AMRESCO, INC.

       Senior Subordinated Notes, Series 1998-A due 2005

            Officers' Certificate and Company Order

     Pursuant  to  the Subordinated Notes Indenture dated  as  of
March 1, 1997 (the "Master Indenture") between AMRESCO, INC. (the
"Company")  and  Bank  One,  N.A., as  Trustee  (the  "Trustee"),
resolutions  adopted  by  the Company's  Board  of  Directors  on
February 25, 1997 and January 28, 1998 and resolutions adopted by
the  Company's  Pricing Committee as of February 23,  1998,  this
Officers' Certificate and Company Order is being delivered to the
Trustee  to  establish  the terms of a series  of  Securities  in
accordance with Section 301 of the Master Indenture, to establish
the  form  of  the  Securities of such series in accordance  with
Section  201  of  the  Master  Indenture  and  to  establish  the
procedures  for the authentication and delivery of the Securities
of such series pursuant to Section 303 of the Master Indenture.

     Capitalized  terms  used  and not otherwise  defined  herein
shall have the meanings assigned to them in the Master Indenture.

     The  Company  has  complied  with all  conditions  precedent
provided   for   in   the  Master  Indenture  relating   to   the
establishment of (i) a series of Securities, (ii)  the  forms  of
such  series  of  Securities and (iii)  the  procedures  for  the
authentication and delivery of such series of Securities.

A.    Establishment  of Series Pursuant to  Section  301  of  the
Master Indenture.

     The  Company hereby establishes, pursuant to Section 301  of
the  Master Indenture, a series of Securities that shall have the
following terms:

     1.   The series of Securities being authorized hereby shall bear
the  title  "9.875% Series 1998-A Senior Subordinated  Notes  due
2005" (the "Notes").

     2.   The aggregate principal amount of the Notes shall be limited
to  $350,000,000  (except for Notes authenticated  and  delivered
pursuant  to Section 306 of the Master Indenture, and except  for
any Notes which, pursuant to Section 303 of the Master Indenture,
are  deemed  never  to  have  been  authenticated  and  delivered
thereunder).

     3.   Interest on each Note shall be payable to the Person in
whose  name  such Note is registered at the close of business  on
the  first  day of the month (whether or not a Business  Day)  in
which the relevant Interest Payment Date (as defined in paragraph
5 hereof) occurs.

     4.   The Notes shall mature on March 15, 2005, at which time the
entire  principal  amount of the Notes  and  accrued  but  unpaid
interest on the Notes will be due and payable.
1.
     5.   Each Note shall bear interest at the annual rate of 9.875%.
Interest on the Notes shall be payable semi-annually on March  15
and  September  15 of each year, or, if any such  day  is  not  a
Business  Day,  on  the  next succeeding Business  Day  (each  an
"Interest  Payment  Date").  Interest  payable  on  any  Interest
Payment Date shall include interest on the Notes to and excluding
such  Interest  Payment  Date.  The first Interest  Payment  Date
shall  be  September  15, 1998, and shall include  interest  from
February  27,  1998 to and excluding the first  Interest  Payment
Date.  Interest on the Notes will be computed on the basis  of  a
360-day  year  of twelve 30-day months.  If any Interest  Payment
Date does not fall on a Business Day, any interest payment due on
such  Interest Payment Date shall be made on the next  succeeding
Business  Day with the same force and effect as if made  on  such
Interest Payment Date, and no interest shall be payable  on  such
interest  payment  for the period from and  after  such  Interest
Payment Date through the date of such payment.

     6.   The principal of and interest on the Notes shall be payable,
and  the  Notes may be exchanged or transferred at an  office  or
agency  to  be  maintained  by the  Company  in  the  Borough  of
Manhattan,  the  City of New York, New York, and Columbus,  Ohio,
except  that, at the option of the Company, payment  of  interest
may  be  by  check mailed to the address of each Holder  as  such
address appears on the Security Register.

     7.    The  Notes are subject to redemption, at the Company's
option, at any time in whole, or from time to time in part, on or
after  March 15, 2002, and prior to maturity, upon not less  than
30 nor more than 60 days' prior notice mailed by first class mail
to  each  Holder's  last address as it appears  on  the  Security
Register,  at  the following redemption prices  (expressed  as  a
percentage of principal amount), plus accrued and unpaid interest
(if  any)  to  the date of redemption (subject to  the  right  of
Holders of record on the relevant record date that is on or prior
to  the  redemption date to receive interest due on  an  Interest
Payment  Date), if redeemed during the 12-month period commencing
March 15, of the years set forth below:

                                   Redemption Price

               2002                          104.938%
               2003                          102.469%
               2004 and thereafter           100.000%

     8.   The Company shall have no obligation to redeem or purchase
Notes  at  the  option of a Holder thereof  or  pursuant  to  any
sinking fund or analogous provisions, except as set forth below:

          (a)   Right  to Require Repurchase.  In the event  that
     there  shall  occur  a  Repurchase  Event  (as  defined   in
     paragraph  (g)), then each Holder shall have the  right,  at
     such  Holder's option, to require the Company  to  purchase,
     and  upon  the  exercise of such right,  the  Company  shall
     purchase, all or any part of such Holder's Notes on the date
     (the  "Repurchase Date") that is 30 days after the date  the
     Company gives notice of the Repurchase Event as contemplated
     in  paragraph  (b)(1)  at a price (the  "Repurchase  Price")
     equal to 100% of the principal amount thereof, together with
     accrued and unpaid interest to the Repurchase Date; provided
     that,  if  the Repurchase Event is a Change of Control,  the
     Repurchase  Price  shall be equal to 101% of  the  principal
     amount  of  the  Holder's Notes, together with  accrued  and
     unpaid  interest  to  the Repurchase Date.   Such  right  to
     require  the repurchase of Notes shall not continue after  a
     discharge  of the Company from its obligations with  respect
     to  the  Notes in accordance with Article Four of the Master
     Indenture.

          (b)  Notice; Method of Exercising Repurchase Right.

               (1)    On  or  before  the  15th  day  after   the
          Repurchase Event, the Company, or, upon Company Request
          transmitted  to  the  Trustee within  5  days  of  such
          Repurchase Event, the Trustee (in the name and  at  the
          expense  of  the  Company), shall give  notice  of  the
          occurrence   of  the  Repurchase  Event  and   of   the
          repurchase right set forth herein arising as  a  result
          thereof  by first-class mail, postage prepaid, to  each
          Holder  of the Notes at such Holder's address appearing
          in  the Security Register.  Such notice shall be deemed
          to  have  been given at the time of posting of such  by
          first-class mail. The Company shall also deliver a copy
          of such notice of a repurchase right to the Trustee.

               Each notice of a repurchase right shall state:

                    (i)   that  the notice is being made pursuant
                    to   paragraph   8(a)   of   this   Officer's
                    Certificate  and Company Order and  that  all
                    Notes tendered shall be accepted for payment.
                    Such  notice  shall also state (A)  that  any
                    Note  not  tendered shall continue to  accrue
                    interest,  if  any;  (B)  that,  unless   the
                    Company  defaults  in  the  payment  of   the
                    Repurchase  Price,  all  Notes  accepted  for
                    payment  in  respect  of a  Repurchase  Event
                    shall cease to accrue interest, if any, after
                    the  Repurchase Date; (C) in  the  event  the
                    repurchase right is exercised with respect to
                    less  than the entire principal amount  of  a
                    surrendered  Note, the Company shall  execute
                    and  deliver  to the Trustee and the  Trustee
                    shall  authenticate for issuance in the  name
                    of  the  Holder a new Note or  Notes  in  the
                    aggregate    principal    amount    of    the
                    unrepurchased  portion  of  such  surrendered
                    Note (which unrepurchased portion must be  in
                    a  principal amount of $1,000 or an  integral
                    multiple thereof); and  (D) a description  of
                    the  circumstances triggering the  repurchase
                    right, including, in the case of a Change  of
                    Control,  the  relevant facts regarding  such
                    Change of Control (including, but not limited
                    to,  information with respect  to  pro  forma
                    historical    income,    cash    flow     and
                    capitalization  after giving effect  to  such
                    Change in Control);

                    (ii) the Repurchase Date;

                    (iii)     the date on which withdrawal rights
                    terminate   and  the  date   by   which   the
                    repurchase right must be exercised;
                    (iv) the Repurchase Price; and

                    (v)  the instructions a Holder must follow to
                    exercise a repurchase right.

               No  failure  of the Company to give the  foregoing
          notice  shall  limit any Holder's right to  exercise  a
          repurchase   right.    The  Trustee   shall   have   no
          affirmative obligation to determine if there shall have
          occurred a Repurchase Event.

               (2)   To  exercise the repurchase right, a  Holder
          shall deliver to the Company (or an agent designated by
          the Company for such purpose in the notice referred  to
          in  (1)  above)  and to the Trustee on  or  before  the
          Business  Day prior to the Repurchase Date (i)  written
          notice  of  the Holder's exercise of such right,  which
          notice  shall  set forth the name of  the  Holder,  the
          principal amount of the Note or Notes (or portion of  a
          Note)  to  be  repurchased, and  a  statement  that  an
          election to exercise the repurchase right is being made
          thereby,  and  (ii) the Note or Notes with  respect  to
          which  the  repurchase right is being  exercised,  duly
          endorsed  for transfer to the Company.  A Holder  shall
          be  entitled  to withdraw its election if  the  Trustee
          receives,  on  or before the close of business  on  the
          second  Business  Day prior to the  Repurchase  Date  a
          telegram,  telex,  facsimile  transmission  or   letter
          setting  forth  the name of such Holder, the  principal
          amount   of   the   Notes  theretofore  delivered   for
          repurchase, and a statement as to the principal  amount
          of  Notes  as  to which such Holder is withdrawing  its
          notice, and after the close of business on such  second
          Business  Day prior to the Repurchase Date all  written
          notices  of repurchase not theretofore withdrawn  shall
          be irrevocable; provided, however, that the Company, in
          its  sole and absolute discretion, may consent  to  the
          withdrawal  of any Notes after such date and  prior  to
          the  Repurchase  Date.   If the Repurchase  Date  falls
          between any Regular Record Date and the next succeeding
          Interest Payment Date, Notes to be repurchased must  be
          accompanied  by a check from the Holder  of  an  amount
          equal  to  the  interest thereon which  the  registered
          Holder  thereof is to receive on such Interest  Payment
          Date.   Upon  receipt  of any such check,  the  Trustee
          shall forward such check to the Company.

               (3)   In  the  event a repurchase right  shall  be
          exercised  in  accordance with the  terms  hereof,  the
          Company shall on the Repurchase Date pay or cause to be
          paid in cash to the Holder thereof the Repurchase Price
          of  the Note or Notes as to which the repurchase  right
          had  been  exercised.  In the event that  a  repurchase
          right is exercised with respect to less than the entire
          principal  amount  of a surrendered Note,  the  Company
          shall  execute  and  deliver to  the  Trustee  and  the
          Trustee shall authenticate for issuance in the name  of
          the  Holder  a  new  Note  or Notes  in  the  aggregate
          principal amount of the unrepurchased portion  of  such
          surrendered Note.

               (4)    The   Company   shall   comply   with   the
          requirements of Rule 14e-1 under the Exchange  Act  and
          any other securities laws and regulations thereunder to
          the extent such laws and regulations are applicable  to
          such  party  in connection with the repurchase  of  the
          Notes as a result of a Repurchase Event.

          (c)   Deposit  of Repurchase Price.  On or  before  the
     Repurchase Date, the Company shall deposit with the  Trustee
     or  with a Paying Agent (or, if the Company is acting as its
     own Paying Agent, segregate and hold in trust as provided in
     Section  1003 of the Master Indenture) an amount  of  money,
     which shall be good funds on the Repurchase Date, sufficient
     to  pay  the Repurchase Price of the Notes which are  to  be
     repurchased on the Repurchase Date.

          (d)   Notes Not Repurchased on Repurchase Date.   If  a
     Note surrendered for repurchase shall not be so paid on  the
     Repurchase  Date,  the  principal shall,  until  paid,  bear
     interest to the extent permitted by applicable law from  the
     Repurchase Date at the rate per annum borne by such Note.

          (e)   Notes Repurchased In Part.  Any Note which is  to
     be  repurchased  only in part shall be  surrendered  at  any
     office  or agency of the Company designated for that purpose
     pursuant  to Section 1002 of the Master Indenture (with,  if
     the  Company or the Trustee so requires, due endorsement by,
     or  written  instrument of transfer in form satisfactory  to
     the  Company  and the Trustee duly executed by,  the  Holder
     thereof or his attorney duly authorized in writing), and the
     Company  shall  execute, and the Trustee shall  authenticate
     and  deliver  to  the  Holder of such Note  without  service
     charge,  a  new Note or Notes of any authorized denomination
     as  requested by such Holder, in aggregate principal  amount
     equal  to  and in exchange for the unrepurchased portion  of
     the principal of the Note so surrendered.

          (f)   Priority of Repurchase Rights.  If the Repurchase
     Event  is  the occurrence of an event requiring an offer  to
     repurchase  Junior Debt, the Holders of the Notes  requiring
     the  Company  to  repurchase Notes  must  be  paid  in  full
     pursuant  to  the terms and conditions of this  paragraph  8
     prior  to  any payments being made to the holders of  Junior
     Debt.  If the Repurchase Event is the occurrence of an event
     requiring an offer to repurchase Subordinated Debt  that  is
     pari  passu  with  the  Notes,  the  Holders  of  the  Notes
     requiring  the  Company to repurchase  Notes  must  be  paid
     concurrently   with   the  holders  of   such   pari   passu
     Subordinated Debt.

          (g)   Definition of Repurchase Event.  For purposes  of
     this  paragraph 8, a "Repurchase Event" shall have  occurred
     upon  the occurrence of either (i) any event requiring  that
     the  Company repurchase, or make an offer to repurchase, any
     Senior  Debt  or  Subordinated Debt other  than  the  Notes,
     whether  now outstanding or issued in the future or  (ii)  a
     Change of Control (as defined in paragraph (h)).

          (h)  Definition of Change of Control.  For purposes  of
     this paragraph 8, a "Change of Control" means the occurrence
     of  one  or  more of the following events:  (A) a person  or
     entity or group of persons or entities acting in concert  as
     a partnership, limited partnership, syndicate or other group
     shall,  as  a  result  of a tender or exchange  offer,  open
     market   purchases,   privately  negotiated   purchases   or
     otherwise,  have  become the beneficial  owner  (within  the
     meaning  of  Rule 13d-3 under the Exchange  Act)  of  Voting
     Stock  of  the  Company representing  50%  or  more  of  the
     combined voting power of the outstanding Voting Stock of the
     Company;  (B)  the consummation of (x) any consolidation  or
     merger  of  the  Company in which the  Company  is  not  the
     continuing  or  surviving corporation or pursuant  to  which
     shares of the Company's Voting Stock would be converted into
     cash,  securities or other property, other than a merger  of
     the  Company  in  which the holders of the Company's  Voting
     Stock  immediately prior to the merger have  a  majority  of
     voting  power  with  respect to  the  Voting  Stock  of  the
     surviving corporation immediately after the merger,  or  (y)
     any   sale,  lease,  exchange  or  other  transfer  (in  one
     transaction or a series of related transactions) of  all  or
     substantially all the assets of the Company,  other  than  a
     sale or other transfer in which the holders of the Company's
     Voting Stock immediately prior to such sale or transfer have
     a  majority of voting power with respect to the Voting Stock
     of the transferee corporation immediately after such sale or
     other  transfer; (C) the shareholders of the  Company  shall
     approve  any  plan  or  proposal  for  the  liquidation   or
     dissolution  of  the Company, other than  a  liquidation  or
     dissolution  in  which the holders of the  Company's  Voting
     Stock  immediately prior to such liquidation or  dissolution
     have  the  same  proportionate share of  voting  power  with
     respect  to  the Voting Stock of the corporation which  will
     hold  all or substantially all of the assets of the  Company
     immediately  after such liquidation or dissolution;  or  (D)
     individuals  who  at the date of this Officer's  Certificate
     and  Company  Order constitute the Board of Directors  shall
     cease  for  any  reason to constitute at  least  a  majority
     thereof,  unless the election or the nomination for election
     by  the  Company's  shareholders of each  new  director  was
     approved  by a vote of at least a majority of the  directors
     who  were members of such Board of Directors at the time  of
     such nomination or election.

     9.   The Notes shall not be convertible into shares of capital
stock or exchangeable for other securities.

     10.  The Trustee shall be the Security Registrar and Paying Agent
for the Notes.

     11.  Neither the amount of principal of, nor any premium  or
interest  on,  any Notes shall be determined by reference  to  an
index or pursuant to a formula.

     12.   In  addition to the covenants set forth in the  Master
Indenture,   the  Notes  shall  be  subject  to   the   following
restrictive covenants:

          (a)   In  addition to those terms defined in the Master
     Indenture,  the  following terms  shall  have  the  meanings
     assigned when used in connection with the Notes:

          The term "Acquired Indebtedness" means indebtedness  of
     a  Person  existing  at  the  time  such  Person  becomes  a
     Subsidiary of the Company or assumed in connection with  the
     acquisition by the Company or a Subsidiary of the Company of
     assets  from  such  Person, and not incurred  in  connection
     with,  or  in  anticipation  of,  such  Person  becoming   a
     Subsidiary of the Company or such acquisition.

          The  term "Consolidated Capitalization" means, for  any
     date  as of which such determination is being made, the  sum
     of  Subordinated Debt plus Consolidated Net Worth,  in  each
     case  as set forth on the consolidated balance sheet of  the
     Company  and  its  Subsidiaries prepared in accordance  with
     GAAP,  as  of the end of the most recently completed  fiscal
     quarter  of  the  Company  for which consolidated  financial
     statements of the Company are available.

          The  term "Consolidated EBITDA" means, for any  period,
     the sum of (i) Consolidated Net Income before taxes and,  to
     the  extent deducted in calculating Consolidated Net Income,
     (ii) depreciation expense, plus amortization of intangibles,
     plus  interest expense, each as deducted in determining such
     Consolidated   Net  Income  before  taxes,   determined   in
     accordance with GAAP on a consolidated basis for the Company
     and its Subsidiaries.

          The term "Consolidated Interest Expense" means, for any
     period,  the interest expense which is required to be  shown
     as  such on the financial statements of the Company and  its
     Subsidiaries,   on   a  consolidated  basis,   prepared   in
     accordance with GAAP.

          The  term  "Consolidated  Net Income"  means,  for  any
     period, the amount of Consolidated Net Income (loss) of  the
     Company,  determined  in  accordance  with  GAAP;  provided,
     however,  that  there shall not be included in  Consolidated
     Net  Income (1) any net income (loss) of a Subsidiary of the
     Company   for  any  period  during  which  it  was   not   a
     Consolidated  Subsidiary (provided  that  equity  method  of
     accounting  affiliates shall not be excluded); (2)  any  net
     income  (loss) of businesses, properties or assets  acquired
     or  disposed of (by way of merger, consolidation,  purchase,
     sale  or otherwise) by the Company or any Subsidiary of  the
     Company  for any period prior to the acquisition thereof  or
     subsequent  to  the disposition thereof, including  any  net
     income  (loss) of any person acquired by the  Company  or  a
     Subsidiary of the Company in a transaction accounted for  as
     a  pooling of interests, for any period prior to the date of
     acquisition; (3) all extraordinary gains and losses, net  of
     any  tax  effect; (4) the cumulative effect of a  change  in
     accounting  principles;  and  (5)  the  net  income  of  any
     Subsidiary of the Company to the extent that the declaration
     or  payment  of dividends or similar distributions  by  that
     Subsidiary  of such income is not at the time  permitted  by
     the  express  terms of its organizational documents  or  any
     agreement,  instrument,  judgment, decree,  order,  statute,
     rule   or   governmental  regulation  applicable   to   such
     Subsidiary.

          The  term "Consolidated Net Worth" means, for any  date
     as of which such determination is being made, the excess, as
     determined   in  accordance  with  GAAP,  after  appropriate
     deduction  for  minority  interests  in  the  net  worth  of
     Consolidated Subsidiaries, of the Company's assets over  its
     liabilities,  in each case as set forth on the  consolidated
     balance  sheet of the Company and its Subsidiaries  prepared
     in  accordance with GAAP, as of the end of the most recently
     completed   fiscal   quarter  of  the  Company   for   which
     consolidated  financial  statements  of  the   Company   are
     available.

          The  term  "Consolidated Subsidiary" means a Subsidiary
     of  the  Company,  the  financial statements  of  which  are
     consolidated with the financial statements of the Company in
     accordance with GAAP.

          The  term "Disqualified Stock" means any capital  stock
     that  by  its  terms (or by the terms of any  security  into
     which it is convertible or for which it is exchangeable), or
     upon  the  happening of any event, matures or is mandatorily
     redeemable,  pursuant  to  a  sinking  fund  obligation   or
     otherwise,  or  is redeemable at the option  of  the  holder
     thereof,  in whole or in part, on or prior to the  scheduled
     maturity of the Notes.

          "Funded Debt" means any of the following obligations of
     the  Company or any Subsidiary of the Company which  by  its
     terms  matures at or is extendable or renewable at the  sole
     option  of the obligor without requiring the consent of  the
     obligee to a date more than 360 days after the date  of  the
     creation  or  incurrence  of  such  obligation:    (i)   any
     obligations, contingent or otherwise, for borrowed money  or
     for   the  deferred  purchase  price  of  property,  assets,
     securities  or services (including, without limitation,  any
     interest  accruing subsequent to an event of default),  (ii)
     all  obligations (including the Notes) evidenced  by  bonds,
     notes,  debentures or other similar instruments,  (iii)  all
     indebtedness  created or arising under any conditional  sale
     or  other title retention agreement with respect to property
     acquired (even though the rights and remedies of the  seller
     or  lender under such agreement in the event of default  are
     limited  to  repossession or sale of such property),  except
     any such obligation that constitutes a trade payable and  an
     accrued   liability  arising  in  the  ordinary  course   of
     business,  if  and  to  the  extent  any  of  the  foregoing
     indebtedness  would  appear as a liability  upon  a  balance
     sheet  prepared  in accordance with GAAP, (iv)  all  Capital
     Lease  Obligations, (v) liabilities of the Company  actually
     due  and  payable under banker's acceptances or  letters  of
     credit,  (vi)  all indebtedness of the type referred  to  in
     clauses (i), (ii), (iii), (iv) or (v) above secured  by  (or
     for  which  the holder of such indebtedness has an  existing
     right,  contingent or otherwise, to be secured by) any  lien
     upon or security interest in property of the Company or  any
     Subsidiary  of  the Company (including, without  limitation,
     accounts  and contract rights), even though the  Company  or
     any  Subsidiary  of  the Company has not assumed  or  become
     liable  for the payment of such indebtedness and  (vii)  any
     guarantee  or  endorsement (other  than  for  collection  or
     deposit in the ordinary course of business) or discount with
     recourse of, or other agreement, contingent or otherwise, to
     purchase,  repurchase, or otherwise acquire, to  supply,  or
     advance  funds  or  become  liable  with  respect  to,   any
     indebtedness  or any obligation of the type referred  to  in
     any of the foregoing clauses (i) through (vi), regardless of
     whether  such  obligation would appear on  a  balance  sheet
     prepared in accordance with GAAP.

          "Incur"  means  to issue, assume, guarantee,  incur  or
     otherwise  become  liable  for any  Indebtedness;  provided,
     however, that any Indebtedness of a Person existing  at  the
     time  such  person becomes a Subsidiary (whether by  merger,
     consolidation, acquisition or otherwise) shall be deemed  to
     be  Incurred  by such Subsidiary at the time  it  becomes  a
     Subsidiary.    Any  Indebtedness  issued   at   a   discount
     (including Indebtedness on which interest is payable through
     the  issuance  of additional Indebtedness) shall  be  deemed
     Incurred   at   the  time  of  original  issuance   of   the
     Indebtedness  at the initial accreted amount  thereof.   The
     term  "Incurrence"  when  used  as  a  noun  shall  have   a
     correlative meaning.

          "Indebtedness"  is  defined as any obligations  of  the
     Company  or  any  Subsidiary  of  the  Company  that   would
     constitute Funded Debt but for their term of maturity.

          The  term "Interest Coverage Ratio" means, for any date
     of  determination, the ratio of (1) Consolidated EBITDA  for
     the  immediately  preceding  four  most  recent  consecutive
     calendar  quarters  ending  prior  to  the  date   of   such
     determination for which consolidated financial statements of
     the  Company  are  available, to (2)  Consolidated  Interest
     Expense   for  such  four  consecutive  calendar   quarters;
     provided, however, that:

               (i)   if  the  Company or any  Subsidiary  of  the
     Company  has  Incurred any Senior Recourse Debt (other  than
     pursuant  to  the Revolving Loan Agreement, as amended  from
     time to time, or any successor or replacement facilities) or
     Subordinated  Debt since the beginning of such  period  that
     remains outstanding on such date of determination or if  the
     transaction  giving  rise  to  the  need  to  calculate  the
     Interest  Coverage Ratio is an Incurrence  of  Indebtedness;
     Consolidated  EBITDA and Consolidated Interest  Expense  for
     such period shall be calculated after giving effect on a pro
     forma  basis  to (A) the Incurrence of such Senior  Recourse
     Debt  (other than pursuant to the Revolving Loan  Agreement,
     as   amended  from  time  to  time,  or  any  successor   or
     replacement facilities) or Subordinated Debt as  if  it  had
     been  Incurred on the first day of such period and  (B)  the
     discharge  of  any  other  Indebtedness  repaid,  cancelled,
     defeased or otherwise discharged with the proceeds  of  such
     new  Senior  Recourse Debt or Subordinated Debt as  if  such
     discharge had occurred on the first day of such period;

               (ii)  if  since the beginning of such  period  the
     Company or any Subsidiary of the Company shall have disposed
     of  its  equity  investment in a Subsidiary such  that  such
     Subsidiary  is  no  longer consolidated  on  a  consolidated
     balance  sheet  of the Company prepared in  accordance  with
     GAAP, then (A) Consolidated EBITDA for such period shall  be
     reduced  by  an amount equal to the portion of  Consolidated
     EBITDA  (if positive) directly attributable to such divested
     Subsidiary  for  such period, and (B) Consolidated  Interest
     Expense for such period shall be reduced by an amount  equal
     to  the  portion of Consolidated Interest Expense  for  such
     period  directly  attributable to  such  Subsidiary  to  the
     extent  the Company and its other Subsidiaries are no longer
     liable  for  such  Indebtedness after  such  sale  or  other
     disposition; and

               (iii)      if  since the beginning of such  period
     the  Company  or  any Subsidiary of the Company  shall  have
     acquired or made an equity investment in a person which as a
     result thereof became a Subsidiary which is consolidated  on
     a  consolidated  balance sheet of the  Company  prepared  in
     accordance   with   GAAP,  then  Consolidated   EBITDA   and
     Consolidated  Interest  Expense for  such  period  shall  be
     calculated  on a pro forma basis giving effect thereto  (and
     to  the  Incurrence  of  any Indebtedness  Incurred  by  the
     Company   or  any  of  its  Subsidiaries  to  finance   such
     acquisition  or  investment)  as  if  such  acquisition   or
     investment had occurred on the first day of such period.

          For  purposes  of this definition, if any  Indebtedness
     bears  a  floating rate of interest and is being  given  pro
     forma  effect,  the  interest expense on  such  Indebtedness
     shall be calculated as if the rate in effect on the date  of
     determination  had been the applicable rate for  the  entire
     period.

          The  term "Junior Debt" means the principal amount  of,
     premium,  if  any,  and interest on, and any  other  amounts
     payable  in respect of, any Funded Debt, whether outstanding
     on  the  date of execution of the Subordinated Indenture  or
     thereafter   Incurred;  provided  that  in  the   instrument
     creating or evidencing such Funded Debt or pursuant to which
     such Funded Debt is outstanding it is provided that (1) such
     Indebtedness is junior in right of payment to the Notes, (2)
     no payments with respect to such Indebtedness may be made at
     any time that an Event of Default shall have occurred and be
     continuing  and  (3) no payments other than the  payment  of
     interest  may  be made with respect to such Indebtedness  at
     any time the Notes are Outstanding.

          "Material  Subsidiary" is defined as Holliday  Fenoglio
     Fowler,  L.P.,  AMRESCO Services, L.P., AMRESCO  Residential
     Mortgage    Corporation,    AMRESCO    Residential    Credit
     Corporation, AMRESCO Commercial Lending Corporation and  any
     other  Subsidiary  of the Company whose assets  or  revenues
     comprise  at  least  five percent  (5%)  of  the  assets  or
     revenues of the Company and the Subsidiaries of the  Company
     on  a  consolidated  basis as of the end  of,  or  for,  the
     Company's   most  recently  completed  fiscal  quarter,   as
     determined from time to time.

          "Net Cash Proceeds" means, with respect to any issuance
     or sale of capital stock, the cash proceeds of such issuance
     or   sale   net  of  attorneys'  fees,  accountants'   fees,
     underwriters'  or  placement  agents'  fees,  discounts   or
     commissions  and  brokerage,  consultant  and   other   fees
     actually incurred in connection with such issuance  or  sale
     and net of taxes paid or payable as a result thereof.

          "Revolving Loan Agreement" means the Third Amended  and
     Restated Revolving Loan Agreement dated as of September  30,
     1997   and  as  subsequently  amended,  among  the  Company,
     NationsBank of Texas, N.A. and Bank One, Texas, N.A., as Co-
     Agents, and the lenders which are parties thereto from  time
     to time.

          The term "Senior Recourse Debt" means Senior Debt minus
     any  Funded  Debt of the Company or any of its  Subsidiaries
     that   is  (A)(i)  specifically  advanced  to  finance   the
     acquisition  of  assets classified on the Company's  balance
     sheet  as "assets held for sale" and (ii) either (a) secured
     by  the  assets  to which such indebtedness relates  without
     recourse  to the Company or any of its Subsidiaries  or  (b)
     issued under a loan agreement that requires each advance  to
     be  repaid  upon  sale of the assets to which  such  advance
     relates  within no more than one year from the date of  such
     advance  or  (B) advanced to a Subsidiary of the Company  or
     group  of  Subsidiaries of the Company formed for  the  sole
     purpose  of  acquiring or holding a portfolio of assets  (i)
     against  which  a  loan  is obtained that  is  made  without
     recourse to, and with no cross-collateralization against the
     assets  of,  the  Company  or any other  Subsidiary  of  the
     Company,  and  (ii) upon complete or partial liquidation  of
     which  the  loan  must  be  correspondingly  completely   or
     partially repaid, as the case may be.

          The  term  "Total  Funded Recourse Debt"  means  Senior
     Recourse Debt plus Subordinated Debt.

          (b)  The Company may not, and may not permit any of its
     Subsidiaries  to, directly or indirectly, Incur  any  Funded
     Debt  if, immediately after giving effect thereto (including
     giving effect to the substantially concurrent retirement  of
     any   existing  indebtedness  from  the  proceeds  of   such
     additional Funded Debt):

          (1)  the  aggregate  amount  of  Senior  Recourse  Debt
               outstanding  would exceed 450%  of  the  Company's
               Consolidated Capitalization; or

          (2)  the aggregate amount of Total Funded Recourse Debt
               outstanding  would exceed 600%  of  the  Company's
               Consolidated Net Worth; or

          (3)  the   aggregate   amount  of   Subordinated   Debt
               outstanding  would exceed 100%  of  the  Company's
               Consolidated Net Worth.

          (c)  The Company may not, and may not permit any of its
     Subsidiaries  to, directly or indirectly, Incur  any  Senior
     Recourse  Debt  (other than pursuant to the  Revolving  Loan
     Agreement, as amended from time to time, or any successor or
     replacement facilities) or Subordinated Debt if, immediately
     after giving effect thereto (including giving effect to  the
     substantially   concurrent  retirement   of   any   existing
     Indebtedness   from   the  proceeds   of   such   additional
     Indebtedness) the Interest Coverage Ratio would be less than
     1.25 to 1.00.

          (d)  The Company may not, and may not permit any of its
     Subsidiaries  to, directly or indirectly, (i) declare or pay
     any  dividend or make any distribution on or in respect  of,
     either in cash or property, any shares of its capital  stock
     (except  dividends or other distributions payable solely  in
     shares of its capital stock (other than Disqualified Stock),
     and  except  for dividends or distributions payable  to  the
     Company  or any of its Subsidiaries (and, if such Subsidiary
     is  not  wholly-owned by the Company, to  such  Subsidiary's
     other  stockholders  on a pro rata basis)),  (ii)  purchase,
     redeem  or retire or otherwise acquire for value any  shares
     of  its capital stock or any warrants, rights or options  to
     purchase  or  acquire  any shares of capital  stock  of  the
     Company,  or (iii) purchase, repurchase, redeem, defease  or
     otherwise  acquire  for value, prior to scheduled  maturity,
     scheduled  repayment or scheduled sinking fund payment,  any
     Junior Debt of the Company or any of its Subsidiaries (other
     than the purchase, repurchase or other acquisition of Junior
     Debt  acquired in anticipation of satisfying a sinking  fund
     obligation, principal installment or final maturity, in each
     case  within one year of the date of such acquisition) (such
     dividends,  purchases, redemptions, retirements, defeasance,
     payments and distributions being herein collectively  called
     "Restricted Payments") if, after giving effect thereto,

          (1)   an  Event  of Default under the Master  Indenture
          would  have occurred or has occurred and is continuing;
          or

          (2)  (A)  the sum of (i) such Restricted Payments  plus
               (ii)   the  aggregate  amount  of  all  Restricted
               Payments made during the period after December 31,
               1996  would exceed (B) the sum of (i) $50  million
               plus  (ii)  50% of the Company's Consolidated  Net
               Income  accrued during the period (treated as  one
               accounting period) from the beginning of the first
               fiscal quarter commencing after December 31,  1996
               to  the  end  of  the most recent  fiscal  quarter
               ending  prior  to  the  date  of  such  Restricted
               Payment    for   which   consolidated    financial
               statements of the Company are available (with 100%
               reduction  for  a loss in any fiscal  year),  plus
               (iii) the cumulative Net Cash Proceeds received by
               the  Company  from  the  issuance  or  sale  after
               December 31, 1996 of capital stock of the Company,
               other  than  Disqualified Stock  or  the  sale  of
               capital stock to a Subsidiary of the Company or an
               employee  stock ownership plan maintained  by  the
               Company, plus (iv) the amount of any Indebtedness,
               as  shown on the most recent balance sheet of  the
               Company prepared in accordance with GAAP, that has
               been  converted into common stock of  the  Company
               after December 31, 1996; or

          (3)  the Company would not be able to Incur at least an
               additional   $1.00  of  Funded  Debt   under   the
               covenants set forth in paragraph 12(b) or 12(c).

     Notwithstanding  the foregoing, the  Company  may   make   a
     previously-declared Restricted Payment within 60 days  after
     the  date of declaration thereof if the declaration of  such
     Restricted Payment was permitted under this paragraph  12(d)
     when made.  For purposes of this paragraph 12(d), the amount
     of  any  Restricted  Payment payable in  property  shall  be
     deemed  to  be  the  fair market value of such  property  as
     determined by the Board of Directors of the Company.

          (e)   The  Company shall not, directly  or  indirectly,
     Incur  any  Funded  Debt which is expressly  subordinate  in
     right of payment to any Senior Debt, other than Junior  Debt
     or  indebtedness that is pari passu with the Notes in  right
     of  payment.   For  purposes of this  paragraph  12(e),  the
     Incurrence  of  Senior  Debt which is unsecured  shall  not,
     because of its unsecured status, be deemed to be subordinate
     in right of payment to any Senior Debt which is secured.

          (f)   The  Company shall not and shall not  permit  any
     Subsidiary of the Company to, create or otherwise  cause  to
     become  effective any consensual encumbrance or  restriction
     of  any kind on the ability of any Subsidiary of the Company
     to  (a) pay dividends or make any other distribution on  its
     capital  stock, (b) pay any indebtedness owed to the Company
     or  any  other Subsidiary of the Company or (c) make  loans,
     advances,  or  capital contributions or transfer  assets  or
     properties  to  the Company or any other Subsidiary  of  the
     Company except (i) as set forth in the instrument evidencing
     or  the  agreement  governing Acquired Indebtedness  of  any
     acquired  entity which becomes a Subsidiary of the  Company,
     provided,  that  any restriction or encumbrance  under  such
     instrument  or agreement existed at the time of acquisition,
     was  not  put  in place in anticipation of such acquisition,
     and  is  not applicable to any Person, other than the Person
     or property or assets of the Person so acquired; (ii) as set
     forth  in, or permitted by, the Master Indenture, the  Notes
     and   the   Company   Order;  (iii)   customary   provisions
     restricting subletting or assignment of any lease or license
     of  the  Company or any Subsidiary of the Company; (iv)  any
     encumbrance  or  restriction arising under  applicable  law;
     (v)   any   encumbrance   or   restriction   arising   under
     indebtedness  or other agreements existing on  the  date  of
     original  issuance of the Notes; (vi) any restrictions  with
     respect  to a Subsidiary of the Company imposed pursuant  to
     an  agreement  that has been entered into for  the  sale  or
     disposition of the stock, business, assets or properties  of
     such   Subsidiary;  (vii)  any  encumbrance  or  restriction
     arising  under the terms of purchase money obligations,  but
     only  to the extent such purchase money obligations restrict
     or  prohibit  the  transfer  of the  property  so  acquired;
     (viii)   any   encumbrance  or  restriction  arising   under
     customary non-assignment provisions in installment  purchase
     contracts;  (ix)  any  encumbrance  or  restriction  on  the
     ability  of  any Subsidiary to transfer any of its  property
     acquired  after  the  date hereof  to  the  Company  or  any
     Subsidiary that is required by a lender to, or purchaser  of
     any  indebtedness of, such Subsidiary in connection  with  a
     financing  of  the  acquisition of such property  (including
     with  respect  to  the  purchase  of  asset  portfolios  and
     pursuant  to  the  underwriting or origination  of  mortgage
     loans)  by  such  Subsidiary; and  (x)  any  encumbrance  or
     restriction   pursuant  to  any  agreement   that   extends,
     refinances,  renews or replaces any agreement  described  in
     the foregoing clauses (i) through (ix).

          (g)  The Company shall not, and shall not permit any of
     its Material Subsidiaries to, enter into any transaction (or
     series   of   related   transactions),  including,   without
     limitation,   any  loan,  advance,  guarantee   or   capital
     contribution  to,  or  for  the benefit  of,  or  any  sale,
     purchase,  lease,  exchange  or  other  disposition  of  any
     property  or  the  rendering of any service,  or  any  other
     direct or indirect payment, transfer or other disposition (a
     "Transaction"),  involving payments in  excess  of  $60,000,
     with any Affiliate of the Company (other than a wholly-owned
     Subsidiary), on terms and conditions less favorable  to  the
     Company  or  such Material Subsidiary, as the case  may  be,
     than  would  be  available  at such  time  in  a  comparable
     Transaction  in  arm's  length dealings  with  an  unrelated
     Person as determined by the Board of Directors.

          The  provisions of the immediately preceding  paragraph
     will not apply to:

               (1)    Restricted  Payments  otherwise   permitted
          pursuant  to  the Master Indenture and  this  Officer's
          Certificate and Company Order;

               (2)  fees and compensation (including amounts paid
          pursuant  to  employee  benefit  plans)  paid  to,  and
          indemnity  provided on behalf of, officers,  directors,
          employees  or  consultants  of  the  Company   or   any
          Subsidiary, as determined by the Board of Directors  or
          the  senior management thereof in the exercise of their
          reasonable business judgment; or

               (3)  payments for goods and services purchased  in
          the  ordinary  course  of business  on  an  arms-length
          basis.

          (h)   The Company will not, and will not permit any  of
     its  Subsidiaries to, directly or indirectly, create, Incur,
     assume or suffer to exist any lien, pledge, charge or  other
     encumbrance ("Lien") that secures obligations in respect  of
     any  Subordinated  Debt  or Junior  Debt  on  any  asset  or
     property  of  the Company or such Subsidiary (including  the
     capital  stock  of any such Subsidiary), or  any  income  or
     profits  therefrom, or assign or convey any right to receive
     income  therefrom, unless the Notes are equally and  ratably
     secured  with the obligations so secured (or senior  to,  in
     the  event the Lien relates to Junior Debt) until such  time
     as such obligations are no longer secured by a Lien.

     13.  The Notes shall be issued in denominations of $1,000 and any
integral multiple thereof.

     14.  The Notes shall be denominated, and payments of principal of
and  any premium and interest on the Notes shall be made, in  the
currency of the United States of America.

     15.   The  Notes shall be subject to the events  of  default
specified  in  Section 501, paragraphs (1) through  (8),  of  the
Master Indenture.

     16.  The portion of the principal amount of the Notes which shall
be  payable upon declaration of acceleration of Maturity  thereof
pursuant  to  Section 502 of the Master Indenture  shall  be  the
entire principal amount thereof.

     17.  The Notes shall initially be issued as book-entry notes in
the  form of one or more fully registered global securities which
will  be  deposited with, or on behalf of, The  Depository  Trust
Company,  as  depositary ("DTC"), and registered in the  name  of
DTC's  nominee.  Beneficial interests in the Notes will be  shown
on,  and transfers thereof will be effected only through, records
maintained  by DTC and its participants.  Except as described  in
the Master Indenture, Notes in definitive certificated form shall
not  be  issuable  to any Person other than DTC and  such  global
security  may not be exchanged for Notes registered in  the  name
of,  nor  may any transfer of such global security be  registered
to, any Person other than DTC or its nominee.

     18.  The Notes shall be governed by the defeasance provisions of
Section  403  and  any other applicable sections  of  the  Master
Indenture.

     19.  The Notes shall be issued in fully registered form only,
without coupons.

     20.  The Notes shall be unsecured obligations of the Company and
shall be subordinated in right of payment to the prior payment in
full  of  all  Senior Debt to the extent provided in  the  Master
Indenture.  Each Holder, by accepting delivery of a Note,  agrees
to such subordination.  The Notes shall be pari passu in right of
payment with the Company's 10% Senior Subordinated Notes due 2004
and the Company's 10% Senior Subordinated Notes due 2003.
1.
B.   Establishment of Form of Note Pursuant to Section 201 of the
     Master Indenture.

     The  Company hereby establishes, pursuant to Section 201  of
the  Master  Indenture, that the Notes shall be substantially  in
the form attached as Exhibit A hereto.

C.   Order  for Authentication and Delivery of Notes Pursuant  to
     Section 303 of the Master Indenture.

     Pursuant to Section 303 of the Master Indenture, the Company
hereby orders that the Trustee shall authenticate and deliver  to
DTC the global securities representing the Notes delivered by the
Company to the Trustee, as provided in Section 303 of the  Master
Indenture.

D.   Compliance.

     The  undersigned  have read the pertinent  sections  of  the
Master  Indenture,  including the related  definitions  contained
therein.   The undersigned have examined the resolutions  adopted
by  the  Board  of  Directors  of the  Company  and  the  Pricing
Committee of the Company's Board of Directors.  In the opinion of
the  undersigned, the undersigned have made such  examination  or
investigation  as  is  necessary to  enable  the  undersigned  to
express  an  informed opinion as to whether or not the conditions
precedent  to  the establishment of (i) a series  of  Securities,
(ii)  the  forms  of  such  series of Securities  and  (iii)  the
procedures for the authentication and delivery of such series  of
Securities  contained in the Master Indenture have been  complied
with.   In  the opinion of the undersigned, such conditions  have
been complied with.

Dated as of:  February 23, 1998

                              AMRESCO, INC.


                              By:
                                Robert H. Lutz, Jr.
                                Chairman of the Board and
                                Chief Executive Officer


                              By:
                                Barry L. Edwards
                                Executive Vice President and
                                   Chief Financial Officer


                           EXHIBIT A

                          FORM OF NOTE

REGISTERED                                            No. 1998A-2

                         AMRESCO, INC.
    9.875% Series 1998-A, Senior Subordinated Notes due 2005

         Registered Principal Amount: $_______________
                     CUSIP No.:  031909AE4

     Unless  this  certificate  is  presented  by  an  authorized
representative  of  The  Depository Trust  Company,  a  New  York
corporation  ("DTC"), to the Company (as defined  below)  or  its
agent for registration of transfer, exchange or payment, and  any
certificate issued is registered in the name of Cede & Co. or  in
such  other name as requested by an authorized representative  of
DTC  (and  any  payment is made to Cede & Co. or  to  such  other
entity  as is requested by an authorized representative of  DTC),
ANY  TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR  OTHERWISE
BY  OR  TO  ANY  PERSON  IS WRONGFUL since the  registered  owner
hereof, Cede & Co., has an interest herein.

     This  Note  is a Global Security within the meaning  of  the
Indenture hereinafter referred to and is registered in  the  name
of  Cede  & Co., as a nominee for DTC.  This Note is exchangeable
for  Notes registered in the name of a Person other than  DTC  or
its  nominee only in the limited circumstances described  in  the
Indenture, and no transfer of this Note (other than a transfer of
this Note as a whole by DTC to a nominee of DTC or by any nominee
of DTC to DTC or another nominee of DTC) may be registered except
in such limited circumstances.

     AMRESCO,  INC.,  a corporation duly organized  and  existing
under  the  laws of Delaware (herein called the "Company",  which
term  includes any successor Person under the Indenture (as  such
term  is  defined  on the reverse hereof)), for  value  received,
hereby promises to pay to Cede & Co., or registered assigns,  the
principal   sum   of   ______________________  ($__________)   on
March  15,  2005,  and to pay interest thereon  semi-annually  on
March 15 and September 15 of each year (each an "Interest Payment
Date"),  from February 27, 1998, or from the most recent Interest
Payment  Date  to which interest has been paid or  duly  provided
for,  commencing September 15, 1998, at the rate  of  9.875%  per
annum,  until the principal hereof is paid or made available  for
payment.   The interest so payable, and punctually paid  or  duly
provided  for, on any Interest Payment Date will, as provided  in
such Indenture, be paid to the Person in whose name this Note  is
registered at the close of business on the first day of the month
(whether  or  not a Business Day) in which the relevant  Interest
Payment Date occurs.  If any Interest Payment Date does not  fall
on  a  Business  Day, any interest payment due on  such  Interest
Payment  Date  shall be made on the next succeeding Business  Day
with  the  same  force  and effect as if made  on  such  Interest
Payment  Date, and no interest shall be payable on such  interest
payment for the period from and after such Interest Payment  Date
through the date of such payment.  Any interest on this Note that
is  not  so  punctually paid or duly provided for will  forthwith
cease to be payable to the Holder on such date and may either  be
paid  to  the  Person in whose name this Note  (or  one  or  more
Predecessor  Notes) is registered at the close of business  on  a
Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to holders
of  the  Notes not less than 10 days prior to such Special Record
Date,  or  be  paid  at any time in any other lawful  manner  not
inconsistent with the requirements of any securities exchange  on
which  the  Notes may be listed, and upon such notice as  may  be
required  by  such exchange, all as more fully  provided  in  the
Indenture.

     Payment  of the principal of (and premium, if any)  and  any
interest due on this Note will be made at the office or agency of
the Company maintained for that purpose in same day funds, in the
City  of  Columbus, Ohio or New York, New York in  such  coin  or
currency  of  the  United States of America as  at  the  time  of
payment is legal tender for payment of public and private  debts.
So long as DTC or its nominee, Cede & Co., is the sole registered
Holder  of  this Note, such payments will be made by the  Trustee
directly to DTC or to such nominee.

     Reference is hereby made to the further provisions  of  this
Note  set  forth below, which further provisions  shall  for  all
purposes have the same effect as if set forth at this place.

     Unless  the  certificate of authentication hereon  has  been
executed  by  or on behalf of the Trustee referred  to  below  by
manual  signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

     IN  WITNESS  WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.

Dated:  February 27, 1998       AMRESCO, INC.


                              By:
                                Barry L. Edwards
                                Executive Vice President and
                                   Chief Financial Officer
Attest:


L. Keith Blackwell, Secretary

            TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the Securities of the  series  designated
therein and issued pursuant to the within-mentioned Indenture.
                                Bank One, N.A., as Trustee


                                By:
                                   Authorized Signatory

                         AMRESCO, INC.
    9.875% Series 1998-A Senior Subordinated Notes, due 2005

     This Note is one of a duly authorized issue of securities of
the Company (the "Securities") issued and to be issued in one  or
more  series  under a Subordinated Notes Indenture  dated  as  of
March 1, 1997, between the Company and Bank One, N.A., as Trustee
(the  "Trustee," which term includes any successor trustee  under
the   Subordinated  Notes  Indenture),  as  supplemented  by   an
Officers' Certificate and Company Order dated as of February  23,
1998,  pursuant to such Subordinated Notes Indenture establishing
the Notes (such Subordinated Notes Indenture, as supplemented  by
such Officer's Certificate and Company Order, being herein called
the "Indenture"), to which Indenture reference is hereby made for
a  statement  of  the respective rights, limitations  of  rights,
duties and immunities thereunder of the Company, the Trustee  and
the  Holders of the Notes and of the terms upon which  the  Notes
are,  and  are to be, authenticated and delivered.  This Security
is  one  of the series designated as 9.875% Series 1998-A  Senior
Subordinated  Notes due 2005 (the "Notes"), limited in  aggregate
principal amount to $350,000,000.  By the terms of the Indenture,
additional Securities of other separate series, which may vary as
to  date,  amount, Stated Maturity, interest rate  or  method  of
calculating  the interest rate and in other respects  as  therein
provided, may be issued in an unlimited principal amount.

     The  indebtedness evidenced by the Notes is, to  the  extent
and  in  the  manner provided in the Indenture,  subordinate  and
subject  in  right of payment to the prior payment  of  specified
obligations  to  holders  of  Senior  Debt,  as  defined  in  the
Indenture, and this Note is issued subject to such provisions and
each  Holder of this Note, by accepting the same, agrees  to  and
shall be bound by such provisions and authorizes the Trustee,  on
such Holder's behalf, to take such action as may be necessary  or
appropriate  to effectuate the subordination as provided  in  the
Indenture and appoints the Trustee his attorney-in-fact for  such
purpose.

     As  set  forth  in,  and subject to, the provisions  of  the
Indenture,  no  Holder of any Note of this series will  have  any
right  to  institute any proceeding, judicial or otherwise,  with
respect to the Indenture, or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless such
Holder  shall have previously given to the Trustee written notice
of  a continuing Event of Default with respect to the Notes,  the
Holders  of  not  less  than  25%  in  principal  amount  of  the
Outstanding Notes of this series shall have made written  request
to  the  Trustee  to institute proceedings in  its  own  name  as
Trustee,  furnished the Trustee reasonable indemnity, and  within
60 days the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Notes a direction
inconsistent with such request and shall have failed to institute
such proceeding; provided, however, that such limitations do  not
apply  to  a  suit  instituted  by  the  Holder  hereof  for  the
enforcement of payment of the principal of (and premium, if  any)
and  interest on this Note on or after the respective  due  dates
expressed herein.

     The  Notes  are  subject  to redemption,  at  the  Company's
option, at any time in whole, or from time to time in part, on or
after  March 15, 2002, and prior to maturity, upon not less  than
30 nor more than 60 days' prior notice mailed by first class mail
to  each  Holder's  last address as it appears  on  the  Security
Register,  at  the following redemption prices  (expressed  as  a
percentage of principal amount), plus accrued and unpaid interest
(if  any)  to  the date of redemption (subject to  the  right  of
Holders of record on the relevant record date that is on or prior
to  the  redemption date to receive interest due on  an  Interest
Payment  Date), if redeemed during the 12-month period commencing
March 15, of the years set forth below:

                                Redemption Price

               2002                          104.938%
               2003                          102.469%
               2004 and thereafter           100.000%

     The Notes are not subject to any sinking fund.

     In  accordance  with  the terms of the Indenture,  upon  the
occurrence  of a Repurchase Event, the Holder of this Note  shall
have  the right, at such Holder's option, to require the  Company
to  purchase, and upon exercise of such right, the Company  shall
purchase,  all or any part of this Note on the date  that  is  30
days  after  the date the Company gives notice of the  Repurchase
Event  at  a price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest; provided that  if  the
Repurchase Event is a Change of Control of the Company, the price
will  be  equal to 101% of the principal amount thereof, together
with accrued and unpaid interest.

     In  the event of redemption of this Note in part only, a new
Note or Notes of like tenor of an authorized denomination for the
unredeemed  portion  hereof will be issued in  the  name  of  the
Holder hereof upon the cancellation hereof, and, in the event  of
transfer or exchange, a new Note or Notes of like tenor and for a
like aggregate principal amount will be issued to the Holder,  in
the   case   of   exchange,  or  the  designated  transferee   or
transferees, in the case of transfer.

     If an Event of Default with respect to Notes shall occur and
be  continuing,  the principal of the Notes may (subject  to  the
conditions  set  forth  in the Indenture)  be  declared  due  and
payable  in  the  manner  and with the  effect  provided  in  the
Indenture.

     The Indenture contains provisions for defeasance at any time
of  the  Company's  obligations in  respect  of  (i)  the  entire
indebtedness  of this Note or (ii) certain restrictive  covenants
with  respect  to  this Note, in each case upon  compliance  with
certain conditions set forth therein.

     The  Indenture permits, with exceptions as therein provided,
the  amendment  thereof and the modification of  the  rights  and
obligations of the Company and the rights of the Holders  of  the
Securities  of each series to be affected under the Indenture  at
any  time by the Company and the Trustee with the consent of  the
Holders of not less than a majority in aggregate principal amount
of  the Securities at the time Outstanding of each series  to  be
affected  and, for certain purposes, without the consent  of  the
Holders of any Securities at the time Outstanding.  The Indenture
also  contains  provisions permitting the  Holders  of  specified
percentages  in aggregate principal amount of the  Securities  of
each series at the time Outstanding, on behalf of the Holders  of
all Securities of such series, to waive compliance by the Company
with  certain  provisions  of  the  Indenture  and  certain  past
defaults  under  the Indenture and their consequence.   Any  such
consent  or  waiver by the Holder of this Note  shall  bind  such
Holder  and  every future Holder of this Note  and  of  any  Note
issued  upon  the registration of transfer hereof or in  exchange
hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Note.

     No  reference  herein to the Indenture and no  provision  of
this  Note  or  of  the  Indenture  shall  alter  or  impair  the
obligation  of  the Company, which is absolute and unconditional,
to  pay  the  principal of (and premium, if any) and interest  on
this  Note  at  the times, place and rate, and  in  the  coin  or
currency, herein prescribed.

     The  Notes  are  issuable only in registered  form,  without
coupons,  in  denominations of $1,000 and any  amount  in  excess
thereof which is an integral multiple of $1,000.  As described in
the Indenture, the Notes may be issued as book-entry notes in the
form  of one fully registered Global Security bearing the  legend
specified  in  the  Indenture regarding certain  restrictions  on
registration  of  transfer and exchange, deposited  with,  or  on
behalf of, DTC, and registered in the name of DTC's nominee.   As
provided  in  the  Indenture, and subject to certain  limitations
(including additional limitations in the event that this Note  is
a  Global Security) therein set forth, Notes are exchangeable for
a like aggregate principal amount of Notes and of like tenor of a
different  authorized denomination, as requested  by  the  Holder
surrendering the same.

     As   provided  in  the  Indenture  and  subject  to  certain
limitations  therein set forth (including additional  limitations
in  the  event that this Note is a Global Security), the transfer
of  this  Note  is  registrable in the  Security  Register,  upon
surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of (and
premium,  if any) and interest on Note are payable, duly endorsed
by,  or  accompanied by a written instrument of transfer in  form
satisfactory  to  the  Company and the  Security  Registrar  duly
executed  by,  the Holder hereof or such Holder's  attorney  duly
authorized in writing and thereupon one or more new Notes of like
tenor  of  authorized denominations and for  the  same  aggregate
principal amount, will be issued to the designated transferee  or
transferees.

     No service charge shall be made for any such registration of
transfer  or exchange, but the Company may require payment  of  a
sum  sufficient  to  cover any tax or other  governmental  charge
payable in connection therewith.

     Prior  to  due presentment of this Note for registration  of
transfer,  the Company, the Trustee and any agent of the  Company
or  the  Trustee may treat the Person in whose name this Note  is
registered in the Security Register as the owner hereof  for  all
purposes,  whether or not this Note be overdue, and  neither  the
Company,  the  Trustee nor any such agent shall  be  affected  by
notice to the contrary.

     The  Notes  shall be governed by and construed in accordance
with the laws of the State of Texas.

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


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

(Name, Address, and Taxpayer Identification Number of Assignee)
this   Note   and  all  rights  thereunder,  hereby   irrevocably
constituting and appointing_______________________________attorney
to  transfer this  Note  on  the  books  of the Company  with  full
power  of substitution in the premises.

Dated:
Signature Guaranteed:                       (Signature)
                                Notice:  This signature  on  this
                                assignment  must correspond  with
                                the  name  as  written  upon  the
                                face   of  this  Note,  in  every
                                particular,  without   alteration
                                or   enlargement  or  any  change
                                whatsoever.



               OPTION OF HOLDER TO ELECT PURCHASE


     If  you want to elect to have this Security purchased by the
Company  pursuant to Sections 3.7 or 3.9 of the Indenture,  check
the box:
                               o

     If  you  want  to elect to have only part of  this  Security
purchased by the Company pursuant to Sections 3.7 or 3.9  of  the
Indenture, state the amount in principal amount (must be integral
multiple of $1,000):  $__________


Date:                    Your Signature:
                    (Sign  exactly  as your name appears  on  the
                    other side of the Security)


Signature Guarantee:
                 (Signature must be guaranteed)

The  signature(s)  should be guaranteed by an eligible  guarantor
institution  (banks, stockbrokers, savings and loan  associations
and  credit  unions  with  membership in  an  approved  signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.