Section  shall  not  relieve  the  parties  of  their
obligations  under  Sections  4,  6(ii) and 7 of this Agreement which shall each
survive  termination  of  this  Agreement.

     9.     Miscellaneous.  This  Agreement  sets  forth  the parties' final and
entire  agreement, and supersedes any and all prior understandings, with respect
to  its  subject  matter.  The headings in this Agreement are for convenience of
reference  only  and  shall not affect the interpretation of this Agreement.  No
failure  or  delay  by  either  party  in exercising any right, option, power or
privilege  hereunder  shall operate as a waiver thereof, nor shall any single or
partial  exercise thereof preclude any other or further exercise thereof, or the
exercise  of any other right, option, power or privilege.  This Agreement can be
changed,  waived  or  terminated only by a writing signed by both the Consultant
and  the  Company.

<PAGE>

     10.     Assignment.  This Agreement may not be assigned in whole or in part
by  the  Consultant  . This agreement shall be assigned by the Company to any of
its  subsidiaries  or  affiliates  and  may  be reassigned by such subsidiary or
affiliate  to  the  Company;  provided  that  each  such assignee shall agree in
writing to assume all obligations of the Company hereunder, and provided further
that  no  assignment  shall  be  made without the prior consent of both parties.

     11.     Notices.  Any  notice  or  other written communication (a "Notice")
may  be  given by facsimile, first class mail, postage pre-paid or by courier to
the  mailing  address  or  facsimile  numbers  set forth above, or to such other
addresses  or  facsimile  numbers  as  either  party  may  designate  by notice,
similarly  given  to  the  other  party.  Notices  shall  be deemed to have been
sufficiently  made  or  given:  (i) fourteen (14) days after being dispatched by
mail,  postage  pre-paid,  (ii)  seven (7) days after delivery to an air courier
company or (iii) within five (5) days of the receipt of a facsimile transmission
confirmation  sheet.

     12.     Governing  Law.  This  Agreement  shall be exclusively governed by,
construed  under  and  in accordance with, the laws of the State of  Israel .The
competent  Courts  of the state of Israel shall have exclusive jurisdiction over
all  matters  relating  and/or  deriving from this agreement, including, without
limitation,  this agreements' validity, enforcement , breach and/or termination.
Any  action  or  proceeding  arising  directly,  indirectly  or  otherwise,  in
connection  with,  out  of  or  from  this  Agreement,  any breach hereof or any
transaction  covered  hereby  shall  be exclusively brought before the competent
courts  of  the  state  of  Israel.

<PAGE>

     IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first  above  written.

     NET2WIRELESS  CORPORATION

     By:  /s/
     Name:
     Title:

     RUBENR  TECHNOLOGY  VENTURES  LTD

     By:  /s/
     Name:
     Title:Exhibit 4.1

<PAGE>

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
                                    Depositor

                            UNION PLANTERS PMAC, Inc.
                                 Master Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                           Dated as of August 1, 2000

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

                       Mortgage Pass-Through Certificates

                                 Series 2000-UP1

<PAGE>

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

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

                                                     ARTICLE I

                                                    DEFINITIONS
<S>                                                                                                            <C>
         1.01.     Defined Terms..................................................................................2
                   Advancing Person...............................................................................2
                   Affiliate......................................................................................2
                   Agreement......................................................................................2
                   Assignment.....................................................................................2
                   Available Distribution Amount..................................................................2
                   Bankruptcy Amount..............................................................................3
                   Bankruptcy Code................................................................................3
                   Bankruptcy Loss................................................................................3
                   Book-Entry Certificate.........................................................................3
                   Book-Entry Custodian...........................................................................3
                   Business Day...................................................................................3
                   Cash-out Refinancing...........................................................................3
                   Certificate....................................................................................3
                   Certificate Factor.............................................................................3
                   Certificateholder or Holder....................................................................4
                   Certificate Owner..............................................................................4
                   Certificate Principal Balance..................................................................4
                   Certificate Register"..........................................................................4
                   Class   .......................................................................................4
                   Class A Certificate............................................................................5
                   Class A-1 Certificate..........................................................................5
                   Class A-2 Certificate..........................................................................5
                   Class B Percentage.............................................................................5
                   Class B-1 Certificate..........................................................................5
                   Class B-1 Percentage...........................................................................5
                   Class B-2 Certificate..........................................................................5
                   Class B-2 Percentage...........................................................................5
                   Class B-3 Certificate..........................................................................5
                   Class B-3 Percentage...........................................................................6
                   Class B-4 Certificate..........................................................................6
                   Class B-4 Percentage...........................................................................6
                   Class B-5 Certificate..........................................................................6
                   Class B-5 Percentage...........................................................................6
                   Class B-6 Certificate..........................................................................6
                   Class B-6 Percentage...........................................................................6
                   Class IO Certificate...........................................................................7
                   Class IO Mortgage Loan.........................................................................7

                                        i

<PAGE>

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

                   Class PO Certificate...........................................................................7
                   Class PO Mortgage Loan.........................................................................7
                   Class PO Percentage............................................................................7
                   Class PO Principal Distribution Amount.........................................................7
                   Class R Certificate............................................................................8
                   Closing Date...................................................................................8
                   Code    .......................................................................................8
                   Collection Account.............................................................................9
                   Commission.....................................................................................9
                   Corporate Trust Office.........................................................................9
                   Cut-off Date...................................................................................9
                   Debt Service Reduction.........................................................................9
                   Deficient Valuation............................................................................9
                   Definitive Certificates........................................................................9
                   Deleted Mortgage Loan..........................................................................9
                   Depositor......................................................................................9
                   Depository.....................................................................................9
                   Depository Institution........................................................................10
                   Depository Participant........................................................................10
                   Determination Date............................................................................10
                   Directly Operate..............................................................................10
                   Disqualified Organization.....................................................................10
                   Distribution Account..........................................................................10
                   Distribution Date.............................................................................11
                   DOL     ......................................................................................11
                   DOL Regulations...............................................................................11
                   Due Date......................................................................................11
                   Due Period....................................................................................11
                   Eligible Account..............................................................................11
                   ERISA   ......................................................................................11
                   Estate in Real Property.......................................................................11
                   Excess Bankruptcy Loss........................................................................11
                   Excess Fraud Loss.............................................................................11
                   Excess Loss...................................................................................11
                   Excess Special Hazard Loss....................................................................12
                   Extraordinary Loss............................................................................12
                   Extraordinary Trust Fund Expenses.............................................................12
                   Fannie Mae....................................................................................12
                   FDIC    ......................................................................................12
                   Final Recovery Determination..................................................................12
                   Fitch   ......................................................................................13
                   Fraud Loss....................................................................................13
                   Fraud Loss Amount.............................................................................13
                   Freddie Mac...................................................................................13

                                       ii

<PAGE>

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

                   Independent...................................................................................13
                   Independent Contractor........................................................................13
                   Insurance Proceeds............................................................................14
                   Interest Accrual Period.......................................................................14
                   Interest Distribution Amount..................................................................14
                   Late Collections..............................................................................14
                   Liquidation Event.............................................................................14
                   Liquidation Proceeds..........................................................................15
                   Loan-to-Value Ratio...........................................................................15
                   Master Servicer...............................................................................15
                   Master Servicer Event of Default..............................................................15
                   Master Servicer Remittance Date...............................................................15
                   Monthly Payment...............................................................................15
                   Mortgage......................................................................................15
                   Mortgage File.................................................................................15
                   Mortgage Loan.................................................................................15
                   Mortgage Loan Purchase Agreement..............................................................16
                   Mortgage Loan Remittance Rate.................................................................16
                   Mortgage Loan Schedule........................................................................16
                   Mortgage Note.................................................................................17
                   Mortgage Pool.................................................................................17
                   Mortgage Rate.................................................................................17
                   Mortgaged Property............................................................................17
                   Mortgagor.....................................................................................17
                   Net Mortgage Rate.............................................................................17
                   New Lease.....................................................................................17
                   Non-Class PO Percentage.......................................................................18
                   Nonrecoverable P&I Advance....................................................................18
                   Non-United States Person......................................................................18
                   Notional Amount...............................................................................18
                   Officers' Certificate.........................................................................18
                   Opinion of Counsel............................................................................18
                   Original Mortgage Loan........................................................................18
                   Ownership Interest............................................................................18
                   Pass-Through Rate.............................................................................18
                   Percentage Interest...........................................................................18
                   Permitted Investments.........................................................................19
                   Permitted Transferee..........................................................................20
                   Person  ......................................................................................20
                   P&I Advance...................................................................................20
                   Plan    ......................................................................................20
                   Prepayment Assumption.........................................................................20
                   Prepayment Interest Shortfall.................................................................20
                   Prepayment Period.............................................................................20

                                       iii

<PAGE>

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

                   Primary Mortgage Insurance Policy.............................................................20
                   Prime Rate....................................................................................21
                   Principal Prepayment..........................................................................21
                   Purchase Price................................................................................21
                   Qualified Insurer.............................................................................21
                   Qualified Substitute Mortgage Loan............................................................21
                   Rate/Term Refinancing.........................................................................22
                   Rating Agency.................................................................................22
                   Realized Loss.................................................................................22
                   Record Date...................................................................................23
                   Refinanced Mortgage Loan......................................................................23
                   Regular Certificate...........................................................................23
                   Regular Interest..............................................................................23
                   Relief Act....................................................................................24
                   Relief Act Interest Shortfall.................................................................24
                   REMIC   ......................................................................................24
                   REMIC Provisions..............................................................................24
                   Remittance Report.............................................................................24
                   Rents from Real Property......................................................................24
                   REO Account...................................................................................24
                   REO Disposition...............................................................................24
                   REO Imputed Interest..........................................................................24
                   REO Principal Amortization....................................................................24
                   REO Property..................................................................................25
                   Request for Release...........................................................................25
                   Residential Dwelling..........................................................................25
                   Residual Certificate..........................................................................25
                   Residual Interest.............................................................................25
                   Responsible Officer...........................................................................25
                   Scheduled Principal Balance...................................................................25
                   Seller  ......................................................................................26
                   Senior Certificate............................................................................26
                   Senior Percentage.............................................................................26
                   Senior Prepayment Percentage..................................................................26
                   Senior Principal Distribution Amount..........................................................27
                   Servicing Account.............................................................................28
                   Servicing Advances............................................................................28
                   Servicing Fee.................................................................................29
                   Servicing Fee Rate............................................................................29
                   Servicing Officer.............................................................................29
                   Single Certificate............................................................................29
                   Special Hazard Amount.........................................................................29
                   Special Hazard Loss...........................................................................29
                   S&P     ......................................................................................30

                                       iv

<PAGE>

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

                   Startup Day...................................................................................30
                   Stated Principal Balance......................................................................30
                   Stayed Funds..................................................................................31
                   Stripped Interest Rate........................................................................31
                   Subordinate Certificate.......................................................................31
                   Subordinate Percentage........................................................................31
                   Subordinate Prepayment Percentage.............................................................31
                   Subordinate Principal Distribution Amount.....................................................31
                   Sub-Servicer..................................................................................32
                   Sub-Servicing Account.........................................................................32
                   Sub-Servicing Agreement.......................................................................32
                   Tax Returns...................................................................................33
                   Termination Price.............................................................................33
                   Transfer......................................................................................33
                   Transferee....................................................................................33
                   Transferor....................................................................................33
                   Trust Fund....................................................................................33
                   Trustee ......................................................................................33
                   Trustee Fee...................................................................................33
                   Uninsured Cause...............................................................................33
                   United States Person..........................................................................34
                   Value   ......................................................................................34
                   Voting Rights.................................................................................34
                   Weighted Average Stripped Interest Rate.......................................................34
         1.02.     Allocation of Certain Interest Shortfalls.....................................................34

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         2.01.     Conveyance of Mortgage Loans..................................................................36
         2.02.     Acceptance of the Trust Fund by the Trustee...................................................39
         2.03.     Repurchase or Substitution of Mortgage Loans by the Seller....................................40
         2.04.     [Reserved]....................................................................................42
         2.05.     Representations, Warranties and Covenants of the Master Servicer..............................42
         2.06.     Issuance of Class R Certificates..............................................................44

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         3.01.     Master Servicer to Act as Master Servicer.....................................................45

                                        v

<PAGE>

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

         3.02.     Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................46
         3.03.     Successor Sub-Servicers.......................................................................47
         3.04.     Liability of the Master Servicer..............................................................48
         3.05.     No Contractual Relationship Between Sub-Servicers and Trustee
                   or Certificateholders.........................................................................48
         3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee..............................48
         3.07.     Collection of Certain Mortgage Loan Payments..................................................49
         3.08.     Sub-Servicing Accounts........................................................................49
         3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................50
         3.10.     Collection Account and Distribution Account...................................................51
         3.11.     Withdrawals from the Collection Account and Distribution Account..............................53
         3.12.     Investment of Funds in the Collection Account and the Distribution
                   Account.......................................................................................55
         3.13.     Maintenance of the Primary Mortgage Insurance Policies; Collections
                   Thereunder....................................................................................56
         3.14.     Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
                   Coverage......................................................................................57
         3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................59
         3.16.     Realization Upon Defaulted Mortgage Loans.....................................................60
         3.17.     Trustee to Cooperate; Release of Mortgage Files...............................................62
         3.18.     Servicing Compensation........................................................................63
         3.19.     Reports to the Trustee; Collection Account Statements.........................................63
         3.20.     Statement as to Compliance....................................................................64
         3.21.     Independent Public Accountants' Servicing Report..............................................64
         3.22.     Access to Certain Documentation...............................................................65
         3.23.     Title, Management and Disposition of REO Property.............................................65
         3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest
                   Shortfalls....................................................................................68
         3.25.     Obligations of the Master Servicer in Respect of Monthly Payments.............................68
         3.26.     Advance Facility..............................................................................69

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

         4.01.     Distributions.................................................................................70
         4.02.     Statements to Certificateholders..............................................................74
         4.03.     Remittance Reports; P&I Advances..............................................................77
         4.04.     Allocation of Extraordinary Trust Fund Expenses and Realized Losses...........................79
         4.05.     Compliance with Withholding Requirements......................................................80
         4.06.     [Reserved]....................................................................................80
         4.07.     Commission Reporting..........................................................................80

                                       vi

<PAGE>

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

                                                     ARTICLE V

                                                 THE CERTIFICATES

         5.01.     The Certificates..............................................................................81
         5.02.     Registration of Transfer and Exchange of Certificates.........................................83
         5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................87
         5.04.     Persons Deemed Owners.........................................................................87
         5.05.     Certain Available Information.................................................................88

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER

         6.01.     Liability of the Depositor and the Master Servicer............................................89
         6.02.     Merger or Consolidation of the Depositor or the Master Servicer...............................89
         6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others......................89
         6.04.     Limitation on Resignation of the Master Servicer..............................................90
         6.05.     Rights of the Depositor in Respect of the Master Servicer.....................................91

                                                    ARTICLE VII

                                                      DEFAULT

         7.01.     Master Servicer Events of Default.............................................................92
         7.02.     Trustee to Act; Appointment of Successor......................................................94
         7.03.     Notification to Certificateholders............................................................96
         7.04.     Waiver of Master Servicer Events of Default...................................................96

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE

         8.01.     Duties of Trustee.............................................................................97
         8.02.     Certain Matters Affecting the Trustee.........................................................98
         8.03.     Trustee not Liable for Certificates or Mortgage Loans.........................................99
         8.04.     Trustee May Own Certificates..................................................................99
         8.05.     Trustee's Fees and Expenses..................................................................100
         8.06.     Eligibility Requirements for Trustee.........................................................100
         8.07.     Resignation and Removal of the Trustee.......................................................101
         8.08.     Successor Trustee............................................................................101
         8.09.     Merger or Consolidation of Trustee...........................................................102
         8.10.     Appointment of Co-Trustee or Separate Trustee................................................102
         8.11.     [intentionally omitted]......................................................................103

                                       vii

<PAGE>

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

         8.12.     Appointment of Office or Agency..............................................................103
         8.13.     Representations and Warranties...............................................................103

                                                    ARTICLE IX

                                                    TERMINATION

         9.01      Termination Upon Repurchase or Liquidation of the Trust Fund.................................105
         9.02      Additional Termination Requirements..........................................................107

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         10.01.    REMIC Administration.........................................................................108
         10.02.    Prohibited Transactions and Activities.......................................................110
         10.03.    Master Servicer and Trustee Indemnification..................................................111

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         11.01.    Amendment....................................................................................112
         11.02.    Recordation of Agreement; Counterparts.......................................................113
         11.03.    Limitation on Rights of Certificateholders...................................................113
         11.04.    Governing Law................................................................................114
         11.05.    Notices......................................................................................114
         11.06.    Severability of Provisions...................................................................115
         11.07.    Notice to Rating Agency......................................................................115
         11.08.    Article and Section References...............................................................116
         11.09.    Grant of Security Interest...................................................................116
</TABLE>

                                      viii

<PAGE>

Exhibits
--------

Exhibit A-1    Form of Class A-1 Certificate
Exhibit A-2    Form of Class A-2 Certificate
Exhibit A-3    Form of Class IO Certificate
Exhibit A-4    Form of Class PO Certificate
Exhibit A-5    Form of Class B-1 Certificate
Exhibit A-6    Form of Class B-2 Certificate
Exhibit A-7    Form of Class B-3 Certificate
Exhibit A-8    Form of Class B-4 Certificate
Exhibit A-9    Form of Class B-5 Certificate
Exhibit A-10   Form of Class B-6 Certificate
Exhibit A-11   Form of Class R Certificate
Exhibit B      [Reserved]
Exhibit C-1    Form of Trustee's Initial Certification
Exhibit C-2    Form of Trustee's Final Certification
Exhibit C-3    Form of Receipt of Mortgage Note
Exhibit D      Form of Mortgage Loan Purchase Agreement
Exhibit E      Request for Release
Exhibit F-1    Form of Transferor Representation Letter and Form of Transferee
               Representation Letter in Connection with Transfer of Class B-4
               Certificates, Class B-5 Certificates, Class B-6 Certificates and
               Residual Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2    Form of Transfer Affidavit and Agreement and Form of Transferor
               Affidavit in Connection with Transfer of Residual Certificates
Exhibit G      Form of Certification with respect to ERISA and the Code
Schedule 1     Mortgage Loan Schedule Schedule 2 Mortgage Loan Schedule with
               respect to Mortgage Loans with Loan-to-Value Ratios in excess of
               80% that have Primary Mortgage Insurance

                                       ix

<PAGE>

                   This Pooling and Servicing Agreement, is dated and effective
as of August 1, 2000, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as
Depositor, UNION PLANTERS PMAC, Inc., as Master Servicer, and WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

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

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

<TABLE>
<CAPTION>
                                                            Initial Aggregate Certificate        Latest Possible
         Designation                Pass-Through Rate             Principal Balance             Maturity Date(1)
         -----------                -----------------             -----------------             ----------------
<S>                                 <C>                     <C>                                 <C>
          Class A-1                  8.00% per annum               $454,217,362.00               July 25, 2030
          Class A-2                  8.00% per annum                $80,305,492.00               July 25, 2030
          Class PO                      0.00%(2)                    $17,828,144.67               July 25, 2030
          Class IO                     Variable(3)                 $579,896,108.93(4)            July 25, 2030
          Class B-1                  8.00% per annum                $14,497,000.00               July 25, 2030
          Class B-2                  8.00% per annum                 $5,219,000.00               July 25, 2030
          Class B-3                  8.00% per annum                 $3,479,000.00               July 25, 2030
          Class B-4                  8.00% per annum                 $1,740,000.00               July 25, 2030
          Class B-5                  8.00% per annum                 $1,160,000.00               July 25, 2030
          Class B-6                  8.00% per annum                 $1,450,110.00               July 25, 2030
</TABLE>

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

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

(2)   The Class PO Certificates are not entitled to distributions of interest.

(3)   Calculated in accordance with the definition of "Pass-Through Rate"
      herein.

(4)   Initial Notional Amount. As provided herein, the Class IO Certificates
      entitle the Holders thereof solely to distributions of interest accrued on
      the related Notional Amount of such Certificates.

<PAGE>

                  As of the Cut-off Date, the Original Group I Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $490,608,051.45. As of the
Cut-off Date, the Original Group II Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $89,288,057.48.

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

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

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

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

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

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

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

                  "Available Distribution Amount": The Group I Available
Distribution Amount and the Group II Available Distribution Amount.

                  "Bankruptcy Amount": As of any date of determination, an
amount equal to the excess, if any, of (A) $166,512 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Subordinate Certificates in
accordance with Section 4.04.

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

                                       -2-

<PAGE>

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

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

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

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

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

                  "Certificate": Any one of the Mortgage Pass-Through
Certificates, Series 2000-UP1, issued under this Agreement.

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

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

                                       -3-

<PAGE>

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

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

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

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

                  "Class A Certificate": Any Class A-1 Certificate or Class A-2
Certificate.

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

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

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

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

                                       -4-

<PAGE>

                  "Class B-1 Certificate": Any one of the Class B-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-5 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                  "Class B-2 Certificate": Any one of the Class B-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                  "Class B-3 Certificate": Any one of the Class B-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-7 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                  "Class B-4 Certificate": Any one of the Class B-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-8 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                                       -5-

<PAGE>

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

                  "Class B-5 Certificate": Any one of the Class B-5 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-9 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                  "Class B-6 Certificate": Any one of the Class B-6 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-10 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions.

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

                  "Class IO Certificate": Any one of the Class IO Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-3 and evidencing a Regular Interest in the Trust
Fund for purposes of the REMIC Provisions. The Class IO Certificates shall not
have a Certificate Principal Balance and shall not be entitled to any
distributions of principal.

                  "Class IO Mortgage Loan": Each Mortgage Loan with a Net
Mortgage Rate equal to or greater than 8.00% per annum.

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

                                       -6-

<PAGE>

Certificates shall have a Pass-Through Rate of 0% per annum and shall not be
entitled to any distributions of interest.

                  "Class PO Mortgage Loan": Each Mortgage Loan with a Net
Mortgage Rate below 8.00% per annum.

                  "Class PO Percentage": With respect to each Class PO Mortgage
Loan, the quotient of (i) 8.00% per annum minus the related Net Mortgage Rate
divided by (ii) 8.00% per annum. With respect to each Class IO Mortgage Loan, 0%
per annum.

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

                  (a) the sum of the following:

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

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

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

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

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

                                       -7-

<PAGE>

                  related Prepayment Period) in respect of each such Deleted
                  Mortgage Loan that was replaced prior to the Distribution Date
                  in the related Prepayment Period, over (B) the related Class
                  PO Percentage of the Stated Principal Balances (calculated as
                  of the respective dates of substitution) of such Qualified
                  Substitute Mortgage Loans;

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

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

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

                  "Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and evidencing the Residual Interest in the Trust
Fund for purposes of the REMIC Provisions.

                  "Closing Date": August 30, 2000.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled, "Union Planters PMAC, Inc., as Master Servicer for Wells Fargo Bank
Minnesota, National Association, as Trustee, in trust for the registered holders
of Union Planters Mortgage Pass-Through Certificates, Series 2000-UP1." The
Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Sixth and Marquette,
Minneapolis, Minnesota 55479, Attention: Corporate Trust, Union Planters, Series
2000- UP1, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor and the Master Servicer.

                                       -8-

<PAGE>

                  "Cross-Collateralization Date": Any Distribution Date on which
an Undercollateralization Amount exists.

                  "Cut-off Date": With respect to each Original Mortgage Loan,
August 1, 2000. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

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

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

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

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

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

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

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

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

                                       -9-

<PAGE>

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

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

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Wells Fargo Bank Minnesota, National Association, as Trustee, in trust
for the registered holders of Union Planters Mortgage Pass-Through Certificates,
Series 2000-UP1." The Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in September 2000.

                  "Diverted Interest Amount": With respect to any Distribution
Date, one month's interest accrued during the related Interest Accrual Period on
the Overcollateralization Amount at 8.00% per annum.

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

                                      -10-

<PAGE>

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

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

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

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

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

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

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

                  "Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.

                  "Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.

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

                  "Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.

                                      -11-

<PAGE>

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

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

           (ii)   hostile or warlike action in time of peace or war, including
                  action in hindering, combating or defending against an actual,
                  impending or expected attack by any government or sovereign
                  power, DE JURE or DE FACTO, or by any authority maintaining or
                  using military, naval or air forces, or by military, naval or
                  air forces, or by an agent of any such government, power,
                  authority or forces;

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

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

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

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

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

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

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

                                      -12-

<PAGE>

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

              "Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (X) prior to the third anniversary of the
Cut-off Date, 1.00% of the aggregate Stated Principal Balance of the Original
Mortgage Loans as of the Cut-off Date (initially $5,798,961) minus the aggregate
amount of Fraud Losses allocated solely to the Subordinate Certificates in
accordance with Section 4.04 since the Cut-off Date up to such date of
determination and (Y) from the third to the fifth anniversary of the Cut-off
Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most recent anniversary of the Cut-off Date and (b) 0.50% of the aggregate
outstanding principal balance of the Mortgage Loans as of the most recent
anniversary of the Cut-off Date minus (2) the Fraud Losses allocated solely to
the Subordinate Certificates in accordance with Section 4.04 since the most
recent anniversary of the Cut-off Date up to such date of determination.
On and after the fifth anniversary of the Cut-off Date the Fraud Loss Amount
shall be zero.

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

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

                                      -13-

<PAGE>

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

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

              "Group I Mortgage Loan": A first lien Mortgage Loan which provides
for a fixed Mortgage Rate payable with respect thereto and has a principal
balance at origination which conforms to Fannie Mae and Freddie Mac guidelines.
The Group I Mortgage Loans are identified as such on the Mortgage Loan Schedule.

              "Group II Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto and has a
principal balance at origination which may or may not conform to Fannie Mae and
Freddie Mac guidelines. The Group II Mortgage Loans are identified as such on
the Mortgage Loan Schedule.

                                      -14-

<PAGE>

              "Group I Subordinate Percentage": With respect to any Distribution
Date and Loan Group I, a percentage equal to 100% minus the Senior Percentage
for the Class A-1 Certificates.

              "Group II Subordinate Percentage": With respect to any
Distribution Date and Loan Group II, a percentage equal to 100% minus the Senior
Percentage for the Class A-2 Certificates.

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

              "Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to the
Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
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 the Trust
Fund does not receive or derive any income from such Person and provided that
the relationship between such Person and the Trust Fund is at arm's length, all
within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Master Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

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

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

              "Interest Distribution Amount": With respect to any Class of
Regular Certificates (other than the Class PO Certificates) for any Distribution
Date, an amount equal to one month's interest accrued during the most recently
ended Interest Accrual Period at the applicable Pass-Through Rate

                                      -15-

<PAGE>

on the Certificate Principal Balance or Notional Amount thereof immediately
prior to such Distribution Date. The Class PO Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
The Interest Distribution Amount for any Class of Regular Certificates (a) will
also include, in the case of any Distribution Date subsequent to the initial
Distribution Date, the excess, if any, of the Interest Distribution Amount in
respect of such Certificates for the immediately preceding Distribution Date,
over the aggregate distributions of interest made in respect of such
Certificates pursuant to Section 4.01(a) on such immediately preceding
Distribution Date, and (b) will be reduced, in the case of any Distribution
Date, by the amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 3.24) and Relief
Act Interest Shortfalls that were allocated to such Certificates on such
Distribution Date pursuant to Section 1.02. The Interest Distribution Amount for
any Class of Certificates will be based on a 360 day year consisting of twelve
30 day Interest Accrual Periods.

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

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

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

              "Loan Group":  Either Loan Group I or Loan Group II.

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

                                      -16-

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                      -17-

<PAGE>

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

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

           (ii)   the Mortgagor's name;

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

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

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

           (vi)   the original months to maturity;

          (vii)   the original date of the mortgage;

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

           (ix)   the Mortgage Rate;

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

           (xi)   the stated maturity date;

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

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

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

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

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

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

         (xviii)  the Value of the Mortgaged Property;

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

                                      -18-

<PAGE>

           (xx)   the Class PO Percentage; and

          (xxi)   the Loan Group.

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

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

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

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, without regard to
any reduction thereof as a result of a Debt Service Reduction or operation of
the Relief Act.

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

                  "Mortgagor":  The obligor on a Mortgage Note.

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

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

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

                  "Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment

                                      -19-

<PAGE>

of the Master Servicer, will not or, in the case of a proposed P&I Advance,
would not be ultimately recoverable from related late payments, Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.

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

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

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

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

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

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

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

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

                                      -20-

<PAGE>

                  "Overcollateralized Loan Group": As to any Distribution Date,
either Loan Group for which an Overcollateralization Amount greater than zero is
calculated.

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

                  "Pass-Through Rate": With respect to any Class of Regular
Certificates (other than the Class IO Certificates and the Class PO
Certificates) for any Distribution Date, 8.00% per annum. With respect to the
Class IO Certificates, for any Distribution Date, the Weighted Average Stripped
Interest Rate for such Distribution Date. The Class PO Certificates shall have a
Pass-Through Rate of 0% per annum and shall not be entitled to any distributions
of interest.

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

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

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

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

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

                                      -21-

<PAGE>

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

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

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

                           (vii) if previously confirmed in writing to the
         Trustee, any other demand, money market or time deposit, or any other
         obligation, security or investment, as may be acceptable to each Rating
         Agency as a permitted investment of funds backing securities having
         ratings equivalent to its highest initial rating of the Senior
         Certificates;

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

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

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

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

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

                  "Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 15% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents

                                      -22-

<PAGE>

an annualized constant assumed rate of prepayment each month of a pool of
mortgage loans relative to its outstanding principal balance for the life of
such pool.

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

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

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

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

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

                                      -23-

<PAGE>

allocable to such Mortgage Loan or REO Property; (iv) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan or REO
Property pursuant to Sections 3.11(a)(ix) and Section 3.16(b); and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation.

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

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

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

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

                                      -24-

<PAGE>

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

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

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

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

                                      -25-

<PAGE>

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

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

                  "Regular Certificate": Any Senior Certificate or Subordinate
Certificate.

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

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

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

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

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

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

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

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

                  "REO Disposition": The sale or other disposition of an REO
Property on behalf of 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 Mortgage Loan Remittance Rate on
the Stated Principal Balance of such REO Property (or, in the case of the first
such calendar month, of the related Mortgage Loan if appropriate) as of the
close of business on the Distribution Date in such calendar month.

                                      -26-

<PAGE>

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

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

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

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

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

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

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

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether

                                      -27-

<PAGE>

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

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

                  "Senior Certificate": Any Class A Certificate, Class PO
Certificate or Class IO Certificate.

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

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

                                      -28-

<PAGE>

                  Notwithstanding the foregoing, on any Cross-Collateralization
Date, the Senior Percentage for the Class A Certificates related to the
Overcollateralized Loan Group will equal the lesser of (a) 100% and (b) a
fraction, expressed as a percentage, the numerator of which is the sum of (i)
the excess, if any, of the aggregate Certificate Principal Balance of the
related Class A Certifi cates for such Distribution Date over the aggregate
amount, if any, payable to the Holders of the related Class A Certificates on
such date pursuant to clause (d) of the definition of "Senior Principal
Distribution Amount" plus (ii) the Overcollateralization Amount and the
denominator of which is the sum of (i) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the Mortgage Loans in
the related Loan Group, plus (ii) the aggregate of the Non-Class PO Percentage
of the Scheduled Principal Balance of each of the REO Properties in the related
Loan Group, in each case before reduction for any Realized Losses on such
Distribution Date. On any Distribution Date after the reduction of the
Certificate Principal Balance of either the Class A-1 Certificates or the Class
A-2 Certificates to zero, the Senior Percentage for the remaining Class of Class
A Certificates will be the lesser of (a) 100% and (b) a fraction, expressed as a
percentage, the numerator of which is the excess, if any, of the aggregate
Certificate Principal Balance of the remaining Class A Certificates for such
Distribution Date over the aggregate amount, if any, payable to the Holders of
the remaining Class A Certificates on such date pursuant to clause (d) of the
definition of "Senior Principal Distribution Amount," and the denominator of
which is the sum of (i) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the Mortgage Loans in both Loan Groups,
plus (ii) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the REO Properties in both Loan Groups, in each
case before reduction for any Realized Losses on such Distribution Date.

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

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
September 2000 through August 2005                      100%

September 2005 through August 2006                      Senior Percentage for the Class A-1 Certificates, plus
                                                        70% of the Group I Subordinate Percentage

September 2006 through August 2007                      Senior Percentage for the Class A-1 Certificates, plus
                                                        60% of the Group I Subordinate Percentage

September 2007 through August 2008                      Senior Percentage for the Class A-1 Certificates, plus
                                                        40% of the Group I Subordinate Percentage

September 2008 through August 2009                      Senior Percentage for the Class A-1 Certificates, plus
                                                        20% of the Group I Subordinate Percentage

September 2009 and thereafter                           Senior Percentage for the Class A-1 Certificates;
</TABLE>

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

                                      -29-

<PAGE>

<TABLE>
<CAPTION>
                Distribution Date                                        Senior Prepayment Percentage
-------------------------------------------------       --------------------------------------------------------------
<S>                                                     <C>
September 2000 through August 2005                      100%

September 2005 through August 2006                      Senior Percentage for the Class A-2 Certificates, plus
                                                        70% of the Group II Subordinate Percentage

September 2006 through August 2007                      Senior Percentage for the Class A-2 Certificates, plus
                                                        60% of the Group II Subordinate Percentage

September 2007 through August 2008                      Senior Percentage for the Class A-2 Certificates, plus
                                                        40% of the Group II Subordinate Percentage

September 2008 through August 2009                      Senior Percentage for the Class A-2 Certificates, plus
                                                        20% of the Group II Subordinate Percentage

September 2009 and thereafter                           Senior Percentage for the Class A-2 Certificates;
</TABLE>

provided, however, no reduction to the related Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Mortgage Loans in both Loan Groups
delinquent 60 days or more (including REO Properties and Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Subordinate Certificates
and (ii) Realized Losses on the Mortgage Loans to date are less than the then
applicable Trigger Amount. The "Trigger Amount" for any Distribution Date
occurring after the first five years will be as follows: for any Distribution
Date during the sixth year after the Closing Date, 30% of the initial sum of the
Certificate Principal Balances of the Subordinate Certificates; for any
Distribution Date during the seventh year after the Closing Date, 35% of the
initial sum of the Certificate Principal Balances of the Subordinate
Certificates; for any Distribution Date during the eighth year after the Closing
Date, 40% of the initial sum of the Certificate Principal Balances of the
Subordinate Certificates; for any Distribution Date during the ninth year after
the Closing Date, 45% of the initial sum of the Certificate Principal Balances
of the Subordinate Certificates; and for any Distribution Date during the tenth
year (or any year thereafter) after the Closing Date, 50% of the initial sum of
the Certificate Principal Balances of the Subordinate Certificates.

                  Notwithstanding the foregoing, upon a reduction of the
Certificate Principal Balances of the Class A-1 Certificates and the Class A-2
Certificates to zero, the Senior Prepayment Percentage will equal 0%.
Furthermore, on any Distribution Date after the reduction of the Certificate
Principal Balance of either the Class A-1 Certificates or the Class A-2
Certificates to zero, the Senior Percentage for the remaining Class of Class A
Certificates will be the lesser of (a) 100% and (b) a fraction, expressed as a
percentage, the numerator of which is the excess, if any, of the aggregate
Certificate Principal Balance of the remaining Class A Certificates for such
Distribution Date over the aggregate amount, if any, payable to the Holders of
the remaining Class A Certificates on such date pursuant to clause (d) of the
definition of "Senior Principal Distribution Amount," and the denominator of
which is the sum of (i) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the Mortgage Loans in both Loan Groups,
plus (ii) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the REO Properties in both Loan Groups, in each
case before reduction for any Realized Losses

                                      -30-

<PAGE>

on such Distribution Date, and the Subordinate Percentage on such a Distribution
Date will be 100% minus the Senior Percentage. In addition, on any Distribution
Date on which the Senior Percentage for either Class of Class A Certificates
exceeds the initial Senior Percentage for such Class, the Senior Prepayment
Percentage for each Class of Class A Certificates shall be 100%.

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

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

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

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

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

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

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

                                      -31-

<PAGE>

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

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

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

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

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

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

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

                                      -32-

<PAGE>

calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

                  "Servicing Fee Rate": 0.25% per annum.

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

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

                  "Special Hazard Amount": Initially, an amount equal to
$5,798,961. As of each anniversary of the Cut-off Date, an amount equal to the
lesser of (a) the Special Hazard Amount as of the immediately preceding
anniversary of the Cut-off Date minus the aggregate amount of Special Hazard
Losses allocated solely to the Subordinate Certificates in accordance with
Section 4.04 since such immediately preceding anniversary and (b) the Adjustment
Amount (as defined below) as most recently calculated. For each anniversary of
the Cut-off Date, the Adjustment Amount shall be equal to the greatest of (i)
the product of 1.00% multiplied by the outstanding principal balance of the
Mortgage Loans on the Distribution Date immediately preceding such anniversary,
(ii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans secured by Mortgaged
Properties located in the same zip code area in the State of California and
(iii) twice the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the largest Mortgage Loan.

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

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

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

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

                                      -33-

<PAGE>

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

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

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

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

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

                                      -34-

<PAGE>

                  "Stripped Interest Rate": With respect to any Mortgage Loan or
related REO Property, the excess, if any, of the Net Mortgage Rate minus 8.00%
per annum.

                  "Subordinate Certificate": Any Class B-1 Certificate, Class
B-2 Certificate, Class B-3 Certificate, Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate.

                  "Subordinate Percentage": With respect to any Distribution
Date and the Subordinate Certificates, the weighted average of the Group I
Subordinate Percentage and the Group II Subordinate Percentage, weighted based
on the aggregate principal balance of the Non-Class PO Percentages of the
Scheduled Principal Balances of the related Mortgage Loans immediately prior to
such Distribution Date. Notwithstanding the foregoing, on any Distribution Date
after the reduction of the Certificate Principal Balance of either the Class A-1
Certificates or the Class A-2 Certificates to zero, the Subordinate Percentage
on such a Distribution Date will be 100% minus the Senior Percentage for such
Distribution Date.

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

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

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

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

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

              (iii) the related Non-Class PO Percentage of the Stated Principal
         Balance (calculated immediately prior to such Distribution Date) of
         each Mortgage Loan that was

                                      -35-

<PAGE>

         purchased, sold or replaced pursuant to or as contemplated by Section
         2.03, Section 3.16(c) or Section 9.01 during the related Prepayment
         Period;

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

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

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

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

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

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

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

                                      -36-

<PAGE>

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

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

                  "Termination Price":  As defined in Section 9.01.

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

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

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

                  "Trust Fund": 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 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 interests created
thereby and excluding Section 17 thereof); and (v) the Collection Account, the
Distribution Account and any REO Account and such assets that are deposited
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, the Trust Fund specifically excludes all
payments and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date.

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

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder.

                                      -37-

<PAGE>

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

                  "Undercollateralized Loan Group": As to any Distribution Date,
either Loan Group for which an Underollateralization Amount greater than zero is
calculated.

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

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

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

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

                                      -38-

<PAGE>

Rights allocated to any Class of Certificates shall be allocated among such
Certificates PRO RATA in accordance with the respective Percentage Interests
evidenced thereby.

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

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

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

                                      -39-

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

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

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

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

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

                                      -40-

<PAGE>

         power of attorney will be promptly delivered to the Trustee upon
         receipt by the Depositor; or (b) in the case where a public recording
         office retains the original recorded Mortgage or power of attorney or
         in the case where a Mortgage or power of attorney is lost after
         recordation in a public recording office, a copy of such Mortgage or
         power of attorney with the recording information thereon certified by
         such public recording office to be a true and complete copy of the
         original recorded Mortgage or power of attorney;

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

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

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

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

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

                  (viii) the original lender's title insurance policy, together
         with all endorsements or riders which were issued with or subsequent to
         the issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee

                                      -41-

<PAGE>

         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company or an attorney's title opinion, if customary in the related
         jurisdiction where the Mortgaged Property is located;

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

                  (x) if applicable, a true and complete copy, certified as such
         by an officer of the Seller, of each certificate or other evidence of
         merger or change of name, if any of the Mortgage Loans were acquired by
         the Seller by merger or acquired or originated by the Seller while
         conducting business under a name other than its present name and such
         certificate or other evidence shall not have been recorded in the
         public recording office where the related Mortgage is required to be
         recorded.

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

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

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

                                      -42-

<PAGE>

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

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

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

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

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

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

                                      -43-

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

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

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

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the Seller
and the Master Servicer of such defect, missing document or breach and request
that the Seller deliver such missing document or cure such defect or breach
within 90 days from the date the Seller was notified of such missing document,
defect or breach, and if the Seller does not deliver such missing document or
cure such defect or breach in all material respects during such period, the
Trustee shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to repurchase such Mortgage Loan from the Trust Fund at the
Purchase Price within 90 days after the date on which the Seller was notified
(subject to Section 2.03(e)) of such missing document, defect or breach, if and
to the extent that the Seller is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage File. In lieu of repurchasing any such Mortgage
Loan as provided above, if so provided in the Mortgage Loan Purchase Agreement,
the Seller may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a

                                      -44-

<PAGE>

Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(d).
It is understood and agreed that the obligation of the Seller to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee on behalf of
the Certificateholders.

                  (b) [Reserved];

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

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

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

                                      -45-

<PAGE>

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

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

                  (e) Upon discovery by the Depositor, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller or the Depositor shall repurchase
or, subject to the limitations set forth in Section 2.03(d), substitute one or
more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within
90 days of the earlier of discovery or receipt of such notice with respect to
such affected Mortgage Loan. Such repurchase or substitution shall be made by
(i) the Seller, if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Seller under the Mortgage Loan Purchase Agreement, or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or substitution
shall be made in the same manner as set forth in Sections 2.03(a). The Trustee
shall reconvey to the Depositor or the Seller, as the case may be, the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased by the Seller for breach
of a representation or warranty.

                  SECTION 2.04. [Reserved].

                  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:

                                      -46-

<PAGE>

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

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

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

                                      -47-

<PAGE>

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

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

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

                       (vii) The Master Servicer covenants that its computer and
                  other systems used in servicing the Mortgage Loans operate in
                  a manner such that the Master Servicer can service the
                  Mortgage Loans in accordance with the terms of this Agreement.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee.

                  SECTION 2.06. Issuance of the Certificates.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in the Trust Fund delivered on the date hereof, receipt of which
is hereby acknowledged. Concurrently with such assignment and delivery of such
assets delivered on the date hereof and in exchange therefor, the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations.
The interests evidenced by the Certificates constitute the entire beneficial
ownership interest in the Trust Fund.

                                      -48-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders and loan servicers administering similar
mortgage loans but without regard to:

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

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

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

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

To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any

                                      -49-

<PAGE>

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 each Primary Mortgage Insurance Policy and
any standard hazard insurance policy. Subject to Section 3.17, the Trustee shall
execute, at the written request of the Master Servicer, and furnish to the
Master Servicer and any Sub-Servicer such documents as are necessary or
appropriate to enable the Master Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Master Servicer a power of attorney to carry out such duties.
The Trustee shall not be liable for the actions of the Master Servicer or any
Sub-Servicers under such powers of attorney.

                  In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not
permit any modification, waiver or amendment of any term of any Mortgage Loan,
unless (i) the Master Servicer provides an Opinion of Counsel that such action
will not both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause the Trust Fund to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions or (ii)
such modification, waiver or amendment is made in accordance with the terms of
Section 3.07.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.

                  SECTION 3.02. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by the Rating Agency of the rating on any Class of Certificates)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-

                                      -50-

<PAGE>

Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts of
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.

                  SECTION 3.03. Successor Sub-Servicers.

                  The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed

                                      -51-

<PAGE>

simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

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

                  SECTION 3.04. Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

                  SECTION 3.05. No Contractual Relationship Between
                                Sub-Servicers and Trustee or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.

                  SECTION 3.06. Assumption or Termination of Sub-Servicing
                                Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master

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<PAGE>

Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Primary Mortgage Insurance Policy
and any other applicable insurance policies, follow such collection procedures
as it would follow with respect to mortgage loans comparable to the Mortgage
Loans and held for its own account. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, penalty interest, only upon determining that the coverage of such
Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not
be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided that any extension
pursuant to clause (ii) above shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder, except as provided
below. In the event of any such arrangement pursuant to clause (ii) above, the
Master Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.03 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the standards set
forth in Section 3.01, may also accept payment from the related Mortgagor of an
amount less than the Stated Principal Balance in final satisfaction of such
Mortgage Loan (such payment, a "Short Pay-off") or consent to the postponement
of strict compliance with any such term or otherwise grant indulgence to any
Mortgagor.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not adjust the Mortgage Rate on any Mortgage Loan
originated as an adjustable-rate Mortgage Loan.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more

                                      -53-

<PAGE>

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 (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub- Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than one Business Day after the deposit of such funds into the clearing account.
The Sub-Servicer shall thereafter deposit such proceeds in the Collection
Account or remit such proceeds to the Master Servicer for deposit in the
Collection Account not later than two Business Days after the deposit of such
amounts in the Sub-Servicing Account. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Sub-Servicer receives such payments.

                  SECTION 3.09. Collection of Taxes, Assessments and Similar
                                Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, fire and hazard insurance premiums, Primary Mortgage
Insurance Premiums, water charges, sewer rents and comparable items for the
account of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
one Business Day after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due

                                      -54-

<PAGE>

to a tax sale or the foreclosure of a tax lien. The Master Servicer assumes full
responsibility for the payment of all such bills and shall effect payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments.

                  SECTION 3.10. Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than two Business Days after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than one Business Day after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it from
and after the Cut-off Date (other than in respect of principal or interest on
the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:

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

                         (ii) all payments on account of interest (net of the
                  related Servicing Fee) on each Mortgage Loan;

                       (iii) all Insurance Proceeds and Liquidation Proceeds
                  (other than proceeds collected in respect of any particular
                  REO Property and amounts paid by the Master Servicer in
                  connection with a purchase of Mortgage Loans and REO
                  Properties pursuant to Section 9.01);

                        (iv) any amounts required to be deposited pursuant to
                  Section 3.12 in connection with any losses realized on
                  Permitted Investments with respect to funds held in the
                  Collection Account;

                         (v) any amounts required to be deposited by the Master
                  Servicer pursuant to the second paragraph of Section 3.14(a)
                  in respect of any blanket policy deductibles;

                         (vi) all proceeds of any Mortgage Loan repurchased or
                  purchased in accordance with Section 2.03 or Section 9.01; and

                       (vii) all amounts required to be deposited in connection
                  with shortfalls in principal amount of Qualified Substitute
                  Mortgage Loans pursuant to Section 2.03.

                                      -55-

<PAGE>

For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.

                  The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges or assumption fees need not be deposited by the Master Servicer in the
Collection Account. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding. To the extent that the Master Servicer
incorrectly applies any curtailment on any Mortgage Loan, the Master Servicer
may withdraw such amount from the Collection Account to the extent of future
curtailments.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 12:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.26, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay
such amounts to the Persons entitled thereto.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Master Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the

                                      -56-

<PAGE>

Distribution Account any amount not required to be deposited therein, it may at
any time request that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Trustee
from time to time for deposit, and upon written notification from the Master
Servicer, the Trustee shall so deposit, in the Distribution Account:

                         (i) any P&I Advances, as required pursuant to Section
                  4.03, unless delivered directly to the Trustee by an Advancing
                  Person;

                         (ii) any amounts required to be deposited pursuant to
                  Section 3.23(d) or (f) in connection with any REO Property;

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

                         (iv) any amounts required to be deposited pursuant to
                  Section 3.24 in connection with any Prepayment Interest
                  Shortfalls; and

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

                  (e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder.

                  (f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.

                  SECTION 3.11. Withdrawals from the Collection Account and
                                Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:

                         (i) to remit to the Trustee for deposit in the
                  Distribution Account the amounts required to be so remitted
                  pursuant to Section 3.10(b) or permitted to be so remitted
                  pursuant to the first sentence of Section 3.10(d);

                        (ii) subject to Section 3.16(d), to reimburse the Master
                  Servicer for P&I Advances, but only to the extent of amounts
                  received which represent Late Collections (net of the related
                  Servicing Fees) of Monthly Payments on Mortgage Loans with
                  respect to which such P&I Advances were made in accordance
                  with the provisions of Section 4.03;

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<PAGE>

                       (iii) subject to Section 3.16(d), to pay the Master
                  Servicer or any Sub- Servicer (A) any unpaid Servicing Fees,
                  (B) any unreimbursed Servicing Advances with respect to each
                  Mortgage Loan, but only to the extent of any Liquidation
                  Proceeds, Insurance Proceeds or other amounts as may be
                  collected by the Master Servicer from a Mortgagor, or
                  otherwise received with respect to such Mortgage Loan and (C)
                  any nonrecoverable Servicing Advances following the final
                  liquidation of a Mortgage Loan, but only to the extent that
                  Late Collections, Liquidation Proceeds and Insurance Proceeds
                  received with respect to such Mortgage Loan are insufficient
                  to reimburse the Master Servicer or any Sub-Servicer for such
                  Servicing Advances;

                        (iv) to pay to the Master Servicer as servicing
                  compensation (in addition to the Servicing Fee) on the Master
                  Servicer Remittance Date any interest or investment income
                  earned on funds deposited in the Collection Account;

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

                        (vi) to reimburse the Master Servicer for any P&I
                  Advance previously made which the Master Servicer has
                  determined to be a Nonrecoverable P&I Advance in accordance
                  with the provisions of Section 4.03;

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

                      (viii) to reimburse the Master Servicer or the Trustee, as
                  the case may be, for expenses reasonably incurred in respect
                  of the breach or defect giving rise to the purchase obligation
                  under Section 2.03 or Section 2.04 of this Agreement that were
                  included in the Purchase Price of the Mortgage Loan, including
                  any expenses arising out of the enforcement of the purchase
                  obligation;

                       (ix) to pay, or to reimburse the Master Servicer for
                  advances in respect of expenses incurred in connection with
                  any Mortgage Loan pursuant to Section 3.16(b); and

                       (x) to clear and terminate the Collection Account
                  pursuant to Section 9.01.

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

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<PAGE>

the next succeeding Master Servicer Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (vii) above.

                  (b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:

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

                       (ii) to pay to itself amounts to which each is entitled
                  pursuant to Section 8.05 and any other Extraordinary Trust
                  Fund Expenses;

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

                       (iv) to reimburse itself pursuant to Section 7.02 or
                  pursuant to Section 7.01 to the extent such amounts in Section
                  7.01 were not reimbursed by the Master Servicer;

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

                       (vi) to pay to an Advancing Person reimbursements for P&I
                  Advances and/or Servicing Advances pursuant to Section 3.26;

                       (vii) to reimburse itself for any P&I Advance made by it
                  under Section 7.01 (if not reimbursed by the Master Servicer)
                  to the same extent the Master Servicer would be entitled to
                  reimbursement under Section 3.11(a); and

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

                  SECTION 3.12. Investment of Funds in the Collection Account
                                and the Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name

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<PAGE>

of the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Trustee shall be entitled to sole possession (except with respect
to investment direction of funds held in the Collection Account and any income
and gain realized thereon) over each such investment, and any certificate or
other instrument evidencing any such investment shall be delivered directly to
the Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:

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

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

                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.

                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

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

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                  SECTION 3.13. Maintenance of the Primary Mortgage Insurance
                                Policies; Collections Thereunder.

                  The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreement and to the extent available, a Primary
Mortgage Insurance Policy with respect to each Mortgage Loan so insured as of
the Closing Date (or, in the case of a Qualified Substitute Mortgage Loan, on
the date of substitution). Such coverage will be maintained with respect to each
such Mortgage Loan for so long as it is outstanding, subject to any applicable
laws or until the related Loan-to-Value Ratio is reduced to less than or equal
to 80% based on Mortgagor payments. The Master Servicer shall cause the premium
for each Primary Mortgage Insurance Policy to be paid on a timely basis and
shall pay such premium out of its own funds if it is not otherwise paid. The
Master Servicer or the related Sub-Servicer, if any, will not cancel or refuse
to renew any such Primary Mortgage Insurance Policy in effect on the Closing
Date (or, in the case of a Qualified Substitute Mortgage Loan, on the date of
substitution) that is required to be kept in force under this Agreement unless a
replacement Primary Mortgage Insurance Policy for such canceled or non-renewed
policy is obtained from and maintained with a Qualified Insurer.

                  The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Mortgage Insurance
Policy. In connection with any assumption and modification agreement or
substitution of liability agreement entered into or to be entered into pursuant
to Section 3.15, the Master Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage under
the Primary Mortgage Insurance Policy. If any such Primary Mortgage Insurance
Policy is terminated as a result of such assumption, the Master Servicer or the
related Sub-Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.

                  In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by
the Master Servicer under any Primary Mortgage Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11; and any amounts collected by the Master Servicer under any Primary
Mortgage Insurance Policy in respect of any REO Property shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 3.23. In those
cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer,
on behalf of itself, the Trustee, and the Certificateholders, will present
claims to the insurer under any Primary Mortgage Insurance Policy and all
collections thereunder shall be deposited initially in the Sub-Servicing
Account.

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<PAGE>

                  SECTION 3.14. Maintenance of Hazard Insurance and Errors and
                                Omissions and Fidelity Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Rate and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of B+:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been

                                      -62-

<PAGE>

covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and Certificateholders, claims under any such blanket policy
in a timely fashion in accordance with the terms of such policy.

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

                  SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general

                                      -63-

<PAGE>

mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Mortgage Insurance Policy or hazard
insurance policy, or a new policy meeting the requirements of this Section is
obtained. Any fee collected by the Master Servicer in respect of an assumption
or substitution of liability agreement will be retained by the Master Servicer
as additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund, the Master Servicer or the

                                      -64-

<PAGE>

Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:

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

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

                  The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                  (c) The Master Servicer may at its option purchase from the
Trust Fund any Mortgage Loan on or after the 90th day on which the payment on
such Mortgage Loan was due and payable and not received, which the Master
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price; provided,
however, that the Master Servicer shall purchase any such Mortgage Loans or
related REO Properties on the basis of

                                      -65-

<PAGE>

delinquency, purchasing the most delinquent Mortgage Loans or related REO
Properties first. The Purchase Price for any Mortgage Loan purchased hereunder
shall be deposited in the Collection Account, and the Trustee, upon receipt of
written certification from the Master Servicer of such deposit, shall release or
cause to be released to the Master Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Master Servicer shall furnish and as shall be necessary
to vest in the Master Servicer title to any Mortgage Loan released pursuant
hereto.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii)(A) or
(B); second, to accrued and unpaid interest on the Mortgage Loan, to the date of
the Final Recovery Determination, or to the Due Date prior to the Distribution
Date on which such amounts are to be distributed if not in connection with a
Final Recovery Determination; and third, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than the full amount of accrued and unpaid interest due on such Mortgage Loan,
the amount of such recovery will be allocated by the Master Servicer as follows:
first, to unpaid Servicing Fees; and second, to the balance of the interest then
due and owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(a)(iii)(A).

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

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivery of two copies of a Request for
Release in the form of Exhibit E (which shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such copies of the Request
for Release, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Mortgage Insurance Policy or any other insurance policy relating to
the Mortgage Loans, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee of a Request for Release, release the related Mortgage
File to the Master Servicer, and the Trustee shall, at the direction of the
Master Servicer, execute such documents as shall be necessary to the prosecution
of any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each and every Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the

                                      -66-

<PAGE>

Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non- judicially, and
the Master Servicer has delivered to the Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of two copies of a new Request for Release stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, the related Mortgage File shall not be required to
be returned to the Trustee.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section
3.11(a)(iii)(A) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges and other similar fees and charges shall be retained
by the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.

                                      -67-

<PAGE>

                  SECTION 3.19. Reports to the Trustee; Collection Account
                                Statements.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, upon the request of the Trustee, a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on the last day of the calendar
month relating to such Distribution Date and showing, for the period covered by
such statement, the aggregate amount of deposits into and withdrawals from the
Collection Account of each category of deposit specified in Section 3.10(a) and
each category of withdrawal specified in Section 3.11. Such statement may be in
the form of the then current Fannie Mae Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the Depositor
and the Rating Agency on or before April 15 of each calendar year commencing in
2001, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.

                  SECTION 3.21. Independent Public Accountants' Servicing
                                Report.

                  Not later than April 15 of each calendar year commencing in
2001, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-

                                      -68-

<PAGE>

Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee and the Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee. In the event
such firm of independent certified public accountants requires the Trustee to
agree to the procedures performed by such firm, the Master Servicer shall direct
the Trustee in writing to so agree; it being understood and agreed that the
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Master Servicer, and the Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.

                  SECTION 3.22. Access to Certain Documentation.

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

                  SECTION 3.23. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property before the close of the third taxable year
following the year the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the Trust Fund of such REO Property subsequent to three
years after its acquisition will not result in the imposition on the Trust Fund
of taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause the Trust Fund 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 the Trust Fund of any "income from non-permitted
assets" within the meaning of

                                      -69-

<PAGE>

Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.

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

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

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

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

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

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

                  Notwithstanding the foregoing, none of the Master Servicer or
the Trustee shall:

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<PAGE>

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

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

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

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

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.

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

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

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

                       (iii) none of the provisions of this Section 3.23(c)
                  relating to any such contract or to actions taken through any
                  such Independent Contractor shall be deemed to relieve the
                  Master Servicer of any of its duties and obligations to the
                  Trustee on behalf of the Certificateholders with respect to
                  the operation and management of any such REO Property; and

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

                                      -71-

<PAGE>

The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. Any income
from the related REO Property received during any calendar months prior to a
Final Recovery Determination, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d), shall be withdrawn by the Master Servicer from
each REO Account maintained by it and deposited into the Distribution Account in
accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date
relating to a Final Recovery Determination with respect to such Mortgage Loan,
for distribution on the related Distribution Date in accordance with Section
4.01.

                  (e) Subject to the time constraints set forth in Section
3.23(a), and further subject to obtaining the approval of the insurer under any
related Primary Mortgage Insurance Policy (if and to the extent that such
approvals are necessary to make claims under such policies in respect of the
affected REO Property), each REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
shall deem necessary or advisable, as shall be normal and usual in its general
servicing activities for similar properties.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

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

                                      -72-

<PAGE>

                  SECTION 3.24. Obligations of the Master Servicer in Respect of
                                Prepayment Interest Shortfalls.

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 12:00 p.m. New York time on the
Master Servicer Remittance Date from its own funds an amount equal to the lesser
of (i) the aggregate of the Prepayment Interest Shortfalls for the related
Distribution Date resulting from full or partial Principal Prepayments during
the related Prepayment Period and (ii) the amount of its aggregate Servicing Fee
for the most recently ended calendar month.

                  SECTION 3.25. Obligations of the Master Servicer in Respect of
                                Monthly Payments.

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

                  SECTION 3.26. Advance Facility.

                  (a) The Master Servicer is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may fund P&I Advances and/or Servicing Advances under this Agreement, although
no such facility shall reduce or otherwise affect the Master Servicer's
obligation to fund such P&I Advances and/or Servicing Advances. To the extent
that an Advancing Person funds any P&I Advance or any Servicing Advance and
provides the Trustee with notice acknowledged by the Master Servicer that such
Advancing Person is entitled to reimbursement, such Advancing Person shall be
entitled to receive reimbursement pursuant to this Agreement for such amount to
the extent provided in Section 3.26(b). Such notice from the Advancing Person
must specify the amount of the reimbursement and must specify which Section of
this Agreement permits the applicable P&I Advance or Servicing Advance to be
reimbursed. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.26. An Advancing Person whose
obligations hereunder are limited to the funding of P&I Advances and/or
Servicing Advances shall not be required to meet the qualifications of a
Sub-Servicer pursuant to Section 3.02 hereof.

                  (b) If an Advancing Person is entitled to reimbursement for
any particular P&I Advance or Servicing Advance, then the Master Servicer shall
not be permitted to reimburse itself therefor under Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), but instead the Master
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.10(b) to the extent of amounts on deposit in the
Collection Account on

                                      -73-

<PAGE>

the related Master Servicer Remittance Date. The Trustee is hereby authorized to
pay to an Advancing Person, reimbursements for P&I Advances and Servicing
Advances from the Distribution Account to the same extent the Master Servicer
would have been permitted to reimburse itself for such P&I Advances and/or
Servicing Advances in accordance with Section 3.11(a)(ii), Section 3.11(a)(iii),
Section 3.11(a)(vi) or Section 3.11(a)(ix), as the case may be, had the Master
Servicer made such Advance or Servicing Advance. The Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree.

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

                                      -74-

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

                  (a)(i) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the sum of the Group I
Available Distribution Amount for Loan Group I and the Group II Available
Distribution Amount for Loan Group II and distribute to the Class A
Certificateholders in the related Loan Group from the related Available
Distribution Amount (and, in the case of the Class IO Certificates, the Class PO
Certificates, the Subordinate Certificates and the Class R Certificates, from
the Available Distribution Amount for each Loan Group) the following amounts, in
the following order of priority:

                  FIRST, to distributions of interest in respect of the Class A
                  Certificates and the Class IO Certificates, in an amount
                  (allocable among such Certificates PRO RATA in accordance with
                  the respective amounts payable as to each pursuant to this
                  clause first) equal to the aggregate of the Interest
                  Distribution Amounts in respect of such Certificates for such
                  Distribution Date;

                  SECOND, to the extent of the Class PO Principal Distribution
                  Amount, to distributions of principal to the Class PO
                  Certificates (applied to reduce the Certificate Principal
                  Balances of such Certificates), until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  THIRD, to the extent of the related Senior Principal
                  Distribution Amount, to distributions of principal to the
                  related Class A Certificates (applied to reduce the
                  Certificate Principal Balance of such Certificates), until the
                  Certificate Principal Balance of each Class of the Class A
                  Certificates has been reduced to zero;

                  FOURTH, to distributions of interest in respect of the
                  Subordinate Certificates, other than the Class of Subordinate
                  Certificates with the highest numerical designation then
                  outstanding, in an amount (allocable among such Certificates
                  PRO RATA in accordance with the respective amounts payable as
                  to each pursuant to this clause FOURTH, in the order of
                  priority from the Class of Subordinate Certificates with the
                  lowest numerical designation to the Class of Subordinate
                  Certificates with the highest numerical designation entitled
                  to a distribution of interest pursuant to this clause FOURTH)
                  equal to the aggregate of the Interest Distribution Amounts in
                  respect of such Certificates for such Distribution Date;

                  FIFTH, to distributions of principal to the Class PO
                  Certificates (applied to reduce the Certificate Principal
                  Balance of such Certificates) in an amount equal to the
                  excess, if any, of the Class PO Percentage of the Stated
                  Principal Balance of each Class PO Mortgage Loan as to which a
                  Final Liquidation has occurred, over the amount

                                      -75-

<PAGE>

                  distributed in respect of such Class PO Mortgage Loan to the
                  Class PO Certificates pursuant to clause SECOND above;

                  SIXTH, to distributions in respect of the Class of Subordinate
                  Certificates with the highest numerical designation then
                  outstanding, in an amount equal to the Interest Distribution
                  Amount in respect of such Certificates for such Distribution
                  Date;

                  SEVENTH, to the Holders of the Classes of the Subordinate
                  Certificates, an aggregate amount equal to the Subordinate
                  Principal Distribution Amount for such Distribution Date
                  (applied to reduce the Certificate Principal Balances of such
                  Certificates), allocable among the Classes of Subordinate
                  Certificates PRO RATA in accordance with the respective
                  amounts payable as to each such Class pursuant to the
                  priorities and amounts set forth in Section 4.01(b)(i); and

                  EIGHTH, to the Holders of the Class R Certificates, any
                  remaining amounts.

                  (ii) All references above to the Certificate Principal Balance
         of any Class of Certificates shall be to the Certificate Principal
         Balance of such Class prior to the allocation of Extraordinary Trust
         Fund Expenses and Realized Losses, in each case allocated to such Class
         of Certificates, on such Distribution Date pursuant to Section 4.04.

                  (b)(i) On each Distribution Date, the aggregate distributions
         of principal made on such date in respect of the Subordinate
         Certificates pursuant to Section 4.01(a)(i) seventh above shall be
         applied among the various Classes thereof, in the order of priority
         from the Class of Subordinate Certificates with the lowest numerical
         designation to the Class of Subordinate Certificates with the highest
         numerical designation, in each case to the extent of remaining
         available funds up to the amount allocable to such Class for such
         Distribution Date and in each case until the Certificate Principal
         Balance of each such Class is reduced to zero, in an amount with
         respect to each such Class equal to the sum of (X) the related Class B
         Percentage of the amounts described in clauses (i) through (v) of
         clause (a) of the definition of Subordinate Principal Distribution
         Amount, (Y) the portion of the amounts described in clauses (b) and (c)
         of the definition of Subordinate Principal Distribution Amount
         allocable to such Class pursuant to Section 4.01(b)(ii) below and (Z)
         the excess, if any, of the amount required to be distributed to such
         Class pursuant to this Section 4.01(b)(i) for the immediately preceding
         Distribution Date, over the aggregate distributions of principal made
         in respect of such Class of Certificates on such immediately preceding
         Distribution Date pursuant to Section 4.01 to the extent that any such
         excess is not attributable to Realized Losses which were allocated to
         Subordinate Certificates with a lower priority pursuant to Section
         4.04.

                  (ii) On any Distribution Date, the portion of (a) all net
         Liquidation Proceeds and Insurance Proceeds with respect to any
         Mortgage Loans that were the subject of a Final Recovery Determination
         in the related Prepayment Period and (b) all Principal Prepayments
         received in respect of the Mortgage Loans in the related Prepayment
         Period, allocable to principal and not included in the Senior Principal
         Distribution Amount and the Class PO

                                      -76-

<PAGE>

         Principal Distribution Amount, will be allocated on a PRO RATA basis
         among the following Classes of Subordinate Certificates (each, an
         "Eligible Class") in proportion to the respective outstanding
         Certificate Principal Balances thereof: (i) the Class B-1 Certificates,
         (ii) the Class B-2 Certificates, if on such Distribution Date the
         aggregate percentage interest in the Trust Fund evidenced by the Class
         B-2 Certificates, the Class B-3 Certificates, the Class B-4
         Certificates, the Class B-5 Certificates and the Class B-6 Certificates
         equal or exceeds 2.25% before giving effect to distributions on such
         Distribution Date, (iii) the Class B-3 Certificates, if on such
         Distribution Date the aggregate percentage interest in the Trust Fund
         evidenced by the Class B-3 Certificates, the Class B-4 Certificates,
         the Class B-5 Certificates and the Class B-6 Certificates equal or
         exceeds 1.35% before giving effect to distributions on such
         Distribution Date, (iv) the Class B-4 Certificates, if on such
         Distribution Date the aggregate percentage interest in the Trust Fund
         evidenced by the Class B-4 Certificates, the Class B-5 Certificates and
         the Class B-6 Certificates equal or exceeds 0.75% before giving effect
         to distributions on such Distribution Date, (v) the Class B-5
         Certificates, if on such Distribution Date the aggregate percentage
         interest in the Trust Fund evidenced by the Class B-5 Certificates and
         the Class B-6 Certificates equal or exceeds 0.45% before giving effect
         to distributions on such Distribution Date and (iii) the Class B-6
         Certificates, if on such Distribution Date the percentage interest in
         the Trust Fund evidenced by the Class B-6 Certificates equals or
         exceeds 0.25% before giving effect to distributions on such
         Distribution Date. Notwithstanding the foregoing, if the application of
         the foregoing on any Distribution Date as provided in Section 4.01
         would result in a distribution in respect of principal to any Class or
         Classes of Subordinate Certificates in an amount greater than the
         remaining Certificate Principal Balance thereof (any such Class, a
         "Maturing Class") then: (a) the amount to be allocated to each Maturing
         Class shall be reduced to a level that, when applied as described
         above, would exactly reduce the Certificate Principal Balance of such
         Class to zero and (b) the total amount of the reductions pursuant to
         clause (a) above in the amount to be allocated to the Maturing Class or
         Classes shall be allocated among the remaining Eligible Classes on a
         PRO RATA basis in proportion to the respective outstanding Certificate
         Principal Balances thereof prior to the allocation thereto of any of
         the amounts described in the preceding sentence.

                  (c) On any Distribution Date on which the Certificate
Principal Balance of either Class of Class A Certificates has been reduced to
zero, the remaining Class of Class A Certificates shall be entitled to receive
in reduction of its Certificate Principal Balance the Class A Principal
Adjustment Amount.

                  (d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(f) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately

                                      -77-

<PAGE>

prior to such Distribution Date or otherwise by check mailed by first class mail
to the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.

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

                  (e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee or the
Master Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

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

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

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

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

                                      -78-

<PAGE>

The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Salomon Smith Barney
Inc. all such amounts, and all rights of non-tendering Certificateholders in or
to such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 4.01(e).

                  SECTION 4.02. Statements to Certificateholders.

                  On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trustee shall prepare and
make available to each Holder of the Regular Certificates, the Master Servicer
and the Rating Agencies, a statement as to the distributions to be made on such
Distribution Date

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

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

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

                         (iv) the aggregate amount of P&I Advances for each Loan
                  Group for such Distribution Date;

                         (v) the aggregate Stated Principal Balance of the
                  Mortgage Loans and any REO Properties in each Loan Group at
                  the close of business on such Distribution Date;

                        (vi) the number, aggregate principal balance, weighted
                  average remaining term to maturity and weighted average
                  Mortgage Rate of the Mortgage Loans in each Loan Group as of
                  the related Due Date;

                       (vii) the number and aggregate unpaid principal balance
                  of Mortgage Loans in each Loan Group that are (a) delinquent
                  30 to 59 days, (b) delinquent 60 to 89 days, (c) delinquent 90
                  or more days in each case, as of the last day of the preceding
                  calendar month, (d) as to which foreclosure proceedings have
                  been commenced and (e) with respect to which the related
                  Mortgagor has filed for protection under

                                      -79-

<PAGE>

                  applicable bankruptcy laws, with respect to whom bankruptcy
                  proceedings are pending or with respect to whom bankruptcy
                  protection is in force;

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

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

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

                        (xi) the aggregate amount of Realized Losses with
                  respect to the Mortgage Loans in each Loan Group incurred
                  during the related Prepayment Period (or, in the case of
                  Bankruptcy Losses allocable to interest, in respect of the
                  related Due Period), separately identifying whether such
                  Realized Losses constituted Fraud Losses, Special Hazard
                  Losses or Bankruptcy Losses;

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

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

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

                        (xv) the Interest Distribution Amount in respect of each
                  such Class of Certificates (other than the Class PO
                  Certificates) for such Distribution Date (separately
                  identifying any reductions in the case of Subordinate
                  Certificates resulting from the allocation of Realized Losses
                  allocable to interest and Extraordinary Trust Fund Expenses on
                  such Distribution Date) and the respective portions thereof,
                  if any, remaining unpaid following the distributions made in
                  respect of such Certificates on such Distribution Date;

                         (xvi) the aggregate amount of any Prepayment Interest
                  Shortfalls for such Distribution Date, to the extent not
                  covered by payments by the Master Servicer pursuant to Section
                  3.24;

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<PAGE>

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

                         (xviii) the then-applicable Bankruptcy Amount, Fraud
                  Loss Amount, and Special Hazard Amount;

                         (xix) the Weighted Average Stripped Interest Rate with
                  respect to the Mortgage Loans for such Distribution Date;

                        (xx) with respect to any Mortgage Loan as to which
                  foreclosure proceedings have been concluded, the loan number
                  and unpaid principal balance of such Mortgage Loan as of the
                  date of such conclusion of foreclosure proceedings; and

                       (xxi) with respect to Mortgage Loans as to which a Final
                  Liquidation has occurred, the number of Mortgage Loans, the
                  unpaid principal balance of such Mortgage Loans as of the date
                  of such Final Liquidation and the amount of proceeds
                  (including Liquidation Proceeds and Insurance Proceeds)
                  collected in respect of such Mortgage Loans.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Master Servicer and the Rating
Agencies via the Trustee's internet website and its fax-on- demand service. The
Trustee's fax-on-demand service may be accessed by calling (301) 815-6610.
The Trustee's internet website shall initially be located at "www.ctslink.com".
Assistance in using the website or the fax-on-demand service can be obtained by
calling the Trustee's customer service desk at (301) 815-6600. Parties that are
unable to use the above distribution options are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the way such
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Trustee shall provide timely
and adequate notification to all above parties regarding any such changes.

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

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

                                      -81-

<PAGE>

                  On each Distribution Date, the Trustee shall forward to the
Depositor, each Holder of a Residual Certificate and the Master Servicer, a copy
of the reports forwarded to the Regular Certificateholders on such Distribution
Date and a statement setting forth the amounts, if any, actually distributed
with respect to the Residual Certificates, respectively, on such Distribution
Date.

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

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

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

                  SECTION 4.03. Remittance Reports; P&I Advances.

                  (a) On the Determination Date, the Master Servicer shall
deliver to the Trustee by telecopy (or by such other means as the Master
Servicer and the Trustee may agree from time to time) a Remittance Report with
respect to the related Distribution Date. Such Remittance Report will include
(i) the amount of P&I Advances to be made by the Master Servicer in respect of
the related Distribution Date, the aggregate amount of P&I Advances outstanding
after giving effect to such P&I Advances, and the aggregate amount of
Nonrecoverable P&I Advances in respect of such Distribution Date and (ii) such
other information with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.02. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.

                  (b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property,

                                      -82-

<PAGE>

which REO Property was acquired during or prior to the related Due Period and as
to which REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date.

                  On or before 12:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by telecopy by the close of business on
the Master Servicer Remittance Date in the event that the amount remitted by the
Master Servicer to the Trustee on such Master Servicer Remittance Date is less
than the P&I Advances required to be made by the Master Servicer for the related
Distribution Date.

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

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

                                      -83-

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                  SECTION 4.04. Allocation of Extraordinary Trust Fund Expenses
                                and Realized Losses.

                  (a) Prior to each Distribution Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Fraud Losses or Special Hazard
Losses; and (iii) the respective portions of such Realized Losses allocable to
interest and allocable to principal. Prior to each Distribution Date, the Master
Servicer shall also determine as to each Mortgage Loan: (A) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (B) the total amount of Realized
Losses, if any, incurred in connection with Debt Service Reductions in respect
of Monthly Payments due during the related Due Period. The information described
in the two preceding sentences that is to be supplied by the Master Servicer
shall be evidenced by an Officers' Certificate delivered to the Trustee by the
Master Servicer prior to the Determination Date immediately following the end of
(x) in the case of Bankruptcy Losses allocable to interest, the Due Period
during which any such Realized Loss was incurred, and (y) in the case of all
other Realized Losses, the Prepayment Period during which any such Realized Loss
was incurred.

                  (b) All Realized Losses on the Mortgage Loans (other than
Excess Losses) shall be allocated by the Trustee on each Distribution Date as
follows: first, to the Class B-6 Certificates; second, to the Class B-5
Certificates; third, to the Class B-4 Certificates; fourth, to the Class B-3
Certificates; fifth, to the Class B-2 Certificates; and sixth, to the Class B-1
Certificates, in each case until the Certificate Principal Balance thereof has
been reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balances of the Subordinate Certificates to zero, all Realized Losses
shall be allocated among the Senior Certificates as follows: the related Class
PO Percentage of such Realized Losses shall be allocated to the Class PO
Certificates and the related Non-Class PO Percentage of such Realized Losses
shall be allocated to the Class A-1 Certificates, if such Realized Loss is on a
Group I Mortgage Loan and the Class A-2 Certificates, if such Realized Loss is
on a Group II Mortgage Loan.

                  Any Excess Losses attributable to any Mortgage Loan shall be
allocated among all the Regular Certificates (other than the Class IO
Certificates) as follows: the related Class PO Percentage of such Realized
Losses shall be allocated to the Class PO Certificates and the related Non-Class
PO Percentage of such Realized Losses shall be allocated by allocating the
related Senior Percentage of such Realized Loss to the related Senior
Certificates and the related Group Subordinate Percentage of such Realized Loss
to the Subordinate Certificates. Any allocation of a Realized Loss to a
Certificate will be made by reducing the Certificate Principal Balance thereof
by the amount so allocated as of the Distribution Date in the month following
the calendar month in which such Realized Loss was incurred.

                  Extraordinary Trust Fund Expenses shall be allocated by the
Trustee on each Distribution Date as follows: first, to the Class B-6
Certificates; second, to the Class B-5 Certificates; third, to the Class B-4
Certificates; fourth, to the Class B-3 Certificates; fifth, to the Class B-2
Certificates; and sixth, to the Class B-1 Certificates, in each case until the
Certificate

                                      -84-

<PAGE>

Principal Balance thereof has been reduced to zero. Thereafter, upon the
reduction of the Certificate Principal Balances of the Subordinate Certificates
to zero, such Extraordinary Trust Fund Expenses shall be allocated among the
Senior Certificates (other than the Class IO Certificates) on a PRO RATA basis.

                  As used herein, an allocation of a Realized Loss or
Extraordinary Trust Fund Expense on a "PRO RATA basis" among two or more
specified Classes of Certificates means an allocation on a PRO RATA basis, among
the various Classes so specified, to each such Class of Certificates on the
basis of their then outstanding Certificate Principal Balances prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.

                  (c) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate be
reduced more than once in respect of any particular amount both (i) allocable to
such Certificate in respect of Realized Losses or Extraordinary Trust Fund
Expenses pursuant to Section 4.04 and (ii) payable to the Holder of such
Certificate pursuant to Section 4.01(a) as a portion of the related Senior
Principal Distribution Amount.

                  SECTION 4.05. Compliance with Withholding Requirements.

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

                  SECTION 4.06. [Reserved].

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<PAGE>

                  SECTION 4.07. Commission Reporting.

         Within 15 days after each Distribution Date, the Trustee shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System, a Form 8-K with a copy of the statement to
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2001, the Trustee shall in accordance with industry standards file a
Form 15 Suspension Notification with respect to the Trust Fund, if applicable.
Prior to March 30, 2001, 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 Commission. The Trustee shall have no responsibility to file any items
other than those specified in this Section.

                                      -86-

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

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

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-11. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed,
authenticated and delivered by the Trustee to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Trustee by manual signature, and
such certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.

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

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

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

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book- Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of
$100,000, except that any beneficial ownership that was represented by a
Book-Entry Certificate in an amount less than $100,000 immediately prior to the
issuance of a Definitive Certificate shall be issued in a minimum denomination
equal to the amount represented by such Book-Entry Certificate. None of the
Depositor, the Master Servicer nor the Trustee shall be liable for any delay in
the delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and

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<PAGE>

performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided.

                  (b) No transfer of any Class IO Certificate, Class PO
Certificate, Subordinate Certificate or Class R Certificate (the "Private
Certificates") shall be made unless that transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer of
a Private Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee shall require, receipt
of: (i) if such transfer is purportedly being made in reliance upon Rule 144A
under the 1933 Act, written certifications from the Certificateholder desiring
to effect the transfer and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee, the Master Servicer, in its
capacity as such, or the Trust Fund), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither the Depositor or the Trustee is obligated to
register or qualify the Private Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a
Private Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  (c) No transfer of a Class IO Certificate, Class PO
Certificate, Subordinate Certificate or a Residual Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the DOL Regulations ("Plan Assets") unless (i) the Depositor, the
Trustee and the Master Servicer are provided with an Opinion of Counsel which
establishes to the satisfaction of the Depositor, the Trustee and the Master
Servicer that the purchase of such Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense

                                      -89-

<PAGE>

of the Depositor, the Master Servicer, the Trustee or the Trust Fund or (ii) in
the case of a Class IO Certificate or Class PO Certificate, such Certificate has
been the subject of an ERISA Qualifying Underwriting. In the case of the
Subordinate Certificates, in lieu of such Opinion of Counsel, any prospective
Transferee of such Certificates may provide a certification in the form of
Exhibit G to this Agreement (or other form acceptable to the Depositor, the
Trustee and the Master Servicer), which the Trustee may rely upon without
further inquiry or investigation. An Opinion of Counsel, any certification or a
deemed representation will not be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

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

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

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

                                    (B) In connection with any proposed Transfer
                           of any Ownership Interest in a Residual Certificate,
                           the Trustee shall require delivery to it and shall
                           not register the Transfer of any Residual Certificate
                           until its receipt of an affidavit and agreement (a
                           "Transfer Affidavit and Agreement"), in the form
                           attached hereto as Exhibit F-2, from the proposed
                           Transferee, in form and substance satisfactory to the
                           Trustee, representing and warranting, among other
                           things, that such Transferee is a Permitted
                           Transferee, that it is not acquiring its Ownership
                           Interest in the Residual Certificate that is the
                           subject of the proposed Transfer as a nominee,
                           trustee or agent for any Person that is

                                      -90-

<PAGE>

                           not a Permitted Transferee, that for so long as it
                           retains its Ownership Interest in a Residual
                           Certificate, it will endeavor to remain a Permitted
                           Transferee, and that it has reviewed the provisions
                           of this Section 5.02(d) and agrees to be bound by
                           them.

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

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

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

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

                       (iii) (A) If any purported Transferee shall become a
                  Holder of a Residual Certificate in violation of the
                  provisions of this Section 5.02(d), then the last preceding
                  Permitted Transferee shall be restored, to the extent
                  permitted by law, to all rights as holder thereof retroactive
                  to the date of registration of such Transfer of such Residual
                  Certificate. The Trustee shall be under no liability to any
                  Person for any registration of Transfer of a Residual
                  Certificate that is in fact not permitted by this Section
                  5.02(d) or for making any payments due on such Certificate to
                  the holder thereof or for taking any other action with respect
                  to such holder under the provisions of this Agreement.

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<PAGE>

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

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

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

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

                                    (B) an Opinion of Counsel, in form and
                           substance satisfactory to the Trustee, to the effect
                           that such modification of, addition to or elimination
                           of such provisions will not cause the Trust Fund to
                           cease to qualify as a REMIC and will not cause (x)
                           the Trust Fund to be subject to an entity-level tax
                           caused by the Transfer of any Residual Certificate to
                           a Person that is not

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<PAGE>

                           a Permitted Transferee or (y) a Person other than the
                           prospective transferee to be subject to a REMIC-tax
                           caused by the Transfer of a Residual Certificate to a
                           Person that is not a Permitted Transferee.

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

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing.

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

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

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

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

                  SECTION 5.04. Persons Deemed Owners.

                                      -93-

<PAGE>

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

                  SECTION 5.05. Certain Available Information.

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

                                      -94-

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

                                      -95-

<PAGE>

willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer may rely in good faith on any document of any
kind which, PRIMA FACIE, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer and
any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense to
any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor and the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, unless the Depositor or the Master Servicer acts without the consent of
Holders of Certificates entitled to at least 51% of the Voting Rights (which
consent shall not be necessary in the case of litigation or other legal action
by either to enforce their respective rights or defend themselves hereunder),
the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder) shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor (subject to
the limitations set forth above) and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

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

                                      -96-

<PAGE>

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

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

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub- Servicer's) most recent financial
statements of the parent company of the Master Servicer and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's written consent, except as required
pursuant to this Agreement or to the extent that it is appropriate to do so (i)
in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor, the Trustee or
the Trust Fund, and in either case, the Depositor or the Trustee, as the case
may be, shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer under this Agreement and may, but
is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights of
the Master Servicer under this Agreement; provided that the Master Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. The Depositor shall not
have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.

                                      -97-

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

                  "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                         (i) any failure by the Master Servicer to remit to the
                  Trustee for distribution to the Certificateholders any payment
                  (other than a P&I Advance required to be made from its own
                  funds on any Master Servicer Remittance Date pursuant to
                  Section 4.03) required to be made under the terms of the
                  Certificates and this Agreement which continues unremedied for
                  a period of one Business Day after the date upon which written
                  notice of such failure, requiring the same to be remedied,
                  shall have been given to the Master Servicer by the Depositor
                  or the Trustee (in which case notice shall be provided by
                  telecopy), or to the Master Servicer, the Depositor and the
                  Trustee by the Holders of Certificates entitled to at least
                  25% of the Voting Rights; or

                        (ii) any failure on the part of the Master Servicer duly
                  to observe or perform in any material respect any of the
                  covenants or agreements on the part of the Master Servicer
                  contained in the Certificates or in this Agreement which
                  continues unremedied for a period of 45 days after the earlier
                  of (i) the date on which written notice of such failure,
                  requiring the same to be remedied, shall have been given to
                  the Master Servicer by the Depositor or the Trustee, or to the
                  Master Servicer, the Depositor and the Trustee by the Holders
                  of Certificates entitled to at least 25% of the Voting Rights
                  and (ii) actual knowledge of such failure by a Servicing
                  Officer of the Master Servicer; or

                       (iii) a decree or order of a court or agency or
                  supervisory authority having jurisdiction in the premises in
                  an involuntary case under any present or future federal or
                  state bankruptcy, insolvency or similar law or the appointment
                  of a conservator or receiver or liquidator in any insolvency,
                  readjustment of debt, marshalling of assets and liabilities or
                  similar proceeding, or for the winding-up or liquidation of
                  its affairs, shall have been entered against the Master
                  Servicer and if such proceeding is being contested by the
                  Master Servicer in good faith such decree or order shall have
                  remained in force undischarged or unstayed for a period of 60
                  consecutive days or results in the entry of an order for
                  relief or any such adjudication or appointment; or

                        (iv) the Master Servicer shall consent to the
                  appointment of a conservator or receiver or liquidator in any
                  insolvency, readjustment of debt, marshalling of assets and
                  liabilities or similar proceedings of or relating to the
                  Master Servicer or of or relating to all or substantially all
                  of its property; or

                                      -98-

<PAGE>

                         (v) the Master Servicer shall admit in writing its
                  inability to pay its debts generally as they become due, file
                  a petition to take advantage of any applicable insolvency or
                  reorganization statute, make an assignment for the benefit of
                  its creditors, or voluntarily suspend payment of its
                  obligations; or

                        (vi) any failure of the Master Servicer to make any P&I
                  Advance on any Master Servicer Remittance Date required to be
                  made from its own funds pursuant to Section 4.03 which
                  continues unremedied for a period of one Business Day after
                  the date upon which written notice of such failure (which
                  notice the Trustee must provide by 3:00 p.m. New York time on
                  the Business Day following the Master Servicer Remittance
                  Date), requiring the same to be remedied, shall have been
                  given to the Master Servicer by the Trustee.

If a Master Servicer Event of Default described in clauses (i) through (v) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee or
to the Trustee if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as a Master Servicer under
this Agreement, to the extent permitted by law, and in and to the Mortgage Loans
and the proceeds thereof. If a Master Servicer Event of Default described in
clause (vi) hereof shall occur, the Trustee shall, by notice in writing to the
Master Servicer and the Depositor, terminate all of the rights and obligations
of the Master Servicer in its capacity as Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of
and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees, at its sole cost
and expense, promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement, and to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Trustee for administration by it of all cash amounts which at the time shall be
or should have been credited by the Master Servicer to the Collection Account
held by or on behalf of the Master Servicer, the Distribution Account or any REO
Account or Servicing Account held by or on behalf of the Master Servicer or
thereafter be received with respect to the Mortgage Loans or any REO Property
serviced by the Master Servicer (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of P&I Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.03, notwithstanding any such termination, with respect to
events occurring

                                      -99-

<PAGE>

prior to such termination). For purposes of this Section 7.01, the Trustee shall
not be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust Fund or
this Agreement.

         The Trustee shall be entitled to be reimbursed by the Master Servicer
(or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor master servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.12) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
P&I Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, the Trustee
shall be entitled to the Servicing Fees and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding the
above and subject to the next paragraph, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans, or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to the Rating Agency and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. No appointment of a successor to the
Master Servicer under this Agreement shall be effective until the assumption by
the successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such

                                      -100-

<PAGE>

arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the related Servicing Fee. Within thirty days
after any such public announcement, the Trustee, with the cooperation of the
Depositor, shall negotiate in good faith and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain such servicing. The Trustee upon receipt of the purchase
price shall pay such purchase price to the Master Servicer being so removed,
after deducting from any sum received by the Trustee from the successor to the
Master Servicer in respect of such sale, transfer and assignment all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities reasonably incurred hereunder. After
such deductions, the remainder of such sum shall be paid by the Trustee to the
Master Servicer at the time of such sale.

                  (b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such

                                      -101-

<PAGE>

advance, without interest, by withdrawing from the Distribution Account, out of
amounts on deposit therein, an amount equal to the portion of such advance
attributable to the Stayed Funds.

                  SECTION 7.03. Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

                  Subject to Section 11.09(d), the Holders representing at least
66% of the Voting Rights evidenced by all Classes of Certificates affected by
any default or Master Servicer Event of Default hereunder may waive such default
or Master Servicer Event of Default; provided, however, that a default or Master
Servicer Event of Default under clause (i) or (vi) of Section 7.01 may be waived
only by all of the Holders of the Regular Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

                                      -102-

<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to it, which are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, it shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to its satisfaction, it will provide notice thereof
to the Certificateholders.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:

                         (i) Prior to the occurrence of a Master Servicer Event
                  of Default, and after the curing of all such Master Servicer
                  Events of Default which may have occurred, the duties and
                  obligations of the Trustee shall be determined solely by the
                  express provisions of this Agreement, the Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Agreement,
                  no implied covenants or obligations shall be read into this
                  Agreement against the Trustee and, in the absence of bad faith
                  on the part of the Trustee, the Trustee may conclusively rely,
                  as to the truth of the statements and the correctness of the
                  opinions expressed therein, upon any certificates or opinions
                  furnished to the Trustee that conform to the requirements of
                  this Agreement;

                        (ii) The Trustee shall not be personally liable for any
                  error of judgment made in good faith by a Responsible Officer
                  or Responsible Officers unless it shall be proved that it was
                  negligent in ascertaining the pertinent facts;

                       (iii) The Trustee shall not be personally liable with
                  respect to any action taken, suffered or omitted to be taken
                  by it in good faith in accordance with the direction of the
                  Holders of Certificates entitled to at least 25% of the Voting
                  Rights relating to the time, method and place of conducting
                  any proceeding for any remedy

                                      -103-

<PAGE>

                  available to the it or exercising any trust or power conferred
                  upon it, under this Agreement; and

                        (iv) The Trustee shall not be required to take notice or
                  be deemed to have notice or knowledge of any default unless a
                  Responsible Officer of the Trustee shall have received written
                  notice thereof or a Responsible Officer of the Trustee shall
                  have actual knowledge thereof. In the absence of receipt of
                  such notice or actual knowledge, the Trustee may conclusively
                  assume there is no default.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a)      Except as otherwise provided in Section 8.01:

                         (i) The Trustee and any director, officer, employee or
                  agent of the Trustee may request and rely upon and shall be
                  protected in acting or refraining from acting upon any
                  resolution, Officers' Certificate, certificate of auditors or
                  any other certificate, statement, instrument, opinion, report,
                  notice, request, consent, order, appraisal, bond or other
                  paper or document reasonably believed by it to be genuine and
                  to have been signed or presented by the proper party or
                  parties;

                        (ii) The Trustee may consult with counsel and any
                  Opinion of Counsel shall be full and complete authorization
                  and protection in respect of any action taken or suffered or
                  omitted by it hereunder in good faith and in accordance with
                  such Opinion of Counsel;

                       (iii) The Trustee shall not be under any obligation to
                  exercise any of the trusts or powers vested in it by this
                  Agreement or to institute, conduct or defend any litigation
                  hereunder or in relation hereto at the request, order or
                  direction of any of the Certificateholders, pursuant to the
                  provisions of this Agreement, unless such Certificateholders
                  shall have offered to the Trustee reasonable security or
                  indemnity against the costs, expenses and liabilities which
                  may be incurred therein or thereby; nothing contained herein
                  shall, however, relieve the Trustee of the obligation, upon
                  the occurrence of a Master Servicer Event of Default (which
                  has not been cured or waived), to exercise such of the rights
                  and powers vested in it by this Agreement, and to use the same
                  degree of care and skill in their exercise as a prudent person
                  would exercise or use under the circumstances in the conduct
                  of such person's own affairs;

                        (iv) The Trustee shall not be personally liable for any
                  action taken, suffered or omitted by it in good faith and
                  believed by it to be authorized or within the discretion or
                  rights or powers conferred upon it by this Agreement;

                         (v) Prior to the occurrence of a Master Servicer Event
                  of Default hereunder and after the curing of all Master
                  Servicer Events of Default which may have occurred, the
                  Trustee shall not be bound to make any investigation into the
                  facts or matters stated in any resolution, certificate,
                  statement, instrument, opinion,
                  report,

                                      -104-

<PAGE>

                  notice, request, consent, order, approval, bond or other paper
                  or document, unless requested in writing to do so by the
                  Holders of Certificates entitled to at least 25% of the Voting
                  Rights; provided, however, that if the payment within a
                  reasonable time to the Trustee of the costs, expenses or
                  liabilities likely to be incurred by it in the making of such
                  investigation is, in the opinion of the Trustee not reasonably
                  assured to the Trustee by such Certificateholders, the Trustee
                  may require reasonable indemnity against such cost, expense,
                  or liability from such Certificateholders as a condition to
                  taking any such action;

                        (vi) The Trustee may execute any of the trusts or powers
                  hereunder or perform any duties hereunder either directly or
                  by or through agents or attorneys;

                       (vii) The Trustee shall not be personally liable for any
                  loss resulting from the investment of funds held in the
                  Collection Account at the direction of the Master Servicer
                  pursuant to Section 3.12; and

                      (viii) Any request or direction of the Depositor, the
                  Master Servicer or the Certificateholders mentioned herein
                  shall be sufficiently evidenced in writing.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

                  SECTION 8.03. Trustee not Liable for Certificates or Mortgage
                                Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.12) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 8.12) or of the Certificates (other than the signature of the Trustee
and authentication of the Trustee on the Certificates) or of any Mortgage Loan
or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer, other than
any funds held by or on behalf of the Trustee in accordance with Section 3.10.

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                                      -105-

<PAGE>

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
including the compensation and the expenses and disbursements of its agents and
counsel, in the ordinary course of the Trustee's performance in accordance with
the provisions of this Agreement) incurred by the Trustee in connection with any
claim or legal action or any pending or threatened claim or legal action arising
out of or in connection with the acceptance or administration of its obligations
and duties under this Agreement, other than any loss, liability or expense (i)
resulting from any breach of the Master Servicer's obligations in connection
with this Agreement and the Mortgage Loans, (ii) that constitutes a specific
liability of the Trustee pursuant to Section 10.01(c) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or as a result of a breach of the
Trustee's obligations under Article X hereof.
Any amounts payable to the Trustee, or any director, officer, employee or agent
of the Trustee in respect of the indemnification provided by this paragraph (a),
or pursuant to any other right of reimbursement from the Trust Fund that the
Trustee or any director, officer, employee or agent of the Trustee may have
hereunder in its capacity as such, may be withdrawn by the Trustee from the
Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment under this Section
8.05(b) made by the Master Servicer to the Trustee shall be from the Master
Servicer's own funds, without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of S&P and Fitch for ongoing surveillance from its own funds without right
of reimbursement.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                                      -106-

<PAGE>

                  SECTION 8.07. Resignation and Removal of the Trustee.

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

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed, and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee and the Master Servicer by the
Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and the Trustee, and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder and the Depositor and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for

                                      -107-

<PAGE>

more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by the Rating Agency, as evidenced by a letter from the Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee

                                      -108-

<PAGE>

or co-trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed by the
Trustee (whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11. [intentionally omitted]

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will appoint an office or agency in the City of
Minneapolis, Minnesota where the Certificates may be surrendered for
registration of transfer or exchange, and presented for final distribution, and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served.

                  SECTION 8.13. Representations and Warranties.

                  The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is duly organized, validly existing and in good
         standing under the laws of the United States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its articles of association or bylaws or constitute a
         default (or an event which, with notice or lapse of time, or both,

                                      -109-

<PAGE>

         would constitute a default) under, or result in the breach of, any
         material agreement or other instrument to which it is a party or which
         is applicable to it or any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

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

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of the it to
         perform its obligations under this Agreement or the financial condition
         of it.

                  (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or the financial condition
         of it.

                                     -110-

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01 Termination Upon Repurchase or Liquidation of the
                               Trust Fund.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee with respect to the Mortgage Loans (other than the obligations of
the Master Servicer to the Trustee pursuant to Section 8.05 and of the Master
Servicer to provide for and the Trustee to make payments to the Holders of the
related Class(es) of Certificates as hereinafter set forth) shall terminate upon
payment to the Certificateholders and the deposit of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Master Servicer of all Mortgage Loans and each REO Property
remaining in the Trust Fund and (ii) the final payment or other liquidation (or
any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof. The
purchase by the Master Servicer of all Mortgage Loans and each REO Property
remaining in the Trust Fund shall be at a price (the "Termination Price") equal
to the greater of (A) the aggregate Purchase Price of all the Mortgage Loans
included in the Trust Fund, plus the appraised value of each REO Property, if
any, included in the Trust Fund, such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee in their reasonable
discretion and (B) the aggregate fair market value of all of the assets in the
Trust Fund (as determined by the Master Servicer, with the consent of the
Trustee, as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01).

                  (b) The Master Servicer shall have the right to purchase all
of the Mortgage Loans and each REO Property remaining in the Trust Fund pursuant
to clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Master Servicer, as provided above,
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in the Trust Fund pursuant to clause (i) above only if the aggregate Stated
Principal Balance of the Mortgage Loans and each REO Property remaining in the
Trust Fund at the time of such election is reduced to less than 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut- off Date.
For federal income tax purposes, the purchase by the Master Servicer of all
Mortgage Loans and all REO Properties underlying the Regular Interests is
intended to facilitate a redemption of such Regular Interests pursuant to a
"cleanup call" within the meaning of Treasury regulation section 1.860G-2(j).
Notwithstanding the foregoing, the Master Servicer shall have the right to
transfer, sell or assign its rights to purchase all of the Mortgage Loans and
each REO Property remaining in the Trust Fund.

                                      -111-

<PAGE>

                  (c) Notice of the liquidation of the Regular Interests shall
be given promptly by the Trustee by letter to Certificateholders mailed (a) in
the event such notice is given in connection with the purchase of the Mortgage
Loans and each REO Property remaining in the Trust Fund by the Master Servicer,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and final payment of the
Certificates will be made upon presentation and surrender of the Certificates at
the office of the Trustee therein designated, (ii) the amount of any such final
payment, (iii) that no interest shall accrue in respect of the Certificates from
and after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Trustee. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in the Trust Fund by the Master Servicer, the Master Servicer
shall deliver to the Trustee for deposit in the Distribution Account not later
than the related Master Servicer Remittance Date of the month in which such
distribution will be made an amount in immediately available funds equal to the
Termination Price. Upon certification to the Trustee by a Servicing Officer of
the making of such final deposit, the Trustee shall promptly release or cause to
be released to the Master Servicer the Mortgage Files for the remaining Mortgage
Loans, and the Trustee shall execute all assignments, endorsements and other
instruments necessary to effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Salomon Smith Barney
Inc. all such amounts, and all rights of non-tendering Certificateholders in or
to such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 9.01.

                                      -112-

<PAGE>

                  Immediately following the deposit of funds in trust hereunder
in respect of the Regular Interests, the Trust Fund shall terminate.

                  SECTION 9.02 Additional Termination Requirements.

                  (a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property, the Trust Fund shall be terminated in
accordance with the following additional requirements (or in connection with the
final payment on or other liquidation of the last Mortgage Loan or REO Property
remaining in the Trust Fund, the additional requirement specified in clause (i)
below):

                         (i) The Trustee shall specify the first day in the
                  90-day liquidation period in a statement attached to the Trust
                  Fund's final Tax Return pursuant to Treasury regulation
                  Section 1.860F-1, and such termination shall satisfy all
                  requirements of a qualified liquidation under Section 860F of
                  the Code and any regulations thereunder, as evidenced by an
                  Opinion of Counsel obtained at the expense of the Master
                  Servicer;

                        (ii) During such 90-day liquidation period, and at or
                  prior to the time of making of the final payment on the
                  Certificates, the Trustee shall sell all of the assets of the
                  Trust Fund to the Master Servicer for cash; and

                       (iii) At the time of the making of the final payment on
                  the Certificates, the Trustee shall distribute or credit, or
                  cause to be distributed or credited, to the Holders of the
                  applicable Class of Residual Certificates all cash on hand in
                  the Trust Fund (other than cash retained to meet claims), and
                  the Trust Fund shall terminate at that time.

                  (b) At the expense of the Master Servicer (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of the Trust Fund pursuant
to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.

                                      -113-

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat the Trust Fund as a REMIC
under the Code and, if necessary, under applicable state law. Such election
shall be made by the Trustee on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC election in respect of the Trust Fund, the Senior
Certificates and the Subordinate Certificates shall be designated as the Regular
Interests in the REMIC and the Class R Certificates shall be designated as the
Residual Interests in the REMIC. The Trustee shall not permit the creation of
any "interests" in the REMIC (within the meaning of Section 860G of the Code)
other than the interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of the REMIC contained in the Trust Fund within the meaning of Section
860G(a)(9) of the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to the Trust Fund that
involve the Internal Revenue Service or state tax authorities), other than the
expense of obtaining any tax related Opinion of Counsel as specified herein. The
Trustee, as agent for the Trust Fund's tax matters person, shall (i) act on
behalf of the Trust Fund in relation to any tax matter or controversy involving
the Trust Fund and (ii) represent the Trust Fund in any administrative or
judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. The holder of the largest Percentage
Interest of the Residual Certificates shall be designated, in the manner
provided under Treasury regulations section 1.860F-4(d) and Treasury regulations
section 301.6231(a)(7)-1, as the tax matters person of the REMIC created
hereunder. By its acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of the Trust Fund created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee without any
right of reimbursement therefor. The Master Servicer shall provide on a timely
basis to the Trustee or its designee such information with respect to the assets
of the Trust Fund as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this Article.

                  (e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other

                                      -114-

<PAGE>

such compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of the Trust Fund. The Master Servicer shall provide
on a timely basis to the Trustee such information with respect to the assets of
the Trust Fund, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Master Servicer and the Trustee shall take such action
and shall cause each REMIC created hereunder to take such action as shall be
necessary to create or maintain the status thereof as a REMIC under the REMIC
Provisions. The Master Servicer and the Trustee shall not take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of the Trust Fund as a REMIC or (ii)
result in the imposition of a tax upon the Trust Fund (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, an "Adverse REMIC Event") unless the Trustee has
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee,
to the extent the Trustee is taking such action on behalf of the
Certificateholders) to the effect that the contemplated action will not, with
respect to the Trust Fund, endanger such status or result in the imposition of
such a tax, nor shall the Master Servicer take or fail to take any action
(whether or not authorized hereunder) as to which the Trustee has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to the Trust Fund or the respective assets of
each, or causing the Trust Fund to take any action, which is not contemplated
under the terms of this Agreement, the Master Servicer will consult with the
Trustee or its designee, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to the Trust Fund, and the
Master Servicer shall not take any such action or cause the Trust Fund to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee (to the extent the Trustee is taking such action on
behalf of the Certificateholders). At all times as may be required by the Code,
the Trustee will ensure that substantially all of the assets of the Trust Fund
will consist of "qualified mortgages" as defined in Section 860G(a)(3) of the
Code and "permitted investments" as defined in Section 860G(a)(5) of the Code.

                                      -115-

<PAGE>

                  (g) In the event that any tax is imposed on "prohibited
transactions" of the REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of the REMIC as defined
in Section 860G(c) of the Code, on any contributions to the REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) On or before April 15 of each calendar year, commencing
April 15, 2001, the Trustee shall deliver to the Master Servicer and the Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X (without regard to the actions of any
Person other than the Trustee) .

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to the Trust Fund on a calendar year and
on an accrual basis. The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via Form SS-4 or such other form as is
appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to the Trust Fund other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject the REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which the Trust Fund will receive a fee or other
compensation for services nor permit the REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of the Trust Fund pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for the Trust Fund (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to the Trust Fund after the Closing Date (other than a Qualified

                                      -116-

<PAGE>

Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee, to the extent the
Trustee is taking such action on behalf of the Certificateholders) that such
sale, disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of the Trust Fund as a REMIC or (b) cause the Trust Fund to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.

                  SECTION 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer as a result of a breach of the
Trustee's covenants set forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X.

                                      -117-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                   This Agreement may be amended from time to time by the
Depositor, the Master Service and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders) or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner, other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on the Trust Fund pursuant to the REMIC
Provisions or cause the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the

                                      -118-

<PAGE>

authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee, to
the extent the Trustee is taking such action on behalf of the
Certificateholders.

                  Notwithstanding the foregoing, the Trustee may, but shall not
be obligated to, enter into any amendment pursuant to this Section that affects
its rights, duties and immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this

                                      -119-

<PAGE>

Agreement, unless (i) such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and (ii) the Holders of Certificates entitled to at least 25% of the
Voting Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 15 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatsoever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section, each and every Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

                  SECTION 11.04. Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

                  SECTION 11.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 390 Greenwich Street, New York, New York 10013,
Attention: Mortgage Finance Group (telecopy number (212) 723-8604), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer and the Trustee in writing by the Depositor, (b) in the case of the
Master Servicer, Union Planters PMAC, Inc., 215 Forrest Street, Hattiesburg,
Mississippi 39401-3476 Attention: Morgan McCarty (telecopy number (601) 583-
7100), or such other address or telecopy number as may hereafter be furnished to
the Trustee and the Depositor in writing by the Master Servicer, and (c) in the
case of the Trustee, Wells Fargo Bank Minnesota, N.A., 11000 Broken Land
Parkway, Columbia, Maryland 21044, Attention: Union Planters Mortgage
Pass-Through Certificates, Series 2000-UP1 (telecopy number (410) 884-2360),
with a copy to Wells Fargo Bank Minnesota, N.A., Sixth and Marquette,
Minneapolis, Minnesota 55479, Attention: Union Planters Mortgage Pass-Through
Certificates, Series 2000-UP1 (telecopy number (612) 667-3539), or such other
address or telecopy number as may hereafter be furnished to the Master Servicer
and the Depositor in writing by the Trustee. Any notice required or permitted to
be given to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or

                                      -120-

<PAGE>

not the Certificateholder receives such notice. A copy of any notice required to
be telecopied hereunder also shall be mailed to the appropriate party in the
manner set forth above.

                  SECTION 11.06. Severability of Provisions.

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

                  SECTION 11.07. Notice to Rating Agency.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agency with respect to each of the following of which it
has actual knowledge:

                  1.       Any material change or amendment to this Agreement;

                  2.       The occurrence of any Master Servicer Event of
                           Default that has not been cured or waived;

                  3.       The resignation or termination of the Master Servicer
                           or the Trustee;

                  4.       The repurchase or substitution of Mortgage Loans
                           pursuant to or as contemplated by Section 2.03;

                  5.       The final payment to the Holders of any Class of
                           Certificates;

                  6.       Any change in the location of the Collection Account
                           or the Distribution Account;

                  7.       Any event that would result in the inability of the
                           Trustee, were it to succeed as Master Servicer, to
                           make advances regarding delinquent Mortgage Loans;
                           and

                  8.       The filing of any claim under the Master Servicer's
                           blanket bond and errors and omissions insurance
                           policy required by Section 3.14 or the cancellation
                           or material modification of coverage under any such
                           instrument.

                  In addition, the Trustee shall promptly furnish to the Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer, as required pursuant to Section 3.20 and Section 3.21,
shall promptly furnish to the Rating Agency copies of the following:

                  1.       Each annual statement as to compliance described in
                           Section 3.20; and

                                      -121-

<PAGE>

                  2.       Each annual independent public accountants' servicing
                           report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's Ratings Services, 55 Water Street, 41st Floor, New York, NY
10041, Attention: Residential Mortgage Surveillance Group. and Fitch, Inc., One
State Street Plaza, New York, New York 10004, or such other addresses as each
such Rating Agency may designate in writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Depositor,
then, (a) it is the express intent of the parties that such conveyance be deemed
a pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt
or other obligation of the Depositor and (b)(1) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York;
(2) the conveyance provided for in Section 2.01 hereof shall be deemed to be a
grant by the Depositor to the Trustee of a security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute

                                      -122-

<PAGE>

and unconditional sale of the Mortgage Loans and assets constituting the Trust
Fund by the Depositor to the Trustee.

                                      -123-

<PAGE>

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

                                     SALOMON BROTHERS MORTGAGE
                                     SECURITIES VII, INC.,
                                     as Depositor

                                     By:               /s/Matthew R. Bollo
                                                       -------------------
                                     Name:             Matthew R. Bollo
                                     Title:            Assistant Vice President

                                     UNION PLANTERS PMAC, INC.,
                                     as Master Servicer

                                     By:               /s/Morgan McCarty
                                     Name:             Morgan McCarty
                                     Title:            President

                                     WELLS FARGO BANK MINNESOTA,
                                     NATIONAL
                                     ASSOCIATION,
                                     as Trustee

                                     By:               /s/Peter A. Gobell
                                                       ------------------
                                     Name:             Peter A. Gobell
                                     Title:            Assistant Vice President

<PAGE>

STATE OF NEW YORK  )
                   ) ss.:
COUNTY OF NEW YORK )

                  On the ____ day of August 2000, before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                 Notary Public

[Notarial Seal]

<PAGE>

STATE OF ______________    )
                           ) ss.:
COUNTY OF ___________      )

                  On the ____ day of August 2000, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
________________ of Union Planters PMAC, Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             Notary Public

[Notarial Seal]

<PAGE>

STATE OF ____________   )
                        ) ss.:
COUNTY OF ___________   )

                  On the ____ day of August 2000, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
_______________ of Wells Fargo Bank Minnesota, National Association, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                               Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                          FORM OF CLASS A-1 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

Series 2000-UP1, Class A-1            Aggregate Certificate Principal Balance
                                      of Class A-1 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date:  $_____________

Date of Agreement and Cut-off Date:   Denomination:  $___________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. __
                                      Issue Date: August 30, 2000

                                      CUSIP: 79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -2-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon the
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose as provided in the Agreement.

<PAGE>

                                       -3-

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

<PAGE>

                                       -4-

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

                                       -5-

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-2
                               -----------

                      FORM OF CLASS A-2 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

Series 2000-UP1, Class A-2             Aggregate Certificate Principal Balance
                                       of Class A-2 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum     Date: $__________

Date of Agreement and Cut-off Date:    Denomination:  $___________
August 1, 2000
                                       Master Servicer:  Union Planters PMAC,
First Distribution Date:               Inc.
September 25, 2000
                                       Trustee:  Wells Fargo Bank Minnesota,
No. __                                 National Association

                                       Issue Date: August 30, 2000

                                       CUSIP: 79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -2-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -3-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

<PAGE>

                                       -4-

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-3
                               -----------

                       FORM OF CLASS IO CERTIFICATE

     SOLELY  FOR U.S.  FEDERAL  INCOME  TAX  PURPOSES,  THIS  CERTIFICATE
     REPRESENTS  A  "REGULAR   INTEREST"  IN  A  "REAL  ESTATE   MORTGAGE
     INVESTMENT CONDUIT",  AS THOSE TERMS ARE DEFINED,  RESPECTIVELY,  IN
     SECTIONS  860G AND 860D OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
     AMENDED (THE "CODE").

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

Series 2000-UP1, Class IO             Aggregate Notional Amount of Class IO
                                      Certificates as of the Issue Date:
Pass-Through Rate:  Variable          $____________

Date of Agreement and Cut-off Date:   Notional Amount of this Class IO
August 1, 2000                        Certificate:  $______________

First Distribution Date:              Master Servicer: Union Planters PMAC, Inc.
September 25, 2000
                                      Trustee:  Wells Fargo Bank Minnesota,
No. __                                National Association

                                      Issue Date:  August 30, 2000

                                      CUSIP:  79548K

<PAGE>

                                   -2-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  TRUSTEE OR ANY OF THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS
     CERTIFICATE NOR THE UNDERLYING  MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Notional Amount of this
Certificate by the aggregate Notional Amount of the Class IO Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class IO Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class IO Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -3-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -4-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the party designated in the Agreement at a price determined
as provided in the Agreement from the REMIC of all the Mortgage Loans and each
REO Property remaining therein, and (ii) the final payment (or any advance with
respect thereto) on or other liquidation of the last Mortgage Loan or REO
Property remaining in the REMIC. The Agreement permits, but does not require,
the party designated in the Agreement to purchase from the REMIC all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to

<PAGE>

                                       -5-

purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 5% of the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-4
                               -----------

                       FORM OF CLASS PO CERTIFICATE

     SOLELY  FOR U.S.  FEDERAL  INCOME  TAX  PURPOSES,  THIS  CERTIFICATE
     REPRESENTS  A  "REGULAR   INTEREST"  IN  A  "REAL  ESTATE   MORTGAGE
     INVESTMENT CONDUIT",  AS THOSE TERMS ARE DEFINED,  RESPECTIVELY,  IN
     SECTIONS  860G AND 860D OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
     AMENDED (THE "CODE").

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

                                   -2-

Series 2000-UP1, Class PO             Aggregate Certificate Principal Balance
                                      of Class PO Certificates as of the Issue
Pass-Through Rate: 0.00% per annum    Date: $__________

Date of Agreement and Cut-off Date:   Denomination:  $___________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. __

                                      Issue Date:  August 30, 2000

                                      CUSIP:  79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class PO Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class PO Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class PO Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-5
                               -----------

                      FORM OF CLASS B-1 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE IS SUBORDINATE TO THE SENIOR  CERTIFICATES  TO THE
     EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-1            Aggregate Certificate Principal Balance
                                      of Class B-1 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $__________

Date of Agreement and Cut-off Date:   Denomination:  $____________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. __
                                      Issue Date:  August 30, 2000

                                      CUSIP: 79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-1 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK, MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-1 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-6
                               -----------

                      FORM OF CLASS B-2 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE IS SUBORDINATE TO THE SENIOR  CERTIFICATES AND THE
     CLASS B-1  CERTIFICATES  TO THE EXTENT  DESCRIBED  IN THE  AGREEMENT
     REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-2            Aggregate Certificate Principal Balance
                                      of Class B-2  Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $___________

Date of Agreement and Cut-off Date:   Denomination:  $___________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. __
                                      Issue Date:  August 30, 2000

                                      CUSIP: 79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-2 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-2 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-7
                               -----------

                      FORM OF CLASS B-3 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE  IS SUBORDINATE  TO THE SENIOR  CERTIFICATES,  THE
     CLASS B-1 CERTIFICATES AND THE CLASS B- 2 CERTIFICATES TO THE EXTENT
     DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-3            Aggregate Certificate Principal Balance
                                      of Class B-3 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $__________

Date of Agreement and Cut-off         Denomination:  $__________
Date:  August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. __
                                      Issue Date:  August 30, 2000

                                      CUSIP: 79548K

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-3 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 30, 2000

                                      WELLS FARGO BANK MINNESOTA
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-3 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-8
                               -----------

                      FORM OF CLASS B-4 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE  IS SUBORDINATE  TO THE SENIOR  CERTIFICATES,  THE
     CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES AND THE CLASS B-3
     CERTIFICATES  TO THE EXTENT  DESCRIBED IN THE AGREEMENT  REFERRED TO
     HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-4            Aggregate Certificate Principal Balance
                                      of Class B-4 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $_____________

Date of Agreement and Cut-off Date:   Denomination:  $__________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. 1
                                      Issue Date:  August 30, 2000

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-4 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-4 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-9
                               -----------

                      FORM OF CLASS B-5 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE  IS SUBORDINATE  TO THE SENIOR  CERTIFICATES,  THE
     CLASS B-1 CERTIFICATES,  THE CLASS B-2  CERTIFICATES,  THE CLASS B-3
     CERTIFICATES AND THE CLASS B- 4 CERTIFICATES TO THE EXTENT DESCRIBED
     IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-5            Aggregate Certificate Principal Balance
                                      of Class B-5 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $__________

Date of Agreement and Cut-off Date:   Denomination:  $__________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. 1
                                      Issue Date:  August 30, 2000

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-5 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-5 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-5 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-10
                               ------------

                      FORM OF CLASS B-6 CERTIFICATE

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT  CONDUIT",
     AS THOSE TERMS ARE DEFINED,  RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

     THIS  CERTIFICATE  IS SUBORDINATE  TO THE SENIOR  CERTIFICATES,  THE
     CLASS B-1 CERTIFICATES,  THE CLASS B-2  CERTIFICATES,  THE CLASS B-3
     CERTIFICATES, THE CLASS B-4 CERTIFICATES AND THE B-5 CERTIFICATES TO
     THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

<PAGE>

Series 2000-UP1, Class B-6            Aggregate Certificate Principal Balance
                                      of Class B-6 Certificates as of the Issue
Pass-Through Rate: 8.00% per annum    Date: $__________

Date of Agreement and Cut-off Date:   Denomination:  $__________
August 1, 2000
                                      Master Servicer: Union Planters PMAC, Inc.
First Distribution Date:
September 25, 2000                    Trustee:  Wells Fargo Bank Minnesota,
                                      National Association
No. 1
                                      Issue Date:  August 30, 2000

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE  PRINCIPAL  BALANCE OF
     THIS   CERTIFICATE   MAY  BE  MADE  MONTHLY  AS  SET  FORTH  HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
     ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
     OF THIS CERTIFICATE.

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-6 Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-6 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution

<PAGE>

                                       -4-

and only upon the presentation and surrender of this Certificate at the office
or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Union Planters Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933

<PAGE>

                                       -5-

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Trustee
shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the REMIC, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the REMIC of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the REMIC all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however,

<PAGE>

                                       -6-

such right to purchase is subject to the aggregate Stated Principal Balance of
the Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                       NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

          This is one of the Class B-6 Certificates referred to in the
within-mentioned Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                               EXHIBIT A-11
                               ------------

                       FORM OF CLASS R CERTIFICATE

     THIS  CERTIFICATE  MAY NOT BE  TRANSFERRED  TO A  NON-UNITED  STATES
     PERSON.

     SOLELY FOR U.S.  FEDERAL INCOME TAX PURPOSES,  THIS CERTIFICATE IS A
     "RESIDUAL  INTEREST" IN A "REAL ESTATE MORTGAGE  INVESTMENT CONDUIT"
     ("REMIC"),  AS THOSE TERMS ARE  DEFINED,  RESPECTIVELY,  IN SECTIONS
     860G AND 860D OF THE INTERNAL  REVENUE CODE OF 1986, AS AMENDED (THE
     "CODE").

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IN ACCORDANCE  WITH THE  PROVISIONS OF SECTION 5.02 OF THE
     AGREEMENT REFERRED TO HEREIN.

     THIS  CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR  TRANSFERRED  UNLESS IT IS REGISTERED
     PURSUANT  TO  SUCH  ACT  AND  LAWS  OR IS  SOLD  OR  TRANSFERRED  IN
     TRANSACTIONS  THAT ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A  "PLAN")  SUBJECT  TO THE  EMPLOYEE
     RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
     CODE WILL BE  REGISTERED  EXCEPT IN COMPLIANCE  WITH THE  PROCEDURES
     DESCRIBED HEREIN.

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IF THE  PROPOSED  TRANSFEREE  PROVIDES (I) AN AFFIDAVIT TO
     THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
     ANY POSSESSION THEREOF, ANY STATE OR POLITICAL  SUBDIVISION THEREOF,
     ANY  FOREIGN  GOVERNMENT,  ANY  INTERNATIONAL  ORGANIZATION,  OR ANY
     AGENCY  OR  INSTRUMENTALITY  OF  ANY  OF  THE  FOREGOING,   (2)  ANY
     ORGANIZATION  (OTHER THAN A COOPERATIVE  DESCRIBED IN SECTION 521 OF
     THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE

<PAGE>

                                   -2-

     CODE  UNLESS  SUCH  ORGANIZATION  IS SUBJECT  TO THE TAX  IMPOSED BY
     SECTION 511 OF THE CODE, (3) ANY  ORGANIZATION  DESCRIBED IN SECTION
     1381(A)(2)(C)  OF  THE  CODE  (ANY  SUCH  PERSON  DESCRIBED  IN  THE
     FOREGOING  CLAUSES (1), (2) OR (3) SHALL  HEREINAFTER BE REFERRED TO
     AS A "DISQUALIFIED  ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
     ORGANIZATION  AND (B) NO PURPOSE OF SUCH  TRANSFER  IS TO IMPEDE THE
     ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE  SATISFIES
     CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
     THE PROPOSED  TRANSFEREE.  NOTWITHSTANDING  THE  REGISTRATION IN THE
     CERTIFICATE  REGISTER OF ANY TRANSFER,  SALE OR OTHER DISPOSITION OF
     THIS  CERTIFICATE  TO A DISQUALIFIED  ORGANIZATION  OR AN AGENT OF A
     DISQUALIFIED  ORGANIZATION,  SUCH REGISTRATION SHALL BE DEEMED TO BE
     OF NO LEGAL FORCE OR EFFECT  WHATSOEVER AND SUCH PERSON SHALL NOT BE
     DEEMED  TO  BE  A  CERTIFICATEHOLDER   FOR  ANY  PURPOSE  HEREUNDER,
     INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
     CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE  HEREOF
     SHALL  BE  DEEMED  TO  HAVE  CONSENTED  TO THE  PROVISIONS  OF  THIS
     PARAGRAPH  AND THE  PROVISIONS  OF SECTION  5.02(D) OF THE AGREEMENT
     REFERRED TO HEREIN.  ANY PERSON THAT IS A DISQUALIFIED  ORGANIZATION
     IS  PROHIBITED   FROM   ACQUIRING   BENEFICIAL   OWNERSHIP  OF  THIS
     CERTIFICATE.

Series 2000-UP1, Class R             Aggregate Percentage Interest of Class R
                                     Certificates as of the Issue Date:  100.00%
Date of Agreement and Cut-off Date:
August 1, 2000                       Master Servicer: Union Planters PMAC, Inc.

First Distribution Date:             Trustee:  Wells Fargo Bank Minnesota,
September 25, 2000                   National Association

No. 1                                Issue Date:  August 30, 2000

<PAGE>

                                   -3-

             UNION PLANTERS MORTGAGE PASS-THROUGH CERTIFICATE
                             SERIES 2000-UP1

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

              SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

     THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
     THE  MORTGAGE  LOAN SELLER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES.  NEITHER THIS  CERTIFICATE  NOR THE UNDERLYING  MORTGAGE
     LOANS ARE GUARANTEED BY ANY AGENCY OR  INSTRUMENTALITY OF THE UNITED
     STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in the REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement. All distributions to the Holder of this
Certificate under the Agreement will be made or caused to be made by or on
behalf of the Trustee by wire transfer in immediately available funds to the
account of the Person entitled thereto if such Person shall have so notified the
Trustee in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender

<PAGE>

                                       -4-

of this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is

<PAGE>

                                       -5-

made in a transaction that does not require such registration or qualification.
In the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.

<PAGE>

                                       -6-

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

          The Depositor, the Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the Trust Fund, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the Trust Fund of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all the Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining therein at a price determined as
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor, and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  August __, 2000

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:___________________________________
                                               Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  - as tenants in common              UNIF GIFT MIN ACT -   Custodian
                                                                ---------------
                                                                (Cust)   (Minor)
TEN ENT  - as tenants by the entireties                  under Uniform Gifts
                                                              to Minors Act
JT TEN   - as joint tenants with right                   _________________
           of survivorship and not as                          (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
_______________________________________________________________________________.

Dated:

                                      _____________________________________
                                      Signature by or on behalf of assignor

                                      _____________________________________
                                      Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

         The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________, for the
account of ________________________________ , account number __________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.

     This information is provided by ______________________________________, the
assignee named above, or ___________________________ , as its agent.

<PAGE>

                                    EXHIBIT B
                                    ---------

                                   [RESERVED]

<PAGE>

                                   EXHIBIT C-1
                                   -----------

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                            [Date]

Salomon Brothers Mortgage                   Union Planters PMAC, Inc.
Securities VII, Inc.                        215 Forrest Street
390 Greenwich Street                        Hattiesburg, Mississippi 39401-3476
New York, New York  10013

        Re:  Pooling and Servicing Agreement, dated as of August 1, 2000,
             among Salomon Brothers Mortgage Securities VII, Inc. as Depositor
             Union Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
             Minnesota, National Association as Trustee, Union Planters
             Mortgage Pass-Through Certificates, Series 2000-UP1
             -----------------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or specifically identified in the exception report annexed
hereto), (i) subject to the next sentence, all documents required to be
delivered to it pursuant Section 2.01 of the Pooling and Servicing Agreement are
in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based
on its examination and only as to the foregoing, the information set forth in
the Mortgage Loan Schedule that corresponds to items (i), (ii), (iii) and (xiv)
of the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. With respect to any document required to be delivered pursuant to
clauses (vi), (viii) (to the extent not part of the original policy) and (ix),
we have not determined whether such documents should be contained in each
Mortgage File, but if such documents are contained in the Mortgage File, they
relate to the Mortgage Loan; and with respect to any document required to be
delivered pursuant to clause (vii), we have, with your permission, relied on a
schedule of Mortgage Loans received from or on behalf of the Seller.

<PAGE>

     The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION

                                      By:__________________________
                                      Name:
                                      Title:

<PAGE>

                                   EXHIBIT C-2
                                   -----------

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                         [Date]

Salomon Brothers Mortgage                Union Planters PMAC, Inc.
Securities VII, Inc.                     215 Forrest Street
390 Greenwich Street                     Hattiesburg, Mississippi 39401-3476
New York, New York  10013

       Re:  Pooling and Servicing Agreement, dated as of August 1, 2000,
            among Salomon Brothers Mortgage Securities VII, Inc. as Depositor
            Union Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
            Minnesota, National Association as Trustee, Union Planters
            Mortgage Pass-Through Certificates, Series 2000-UP1
            -----------------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage loan paid in full or
listed on Schedule I hereto) it has received the applicable documents listed in
Section 2.01 of the Pooling and Servicing Agreement.

     The undersigned hereby certifies that, subject to the next sentence, as to
each Mortgage Loan identified on the Mortgage Loan Schedule, other than any
Mortgage Loan listed on Schedule I hereto, it has reviewed the documents listed
above and has determined that each such document appears to be complete and,
based on an examination of such documents, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i), (ii), (iii) and (xiv) of
the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. With respect to any document required to be delivered pursuant to
clauses (vi), (viii) (to the extent not part of the original policy) and (ix),
we have not determined whether such documents should be contained in each
Mortgage File, but if such documents are contained in the Mortgage File, they
relate to the Mortgage Loan; and with respect to any document required to be
delivered pursuant to clause (vii), we have, with your permission, relied on a
schedule of Mortgage Loans received from or on behalf of the Seller.

<PAGE>

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION

                                      By:___________________________
                                      Name:
                                      Title:

<PAGE>

                                   EXHIBIT C-3
                                   -----------

                    FORM OF TRUSTEE RECEIPT OF MORTGAGE NOTES

                                             [Date]

Salomon Brothers Mortgage                    Union Planters PMAC, Inc.
Securities VII, Inc.                         215 Forrest Street
390 Greenwich Street                         Hattiesburg, Mississippi 39401-3476
New York, New York  10013

      Re:  Pooling and Servicing Agreement, dated as of August 1, 2000,
           among Salomon Brothers Mortgage Securities VII, Inc. as Depositor
           Union Planters PMAC, Inc. as Master Serivcer and Wells Fargo Bank
           Minnesota, National Association as Trustee, Union Planters
           Mortgage Pass-Through Certificates, Series 2000-UP1
           -----------------------------------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, we hereby
acknowledge the receipt of the original Mortgage Notes with any exceptions
thereto listed on Exhibit 1.

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION

                                      By:_________________________
                                      Name:
                                      Title:

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated August 28, 2000, between Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser") and Union Planters Bank, National
Association, a national banking association (the "Seller").

                              Preliminary Statement
                              ---------------------

                  The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser intends to deposit the Mortgage Loans into a
mortgage pool comprising the trust fund. The trust fund will be evidenced by a
single series of mortgage pass-through certificates designated as Series
2000-UP1 (the "Certificates"). The Certificates will consist of eleven classes
of certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of August 1, 2000 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, Union Planters PMAC, Inc. as
master servicer (the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before August 30, 2000 (the "Closing
Date"), certain fixed-rate, conventional residential mortgage loans (the
"Mortgage Loans"), having an aggregate principal balance as of the close of
business on August 1, 2000 (the "Cut-off Date") of approximately $579,896,109
(the "Closing Balance"), after giving effect to all payments due on the Mortgage
Loans on or before the Cut-off Date, whether or not received.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that together shall describe such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement. The
Closing Schedule will conform to the requirements set forth in this Agreement
and to the definition of "Mortgage Loan Schedule" under the Pooling and
Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net sale proceeds of the Class A Certificates
(which amount is net of fees and expenses of Salomon Smith Barney, Inc.), plus
accrued interest and (ii) deliver to the Seller the Subordinate Certificates,
the Class IO Certificates, the Class PO Certificates and the Class R
Certificates (the "Union Planters Certificates").

<PAGE>

                                       -2-

                           (b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Cut-off Date, all other payments of principal due and
collected after the Cut-off Date, and all payments of interest on the Mortgage
Loans allocable to the period after the Cut-off Date. All scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date shall belong to the Seller.

                           (c) Pursuant to the Pooling and Servicing Agreement,
the Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the related Certificateholders.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell, transfer, assign, set over and convey to the Purchaser, without
recourse but subject to the terms of this Agreement, all of its right, title and
interest in, to and under the Mortgage Loans. The contents of each Mortgage File
not delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. In
connection with such transfer and assignment, the Seller does hereby deliver to,
and deposit with, the Purchaser, the following documents or instruments with
respect to each Mortgage Loan so transferred and assigned (a "Mortgage File"):

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

                  (ii) if in connection with any Mortgage Loan, the Depositor
         has not caused the original recorded Mortgage or power of attorney to
         be delivered to the Trustee because of a delay caused by the public
         recording office where such Mortgage or power of attorney has been
         delivered for recordation or because such Mortgage or power of attorney
         has been lost or because such public recording office retains the
         original recorded Mortgage or power of

<PAGE>

                                       -3-

         attorney, the Mortgage File shall include, in lieu of such Mortgage or
         power of attorney, a photocopy of such Mortgage or power of attorney,
         together with (a) in the case of a delay caused by the public recording
         office, an Officer's Certificate of the title insurer insuring the
         Mortgage stating that such Mortgage and power of attorney has been
         delivered to the appropriate public recording office for recordation
         and that the original recorded Mortgage or power of attorney or a copy
         of such Mortgage and power of attorney certified by such public
         recording office to be a true and complete copy of the original
         recorded Mortgage and power of attorney will be promptly delivered to
         the Trustee upon receipt by the Depositor; or (b) in the case where a
         public recording office retains the original recorded Mortgage or power
         of attorney or in the case where a Mortgage or power of attorney is
         lost after recordation in a public recording office, a copy of such
         Mortgage or power of attorney with the recording information thereon
         certified by such public recording office to be a true and complete
         copy of the original recorded Mortgage or power of attorney;

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

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

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

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

<PAGE>

                                       -4-

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

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

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

                  (x) if applicable, a true and complete copy, certified as such
         by an officer of the Seller, of each certificate or other evidence of
         merger or change of name, if any of the Mortgage Loans were acquired by
         the Seller by merger or acquired or originated by the Seller while
         conducting business under a name other than its present name and such
         certificate or other evidence shall not have been recorded in the
         public recording office where the related Mortgage is required to be
         recorded.

                  The Seller shall cause all Assignments referred to in clause
(iii) above and, to the extent necessary, in (iv) above to be recorded;
PROVIDED, HOWEVER, the Seller need not cause to be recorded any Assignment which
relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and
the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan; PROVIDED, HOWEVER,
notwithstanding the delivery of any Opinion of Counsel, the Seller shall submit
each Assignment for recording, at no expense to the Trust Fund or Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Seller, (iv) the occurrence of a servicing
transfer as described in Section 7.02 of the Pooling and Servicing Agreement,
(v) with respect to any one Assignment the occurrence of a foreclosure relating
to the Mortgagor under the related Mortgage and (vi) on or after the 90th day on
which the payment for such Mortgage Loan was due and payable and not received.
Notwithstanding the foregoing, if the Seller fails to pay the cost of recording
the Assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expenses by the Trust as set forth in the Pooling and
Servicing Agreement. In 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.

<PAGE>

                                       -5-

                  The Seller shall deliver or cause to be delivered to the
Purchaser promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan.

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

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser, the Master Servicer or the
Trustee in connection with enforcing any obligations of the Seller under this
Agreement will be promptly reimbursed by the Seller.

                           (e) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.

<PAGE>

                                       -6-

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             SELLER

                  (a) The Seller hereby represents and warrants, as of the date
hereof and as of the Closing Date, and covenants, that:

                           (i) The Seller is a national banking association,
duly organized and validly existing and in good standing under the laws of the
United States with full corporate power and authority to conduct its business as
presently conducted by it to the extent material to the consummation of the
transactions contemplated herein. The Seller had the full corporate power and
authority to acquire the Mortgage Loans. The Seller has the full corporate power
and authority to own the Mortgage Loans and to transfer and convey the Mortgage
Loans to the Purchaser and has the full corporate power and authority to execute
and deliver, engage in the transactions contemplated by, and perform and observe
the terms and conditions of this Agreement;

                           (ii) This Agreement has been duly and validly
authorized, executed and delivered by the Seller, all requisite corporate action
having been taken, and (assuming the due authorization, execution and delivery
hereof by the Purchaser) constitutes the valid, legal and binding obligation of
the Seller, enforceable in accordance with its terms, except as such enforcement
may be limited by (A) bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, (B) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (C) public
policy considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities;

                           (iii) No consent, approval, authorization or order
of, registration or filing with, or notice to any governmental authority or
court is required, under federal laws for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agree ment
or the consummation by the Seller of any other transaction contemplated hereby
and by the Pooling and Servicing Agreement; provided, however, that the Seller
makes no representation or warranty regarding federal or state securities laws
in connection with the sale or distribution of the Certificates;

                           (iv) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Seller to the
Purchaser, any affiliate of the Purchaser or the Trustee for use in connection
with the purchase of the Mortgage Loans and the transactions contemplated
hereunder and under the Pooling and Servicing Agreement will contain any untrue
statement of a material fact, or omit a material fact necessary to make the
information, certificate, statement or report not misleading in any material
respect.

                           (v) Neither the sale of the Mortgage Loans to the
Purchaser, nor the execution, delivery or performance of this Agreement by the
Seller, conflicts or will conflict with or results or will result in a breach of
or constitutes or will constitute a default (or an event, which

<PAGE>

                                       -7-

with notice or lapse of time or both, would constitute a default) under (A) any
terms or provisions of the certificate of incorporation or by-laws of the
Seller, (B) any term or provision of any material agreement, contract,
instrument or indenture, to which the Seller is a party or by which the Seller
or any of its property is bound or (C) any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Seller or any of its property, or results or will
result in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;

                           (vi) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans;

                           (vii) There is no litigation currently pending or, to
the best of the Seller's knowledge, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates, the execution, delivery, performance or
enforceability of this Agreement or that would result in a material adverse
change in the financial condition of the Seller;

                           (viii) Each Mortgage Note, each Mortgage, each
Assignment and any other document required to be delivered by or on behalf of
the Seller under this Agreement or the Pooling and Servicing Agreement to the
Purchaser or any assignee, transferee or designee of the Purchaser for each
Mortgage Loan has been or will be, in accordance with Section 4(b) hereof,
delivered to the Purchaser or any such assignee, transferee or designee. With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File in compliance with the Pooling and Servicing Agreement, except for
such documents that (A) have been delivered (1) to the Purchaser or any
assignee, transferee or designee of the Purchaser or (2) for recording to the
appropriate public recording office and have not yet been returned or (B) are
not required to be delivered to the Purchaser or any assignee, transferee or
designee of the Purchaser until 90 days following the Closing Date or such later
date as provided in Section 4;

                           (ix) The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any relevant jurisdiction, except any as may have been complied with;

                           (x) The Seller (A) is a solvent entity and is paying
its debts as they become due and (B) after giving effect to the transfer of the
Mortgage Loans, will be a solvent entity and will have sufficient resources to
pay its debts as they become due;

                           (xi) The form of endorsement of each Mortgage Note
satisfied the requirement, if any, of endorsement in order to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note; and each Assignment to be delivered
hereunder is in recordable form and is sufficient to effect the assignment of
and to

<PAGE>

                                       -8-

transfer to the assignee thereunder the benefits of the assignor, as mortgagee
or assignee thereof, under each Mortgage to which that Assignment relates;

                           (xii) The transfer of the Mortgage Loans to the
Purchaser at the Closing Date will be treated by the Seller for financial
accounting and reporting purposes as a sale of assets;

                           (xiii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller had good title to, and
was the sole owner of, the Mortgage Loans, and such sale validly transfers the
Mortgage Loans to the Purchaser free and clear of any pledge, lien, encumbrance
or security interest; and

                           (xiv) With respect to the Mortgage Loans, the Seller
hereby represents and warrants, as of the date hereof and as of the Closing
Date, that each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860(G)(a)(3) of the Code.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser
that, as to each Mortgage Loan, as of the Closing Date (or such other date
specified herein) for such Mortgage Loan:

                  (i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;

                  (ii) To the best knowledge of the Seller, the Mortgage Loans
are in compliance with all requirements set forth on Exhibit 1, and the
characteristics of the Mortgage Loans as set forth on Exhibit 1 are true and
correct;

                  (iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Closing Date, with respect to
such Mortgage Loan under the terms of the Mortgage Note have been made and with
respect to any Mortgage Loan whose Due Date is any day other than the first day
of the month, the June payment on such Mortgage Loan has been received; (b) the
Originator has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Note or Mortgage and (c) except with respect to approximately 0.22% of
the Group I Mortgage Loans and approximately 0.30% of the Group II Mortgage
Loans, by aggregate principal balance of the related Loan Group as of the
Cut-off Date, as of July 31, 2000, the payment required under any mortgage loan
has not been 30 or more days delinquent more than once during the last twelve
months;

                  (iv) To the best knowledge of the Seller, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;

<PAGE>

                                       -9-

                  (v) To the best knowledge of the Seller, the terms of the
Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments included in the Mortgage
File, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage; the substance of any such waiver,
alteration or modification has been approved by the title insurer and the PMI
Insurer, to the extent required by the related policy, and is reflected on the
Mortgage Loan Schedule. No instrument of waiver, alteration or modification has
been executed by the Seller or any other person in the chain of title from the
Seller, and no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and the terms of which are reflected in the
Mortgage Loan Schedule and included in the related Mortgage File;

                  (vi) Prior to the transfer to the Purchaser by the Seller, the
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;

                  (vii) To the best knowledge of the Seller, all buildings upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of the Pooling and Servicing
Agreement. All such insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged
Property was in an area identified on a Flood Hazard Map or Flood Insurance Rate
Map issued by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect which policy conforms to the requirements
of Fannie Mae and Freddie Mac. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;

                  (viii) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the origination and servicing of the Mortgage Loan
have been complied with;

                  (ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;

<PAGE>

                                      -10-

                  (x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the appraised
value of the Mortgaged Property and (c) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and,
as of the time it contributed the Mortgage Loan to the Purchaser, the Seller had
full right to contribute and assign the same to the Purchaser. The Mortgaged
Property was not, as of the date of origination of the Mortgage Loan, subject to
a mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;

                  (xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;

                  (xii) To the best knowledge of the Seller, all parties to the
Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed by such
parties. The Mortgagor is a natural person who is a party to the Mortgage Note
and the Mortgage is in an individual capacity or family trust that is guaranteed
by a natural person;

                  (xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage
Note or Mortgage;

                  (xiv) As of the Closing Date and prior to the sale of the
Mortgage Loan to the Purchaser, the Seller was the sole legal, beneficial and
equitable owner of the Mortgage Note and the Mortgage and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest;

                  (xv) To the best knowledge of the Seller, all parties which
have had any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and disposed
of such interest, were) in compliance with any and all applicable "doing
business" and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;

<PAGE>

                                      -11-

                  (xvi) The Mortgage Loan is covered by either (i) an ALTA
lender's title insurance policy acceptable to Fannie Mae or Freddie Mac, issued
by a title insurer acceptable to Fannie Mae and Freddie Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (x)(a) and (b) above) the Seller, its
successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan or (ii) an attorney's title
opinion, if customary in the related jurisdiction where the Mortgaged Property
is located. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;

                  (xvii) Other than as specified in paragraph (iii) above, there
is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration;

                  (xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;

                  (xix) All improvements which were considered in determining
the appraised value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;

                  (xx) The Mortgage Loan was (i) originated by the Seller or by
a savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD or (ii)
acquired by the Seller directly through loan brokers or correspondents such that
(a) the Mortgage Loan was originated in conformity with the Seller's
underwriting guidelines, (b) the Seller approved the Mortgage Loan prior to
funding and (c) the Seller provided the funds used to originate the Mortgage
Loan and acquired the Mortgage Loan on the date of origination thereof;

                  (xxi) Except with respect to 1.54% of the Group I Mortgage
Loans and 3.38% of the Group II Mortgage Loans, by aggregate principal balance
of the related Loan Group as of the Cut-off Date, which are construction
permanent loans, principal payments on the Mortgage Loan commenced no more than
two months after the proceeds of the Mortgage Loan were disbursed. The Mortgage
Loan bears interest at the Mortgage Rate. The Mortgage Note is payable on the
day of

<PAGE>

                                      -12-

each month set forth in the Mortgage Loan Schedule and in Monthly Payments which
will amortize the Stated Principal Balance of the Mortgage Loan over its
remaining term at the Mortgage Rate. Interest on the Mortgage Loan is calculated
on the basis of a 360-day year consisting of twelve 30- day months. The Mortgage
Note does not permit negative amortization;

                  (xxii) The origination and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all respects
legal, proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Master Servicer (directly
or through a subservicer) and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow Payments,
if any, all such payments are in the possession of, or under the control of, the
Master Servicer and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the Master Servicer
have been capitalized under any Mortgage or the related Mortgage Note;

                  (xxiii) To the best knowledge of the Seller, the Mortgaged
Property is free of damage and waste and there is no proceeding pending for the
total or partial condemnation thereof;

                  (xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale and (b)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
The Mortgagor has not notified the Seller and the Seller has no knowledge of any
relief requested or allowed to the Mortgagor under the Soldiers and Sailors
Civil Relief Act of 1940;

                  (xxv) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;

                  (xxvi) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, approved by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac; provided, however, that with respect to certain of
the Mortgage Loans, by aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, that were originated in the last 7 years, the Mortgage File
may contain a tax card rather than an appraisal and with respect to any Mortgage
Loan originated more than 7 years before the date hereof, such Mortgage File may
not contain an appraisal or a tax card;

                  (xxvii) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is

<PAGE>

                                      -13-

named in the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;

                  (xxviii) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loans are not graduated payment mortgage loans and the
Mortgage Loans do not have shared appreciation or other contingent interest
features;

                  (xxix) If the Mortgage Loan is a Refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required by
applicable law with respect to the making of a Refinanced Mortgage Loan, and
evidence of such receipt is and will remain in the Mortgage File;

                  (xxx) Except with respect to 1.54% of the Group I Mortgage
Loans and 3.38% of the Group II Mortgage Loans, by aggregate principal balance
of the related Loan Group as of the Cut-off Date, which were originated as
construction permanent loans and which have since converted to permanent
financing on the related Mortgaged Property, no Mortgage Loan was made in
connection with (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged Property;

                  (xxxi) The Mortgage Note, the Mortgage, the Assignment and any
other documents required to be delivered with respect to each Mortgage Loan
pursuant to the Pooling and Servicing Agreement, have been delivered to the
Trustee all in compliance with the specific requirements of the Pooling and
Servicing Agreement;

                  (xxxii) To the best knowledge of the Seller, the Mortgaged
Property is lawfully occupied under applicable law; all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities;

                  (xxxiii) The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (xxxiv) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;

<PAGE>

                                      -14-

                  (xxxv) Approximately 0.10% of the Group I Mortgage Loans, by
aggregate principal balance of the Group I Mortgage Loans as of the Cut-off
Date, have a balloon payment feature;

                  (xxxvi) To the best knowledge of the Seller, except with
respect to no more than 28.14% of the Group I Mortgage Loans and 50.51% of the
Group II Mortgage Loans, by aggregate principal balance of the related Loan
Group as of the Cut-off Date, neither the Seller nor any affiliate of the Seller
has made a mortgage on any Mortgaged Property other than the Mortgage Loan at
origination;

                  (xxxvii) The Mortgage Loan was not intentionally selected by
the Seller in a manner intended to adversely affect the interest of the
Purchaser;

                  (xxxviii) The Seller has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement;

                  (xxxix) The Mortgaged Property consists of a parcel of real
property with a single family residence erected thereon, or a two to four-family
dwelling, or an individual condominium unit in a low-rise or high-rise
condominium project, or an individual unit in a planned unit development. The
Mortgaged Property is improved with a Residential Dwelling. Without limiting the
foregoing, to the best knowledge of the Seller, the Mortgaged Property does NOT
consist of any of the following property types: (a) co-operative units, (b)
earthen homes, (c) underground homes, (d) mobile homes and (e) manufactured
homes (as defined in the Fannie Mae Originator-Servicer's Guide), except when
the appraisal indicates that the home is of comparable construction to a stick
or beam construction home, is readily marketable, has been permanently affixed
to the site and is not in a mobile home "park." The Mortgaged Property is either
a fee simple estate or a long-term residential lease. If the Mortgage Loan is
secured by a long-term residential lease, unless otherwise specifically
disclosed in the Mortgage Loan Schedule, (A) the terms of such lease expressly
permit the mortgaging of the leasehold estate, the assignment of the lease
without the lessor's consent (or the lessor's consent has been obtained and such
consent is the Mortgage File) and the acquisition by the holder of the Mortgage
of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially similar
protection; (B) the terms of such lease do not (x) allow the termination thereof
upon the lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default or (y) prohibit
the holder of the Mortgage from being insured under the hazard insurance policy
relating to the Mortgaged Property; (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate earlier than
ten years after the maturity date of the Mortgage Note; and (E) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates for
residential properties is an accepted practice;

                  (xl) At the time of origination, the Loan-to-Value Ratio of
any Group I Mortgage Loan was not greater than 100.00% and the Loan-to-Value
Ratio of any Group II Mortgage Loan was not greater than 100.00%;

<PAGE>

                                      -15-

                  (xli) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee, at the option of the Mortgagee;

                  (xlii) To the best of the Seller's knowledge, each Mortgage
Loan with a Loan-to- Value Ratio at origination in excess of 80% will be insured
by a primary mortgage insurance policy (a "Primary Insurance Policy") covering
at least 25% of the Scheduled Principal Balance of the Mortgage Loan at
origination if the Loan-to-Value Ratio is between 95.00% and 90.01%, at least
12% of the principal balance if the Loan-to-Value Ratio is between 90.00% and
85.01%, at least 6% of the principal balance if the Loan-to-Value Ratio is
between 85.00% and 80.01% and each Primary Insurance Policy insures the named
insured and its successors and assigns, and the issuer of the Primary Insurance
Policy is an insurance company whose claims-paying ability is currently
acceptable to the Rating Agencies;

                  (xliii) To the best knowledge of the Seller, no error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;

                  (xliv) With respect to any assumption, modification,
consolidation or extension agreements, such agreement has been recorded by the
Seller if required under applicable law; and

                  (xlv) The Seller has delivered each certificate, certified by
an officer of the Seller, or other evidence of merger or change of name, signed
or stamped by the applicable regulatory authority, if any of the Mortgage Loans
were acquired by the Seller by merger or acquired or originated by the Seller
while conducting business under a name other than its present name and such
certificate or other evidence is not recorded in the public recording office
where the related Mortgage is required to be recorded.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of Mortgage
Pass-Through Certificates evidencing an interest in all or a portion of the
Mortgage Loans. With respect to the representations and warranties contained
herein which are made to the knowledge or the best of knowledge of the Seller,
or as to which the Seller has no knowledge, if it is discovered that the
substance of any such representation and warranty was inaccurate as of the date
such representation and warranty was made or deemed to be made, and such
inaccuracy materially and adversely affects the value of the related

<PAGE>

                                      -16-

Mortgage Loan or the interest therein of the Purchaser or the Purchaser's
assignee, transferee or designee, then notwithstanding the lack of knowledge by
the Seller with respect to the substance of such representation and warranty
being inaccurate at the time the representation and warranty was made, the
Seller shall take such action described in the following paragraph in respect of
such Mortgage Loan.

                  Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller as part of any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan, the Purchaser or the Purchaser's assignee,
transferee or designee or the party discovering the breach shall give prompt
written notice to the Seller. Within ninety (90) days of its discovery or its
receipt of notice of any such missing documentation which was not transferred to
the Purchaser as described above or materially defective documentation or any
breach of a represen tation and warranty, the Seller promptly shall deliver such
missing document or cure such defect or breach in all material respects, or in
the event the Seller cannot deliver such missing document or such defect or
breach cannot be cured, the Seller shall within ninety (90) days of its
discovery or receipt of notice, either (i) repurchase the affected Mortgage Loan
at the Purchase Price or (ii) pursuant to the provisions of the Pooling and
Servicing Agreement, cause the removal of such Mortgage Loan from the Trust Fund
and substitute one or more Qualified Substitute Mortgage Loans. With respect to
Mortgage Loans where the Mortgage File is missing a material document that was
transferred from the Seller to the Purchaser or upon discovery by the Seller,
the Purchaser or any assignee, transferee or designee of the Purchaser of a
breach of any of the representations and warranties contained in Section 5(xi),
(xiii) and (xiv) that materially and adversely affects the value of any Mortgage
Loan, the Purchaser or the Purchaser's assignee, transferee or designee, the
party discovering such breach shall give prompt written notice to the Seller.
The Seller shall amend the Closing Schedule to reflect the withdrawal of such
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement and the addition, if any, of a Qualified Substitute Mortgage Loan. The
Seller shall deliver to the Purchaser such amended Closing Schedule and shall
deliver such other documents as are required by this Agreement or the Pooling
and Servicing Agreement within five (5) days of any such amendment. Any
repurchase pursuant to this Section 7(a) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price in accordance with
Section 2.03 of the Pooling and Servicing Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, repurchase or substitute for a
defective Mortgage Loan constitute the sole remedies of the Purchaser against
the Seller, respecting a missing or defective document or a breach of the rep
resentations and warranties contained in Section 5 or Section 6. It is
understood and agreed that the obligations of the Seller set forth in this
Section 7 to repurchase or substitute for a Mortgage Loan as to which a material
document is missing constitute the sole remedies of the Purchaser against the
Seller respecting a missing document.

<PAGE>

                                      -17-

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller under this Agreement shall be true and correct
                           in all material respects as of the date as of which
                           they are made and no event shall have occurred which,
                           with notice or the passage of time, would constitute
                           a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Purchase Price and the Union Planters Certificates.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                           (a)      An Officers' Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and Salomon Smith Barney Inc. (the
                                    "Underwriter") may rely, in a form
                                    acceptable to the Purchaser;

                           (b)      An Secretary's Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in a
                                    form acceptable to the Purchaser, and
                                    attached thereto copies of the certificate
                                    of incorporation, by-laws and certificate of
                                    good standing of the Seller;

<PAGE>

                                      -18-

                           (c)      An Officers' Certificate of the Seller,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in a
                                    form acceptable to the Purchaser, with
                                    respect to certain facts regarding the sale
                                    of the Mortgage Loans by the Seller to the
                                    Purchaser;

                           (d)      An Opinion of Counsel of the Seller, dated
                                    the Closing Date and addressed to the
                                    Purchaser and the Underwriter, in a form
                                    acceptable to the Purchaser;

                           (e)      Such opinions of counsel as the Rating
                                    Agencies or the Trustee may request in
                                    connection with the sale of the Mortgage
                                    Loans by the Seller to the Purchaser or the
                                    Seller's execution and delivery of, or
                                    performance under, this Agreement;

                            (f)     A letter from Deloitte & Touche L.L.P.,
                                    certified public accountants, dated the date
                                    hereof and to the effect that they have
                                    performed certain specified procedures as a
                                    result of which they determined that certain
                                    information of an accounting, financial or
                                    statistical nature set forth in the
                                    Purchaser's Prospectus Supplement, dated
                                    August 28, 2000 under the subheadings
                                    "Summary of Prospectus Supplement--The
                                    Mortgage Loans," "Risk Factors" (to the
                                    extent of information regarding the Mortgage
                                    Loans therein) "The Mortgage Pool" and "The
                                    Mortgage Loan Seller" agrees with the
                                    records of the Seller;

                            (g)     A letter from PricewaterhouseCoopers,
                                    L.L.P., certified public accountants, dated
                                    the date hereof and to the effect that they
                                    have performed certain specified procedures
                                    as a result of which they determined that
                                    certain information of an accounting,
                                    financial or statistical nature set forth in
                                    the Purchaser's Prospectus Supplement, dated
                                    August 28, 2000 under the subheading
                                    "Pooling and Servicing Agreement--The Master
                                    Servicer" agrees with the records of the
                                    Master Servicer; and

                           (h)      Such further information, certificates,
                                    opinions and documents as the Purchaser or
                                    the Underwriter may reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all necessary and reasonable costs and expenses incurred
directly in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, recording fees, fees for title policy endorsements
and continuations and the fees for recording Assignments, the costs and expenses
of printing (or otherwise reproducing) and delivering this Agreement, the
Pooling and Servicing Agreement, the Certificates, the prospectus, Prospectus
Supplement, and private placement memorandum relating

<PAGE>

                                      -19-

to the Certificates and other related documents, the initial fees, costs and
expenses of the Trustee set forth in an engagement letter delivered to the
Seller by the Trustee, the fees and expenses of the Depositor's counsel in
connection with the preparation of all documents relating to the securitization
of the Mortgage Loans, the filing fee charged by the Securities and Exchange
Commission for registration of the Certificates, the fees charged by any rating
agency to rate the Certificates and the ongoing expenses of the Rating Agencies.
All other costs and expenses in connection with the transactions contemplated
hereunder shall be borne by the party incurring such expense.

                  SECTION 11. [Reserved].

                  SECTION 12. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price and
delivered or caused to be delivered the Union Planters Certificates, or any such
condition shall not have been waived or satisfied and the Purchaser determines
not to pay or cause to be paid the Purchase Price and not to deliver or cause to
deliver the Union Planters Certificates, the Purchaser shall immediately effect
the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred
and the security interest created by this Section 12 shall be deemed to have
been released.

                  SECTION 13. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 390 Greenwich Street, New York,
New York 10013, Attention: Mortgage Finance Group, or such other address as may
hereafter be

<PAGE>

                                      -20-

furnished to the Seller in writing by the Purchaser; if to the Seller, addressed
to the Seller at 215 Forrest Street, Hattiesburg, Mississippi 39401-3476,
Attention: Brenda Goff, or to such other address as the Seller may designate in
writing to the Purchaser.

                  SECTION 14. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 15. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agree ment and the
Pooling and Servicing Agreement.

                  SECTION 16. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 17. INDEMNIFICATION. (a) The Seller will indemnify and
hold harmless each of (i) the Purchaser and (ii) each person, if any, who
controls the Purchaser within the meaning of the Securities Act of 1933, as
amended (the "1933 Act") (i) through (iii) collectively, the "Indemnified
Party"), against any losses, claims, damages or liabilities to which such
Indemnified Party may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (a) any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement dated
August 28, 2000 (the "Prospectus Supplement"), as amended or supplemented,
relating to the public offering of the Certificates, representing interests in
the Mortgage Loans, or in any other offering document (the "Private Placement
Memorandum") relating to the offering by the Purchaser or an affiliate thereof,
of the Subordinate Certificates, the Class IO Certificates or the Class PO
Certificates or in any revision or amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading in each case to the
extent and only to the extent that such untrue statement or alleged untrue
statement or omission or

<PAGE>

                                      -21-

alleged omission relates to information furnished by the Seller specifically for
use in the Prospectus Supplement, under the captions "Summary of Prospectus
Supplement--The Mortgage Loans," "Risk Factors," "The Mortgage Pool," "Pooling
and Servicing Agreement--The Master Servicer" and "The Mortgage Loan Seller"
(and substantially identical information approved by the Seller for inclusion in
the Private Placement Memorandum relating to the Union Planters Certificates),
(b) any representation, warranty or covenant made by the Seller in this
Agreement and (c) any updated collateral information provided by the Underwriter
to a purchaser of the certificates derived from the data provided by the Seller
or in the Remittance Report or a current collateral tape obtained from the
Seller or an affiliate of the Seller, including the current loan balances of the
Mortgage Loans to the extent such information was inaccurate ((a) through (c)
collectively, the "Seller Information") and will reimburse each such Indemnified
Party for any legal or other expenses reasonably incurred by such Indemnified
Party and each such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. The Seller's
liability under this Section 17 shall be in addition to any other liability the
Seller may otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Seller, its officers and its directors, and each person who controls the Seller
within the meaning of the 1933 Act against any and all losses, claims, damages
or liabilities, joint or several, to which they may become subject under the
1933 Act, or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based in whole or in part upon any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus Supplement, the Prospectus or Private Placement Memorandum, or in any
revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, as of
the date thereof and as of the Closing Date, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made therein in reliance upon and in
conformity with the Seller Information and will reimburse the Seller and each
such controlling person for any legal or other expenses reasonably incurred by
the Seller and each such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. The Purchaser's
liability under this Section 17 shall be in addition to any other liability the
Purchaser may otherwise have.

                  (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 17(a) or 17(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named

<PAGE>

                                      -22-

parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by the Purchaser, in the case of parties indemnified pursuant to clause
17(a) and by the Seller, in the case of parties indemnified pursuant to clause
17(b). The indemnifying party may, at its option, at any time upon written
notice to the indemnified party, assume the defense of any proceeding and may
designate counsel satisfactory to the indemnified party in connection therewith
provided that the counsel so designated would have no actual or potential
conflict of interest in connection with such representation. Unless it shall
assume the defense of any proceeding, the indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. If the
indemnifying party assumes the defense of any proceeding, it shall be entitled
to settle such proceeding with the consent of the indemnified party or, if such
settlement provides for release of the indemnified party in connection with all
matters relating to the proceeding which have been asserted against the
indemnified party in such proceeding by the other parties to such settlement,
without the consent of the indemnified party.

                  (d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

                  (e) The Purchaser and the Seller agree that it would not be
just and equitable if contribution pursuant to Section 17 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the considerations referred to in Section 17(d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in this Section 17 shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, except where the
indemnified party is required to bear such expenses pursuant to this Section 17,
which expenses the indemnifying party shall pay as and when incurred, at the
request of the indemnified party, to the extent that the indemnifying party will
be ultimately obligated to pay such expenses. In the event that any expenses so
paid by

<PAGE>

                                      -23-

the indemnifying party are subsequently determined to not be required to be
borne by the indemnifying party hereunder, the party which received such payment
shall promptly refund the amount so paid to the party which made such payment.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

                  (f) The indemnity and contribution agreements contained in
this Section 17 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Purchaser or any person controlling the Purchaser or by or on behalf of the
Seller and their respective directors or officers or any person controlling the
Seller and (iii) acceptance of and payment for any of the Certificates.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the con version, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time

<PAGE>

                                      -24-

held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (4) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law.
Any assignment of the interest of the Purchaser pursuant to Section 4(d) hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

<PAGE>

                                      -25-

                  IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                               SALOMON BROTHERS MORTGAGE
                                               SECURITIES VII, INC.

                                               By:____________________________
                                               Name:
                                               Title: Assistant Vice President

                                               UNION PLANTERS BANK, NATIONAL
                                               ASSOCIATION

                                               By:____________________________
                                               Name:  Morgan McCarty
                                               Title: Vice President

<PAGE>

                                                                       EXHIBIT 1

                  Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:

                  All percentages set forth herein are based upon the aggregate
unpaid principal balances of the Mortgage Loans as of the Cut-off Date.

         (1)      No Mortgage Loan in either Loan Group had a current
                  Loan-to-Value Ratio in excess of 99.75%;

         (2)      No more than 1.26% of the Group I Mortgage Loans and 5.42% of
                  the Group II Mortgage Loans (measured by aggregate principal
                  balance of the related Loan Group as of the Cut-off Date), are
                  related to Mortgaged Properties located in any one zip
                  code area;

         (3)      Each Mortgaged Property is located in one of the states listed
                  in the charts entitled "Geographic Distribution of the
                  Mortgaged Properties relating to the Group I Mortgage Loans"
                  and "Geographic Distribution of the Mortgaged Properties
                  relating to the Group II Mortgage Loans" in the Prospectus
                  Supplement;

         (4)      No more than approximately 5.53% of the Group I Mortgage Loans
                  and approximately 5.65% of the Group II Mortgage Loans
                  (measured by aggregate principal balance of the related Loan
                  Group as of the Cut-off Date) are secured by condominium
                  units;

         (5)      No more than 0.04% of the Group I Mortgage Loans (measured by
                  aggregate principal balance of the Group I Mortgage Loans as
                  of the Cut-off Date) are secured
                  by Town Houses;

         (6)      No Group I Mortgage Loan had a principal balance in excess of
                  $252,000 at origination and no Group II Mortgage Loan had a
                  principal balance in excess of $2,873,432 at origination;

         (7)      Each Group I Mortgage Loan was originated between June 1971
                  and June 2000 and each Group II Mortgage Loan was originated
                  between March 1975 and June 2000;

         (8)      On the basis of representations made by the Mortgagors in
                  their loan applications, no more than 8.85% of the Group I
                  Mortgage Loans and 2.67% of the Group II Mortgage Loans (by
                  aggregate principal balance of the related Loan Group as of
                  the Cut-off Date) are secured by non-owner occupied homes and
                  at least 91.15% of the Group I Mortgage Loans and 97.33% of
                  the Group II Mortgage Loans (by aggregate principal balance of
                  the related Loan Group as of the Cut-off Date) are owner-
                  occupied Mortgaged Properties;

         (9)      The Mortgage Rates borne by the Group I Mortgage Loans as of
                  the Cut-off Date ranged from 6.00% per annum to 12.97% per
                  annum and the weighted average Mortgage Rate for the Group I
                  Mortgage Loans as of the Cut-off Date was 8.77% per annum and
                  the Mortgage Rates borne by the Group II Mortgage Loans as of
                  the Cut-off Date ranged from 6.50% per annum to 16.00% per
                  annum and the weighted

<PAGE>

                                       -2-

                  average Mortgage Rate for the Group II Mortgage Loans as of
                  the Cut-off Date was 8.39% per annum; and

         (10)     As of the Cut-off Date, approximately 20.93% of the Group I
                  Mortgage Loans and approximately 26.52% of the Group II
                  Mortgage Loans were rate/term refinancings, approximately
                  11.14% of the Group I Mortgage Loans and approximately 12.58%
                  of the Group II Mortgage Loans were cash out refinancings and
                  approximately 67.94% of the Group I Mortgage Loans and
                  approximately 60.91% of the Group II Mortgage Loans were made
                  to purchase the related Mortgaged Properties (in each case, by
                  aggregate principal balance of the related Loan Group as of
                  the Cut-off Date).

<PAGE>

                                    EXHIBIT E
                                    ---------

                               REQUEST FOR RELEASE

To:      Wells Fargo Bank Minnesota, N.A.
         1015 10th Avenue S.E.
         Minneapolis, MN  55414-0031
         Attn:   Inventory Control

          Re:  Pooling and Servicing Agreement dated as of August 1, 2000, among
               Salomon Brothers Mortgage Securities VII, Inc., as Depositor,
               Union Planters PMAC, Inc., as Master Servicer, and Wells Fargo
               Bank Minnesota, National Association, as Trustee
               -----------------------------------------------------------------

     In connection with the administration of the Mortgage Loans held by you as
Trustee for the Owner pursuant to the above-captioned Agreement, we request the
release, and hereby acknowledge receipt, of the Trustee's Mortgage File for the
Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______        1.    Mortgage Paid in Full

_______        2.    Foreclosure

_______        3.    Substitution

_______        4.    Other Liquidation (Repurchases, etc.)

_______        5.    Nonliquidation
Reason:____________________________________

Address to which Trustee should
Deliver the Custodian's Mortgage File:         ________________________________
                                               ________________________________
                                               ________________________________

                                               By:_____________________________
                                                       (authorized signer)

<PAGE>

Issuer:___________________________________
                                Address:    ________________________________
                                            ________________________________

Date:_____________________________________
Trustee

Wells Fargo Bank Minnesota, N.A.

Please acknowledge the execution of the above request by your signature and date
below:

________________________________                         ______________________
Signature                                                Date

Documents returned to Trustee:

________________________________                         ______________________
Trustee                                             Date

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                           [Date]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

        Re:  Salomon Brothers Mortgage Securities VII, Inc.,
             Union Planters Mortgage Pass-Through Certificates, Series 2000-UP1,
             Class ___, representing a ___% Class ___ Percentage Interest
             -------------------------------------------------------------------

Ladies and Gentlemen:

          In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

          Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
August 1, 2000, among Salomon Brothers Mortgage Securities VII, Inc. as
Depositor, Union Planters PMAC, Inc. as Master Servicer and Wells Fargo Bank
Minnesota, National Association as Trustee (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.

<PAGE>

          Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                            Very truly yours,

                                            [Transferor]

                                            By:____________________________
                                            Name:
                                            Title:

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                     [Date]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

          Re:  Salomon Brothers Mortgage Securities VII, Inc.,
               Mortgage Pass-Through Certificates, Series 2000-1,
               Class ___, representing a ___% Class ___ Percentage Interest
               ------------------------------------------------------------

Ladies and Gentlemen:

          In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

          1. The Transferee is a "qualified institutional buyer" as that term is
     defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
     "1933 Act") and has completed either of the forms of certification to that
     effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
     the sale to it is being made in reliance on Rule 144A. The Transferee is
     acquiring the Certificates for its own account or for the account of a
     qualified institutional buyer, and understands that such Certificate may be
     resold, pledged or transferred only (i) to a person reasonably believed to
     be a qualified institutional buyer that purchases for its own account or
     for the account of a qualified institutional buyer to whom notice is given
     that the resale, pledge or transfer is being made in reliance on Rule 144A,
     or (ii) pursuant to another exemption from registration under the 1933 Act.

          2. The Transferee has been furnished with all information regarding
     (a) the Certificates and distributions thereon, (b) the nature, performance
     and servicing of the Mortgage Loans, (c) the Pooling and Servicing
     Agreement referred to below, and (d) any credit enhancement mechanism
     associated with the Certificates, that it has requested.

<PAGE>

          All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of August 1, 2000, among Salomon Brothers Mortgage Securities VII, Inc.
as Depositor, Union Planters PMAC, Inc. as Master Servicer and Wells Fargo Bank
Minnesota, National Association as Trustee, pursuant to which the Certificates
were issued.

                                        [TRANSFEREE]

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

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

          [For Transferees Other Than Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Wells Fargo Bank Minnesota, National Association, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.

     ___  CORPORATION, ETC. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or any organization described in
          Section 501(c)(3) of the Internal Revenue Code of 1986.

     ___  BANK. The Transferee (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

     ___  SAVINGS AND LOAN. The Transferee (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least

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

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

<PAGE>

          $25,000,000 as demonstrated in its latest annual financial statements,
          a copy of which is attached hereto.

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

     ___  INSURANCE COMPANY. The Transferee is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

     ___  STATE OR LOCAL PLAN. The Transferee is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

     ___  ERISA PLAN. The Transferee is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

     ___  INVESTMENT ADVISOR. The Transferee is an investment advisor registered
          under the Investment Advisers Act of 1940.

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

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

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

    ___   ___    Will the Transferee be purchasing the Certificates

<PAGE>

    Yes   No     only for the Transferee's own account?

          6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

          7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.

Dated:

                                      ___________________________________
                                      Print Name of Transferee

                                      By: _______________________________
                                      Name:
                                      Title:

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

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

           [For Transferees That Are Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Wells Fargo Bank Minnesota, National Association, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

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

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.

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

____      The Transferee is part of a Family of Investment Companies which owned
          in the aggregate $______________ in securities (other than the
          excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

          3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements,

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

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

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

Dated:

                                         ____________________________________
                                         Print Name of Transferee or Advisor

                                         By: ________________________________
                                         Name:
                                         Title:

                                         IF AN ADVISER:

                                         ____________________________________
                                         Print Name of Transferee

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

          The undersigned hereby certifies on behalf of the purchaser named
     below (the "Purchaser") as follows:

          1.  I am an executive officer of the Purchaser.

          2.  The Purchaser is a "qualified institutional buyer", as defined in
     Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.

          3.  As of the date specified below (which is not earlier than the last
     day of the Purchaser's most recent fiscal year), the amount of
     "securities", computed for purposes of Rule 144A, owned and invested on a
     discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser ______________________________________________________________

By:      (Signature)____________________________________________________________

Name of Signatory ______________________________________________________________

Title __________________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

<PAGE>

                                   EXHIBIT F-2
                                   -----------

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK                   )
                                    : ss.:
COUNTY OF NEW YORK                  )

          _________________ , being duly sworn, deposes, represents and warrants
as follows:

          1. I am a ______________________ of ____________________ (the "Owner")
a corporation duly organized and existing under the laws of ______________, the
record owner of Salomon Brothers Mortgage Securities VII, Inc., Union Planters
Mortgage Pass- Through Certificates, Series 2000-UP1, Class R (the "Class R
Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.

          2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 20__ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

          3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual

<PAGE>

interest, unless no significant purpose of the transfer is to impede the
assessment or collection of tax.

          4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

          5. The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

          6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.

          7. The Owner's taxpayer identification number is ___________________.

          8. The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(d) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

          9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

          10. The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class R Certificates, and hereby represents to and for the benefit of the
person from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.

          11. The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.

          12. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

<PAGE>

          13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

          14. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it knows, or knows facts that should lead it to believe, that any such
representations are false.

          15. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".

          16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.

                                         [OWNER]

                                         By:__________________________________
                                         Name:
                                         Title:      [Vice] President

ATTEST:

By:______________________________
Name:
Title:   [Assistant] Secretary

          Personally appeared before me the above-named ______________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200___.

                                                 _______________________________
                                                            Notary Public

                                                 County of _____________________
                                                 State of ______________________

                                                 My Commission expires:

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK                   )
                                    : ss. :
COUNTY OF NEW YORK                  )

          __________________________________ , being duly sworn, deposes,
represents and warrants as follows:

1.   I am a ____________________ of _____________________________ (the "Owner"),
a corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.

          2. The Owner is not transferring the Class R (the "Residual
Certificates") to impede the assessment or collection of any tax.

          3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

          4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-2. The Owner does not know or believe that
any representation contained therein is false.

          5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.

          6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.

                                                 [OWNER]

                                                 By:____________________________
                                                 Name:
                                                 Title:      [Vice] President

ATTEST:

By:___________________________
Name:
Title:  [Assistant] Secretary

          Personally appeared before me the above-named _____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.

          Subscribed and sworn before me this ____ day of ___________, 200__.

                                                 _______________________________
                                                           Notary Public

                                                 County of _____________________
                                                 State of ______________________

                                                 My Commission expires:

<PAGE>

                                    EXHIBIT G
                                    ---------

          FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                  _____________, 20__

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

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

                   Re:  Salomon Brothers Mortgage Securities VII, Inc.
                        Union Planters Mortgage Pass-Through Certificates,
                        Series 2000-UP1, Class__
                        --------------------------------------------------

Dear Sirs:

          __________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Salomon Brothers Mortgage Securities VII, Inc.,
Union Planters Mortgage Pass- Through Certificates, Series 2000-UP1, Class ____
(the "Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of August 1, 2000 among Salomon
Brothers Mortgage Securities VII, Inc. as depositor (the "Depositor"), Union
Planters PMAC, Inc. as master servicer (in such capacity, the "Master Servicer")
and Wells Fargo Bank Minnesota, National Association as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1) or
(2) are accurate:

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

<PAGE>

     _____ (2) The purchase of Certificates is permissible under applicable law,
     will not constitute or result in any prohibited transaction under ERISA or
     Section 4975 of the Code, will not subject the Depositor, the Trustee or
     the Master Servicer to any obligation in addition to those undertaken in
     the Pooling and Servicing Agreement and the transferee is an insurance
     company and (A) the source of funds used to purchase such Certificate is an
     "insurance company general account" (as such term is defined in PTCE
     95-60), (B) the conditions set forth in PTCE 95-60 have been satisfied
     (including the requirement that such Certificates are subject to an ERISA
     Qualifying Underwriting) and (C) there is no Plan with respect to which the
     amount of such general account's reserves and liabilities for contracts
     held by or on behalf of such Plan and all other Plans maintained by the
     same employer (or any "affiliate" thereof, as defined in PTCE 95-60) or by
     the same employee organization, exceeds 10% of the total of all reserves
     and liabilities of such general account (as determined under PTCE 95-60) as
     of the date of the acquisition of such Certificates.

                                      Very truly yours,

                                      __________________________________

                                      By:_______________________________
                                      Name:
                                      Title:

<PAGE>

                                   Schedule 1
                                   ----------

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]

<PAGE>

                                   Schedule 2
                                   ----------

        MORTGAGE LOAN SCHEDULE WITH RESPECT TO MORTGAGE LOANS WITH LOAN-
               TO-VALUE RATIOS IN EXCESS OF 80% THAT HAVE PRIMARY
                           MORTGAGE INSURANCE POLICES

                                [FILED BY PAPER]

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