Document:

Exhibit 4.1

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                        AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                            Dated as of June 1, 2000
                    -----------------------------------------

                Floating Rate Mortgage Pass-Through Certificates

                                  Series 2000-2

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<TABLE>
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                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE
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                                                     ARTICLE I

                                                    DEFINITIONS

<S>      <C>                                                                                                     <C>
         1.01.     Defined Terms..................................................................................4
                   Accrued Certificate Interest...................................................................4
                   Addition Notice................................................................................4
                   Adjustment Date................................................................................4
                   Affiliate......................................................................................4
                   Agreement......................................................................................5
                   Assignment.....................................................................................5
                   Available Distribution Amount..................................................................5
                   Bankruptcy Code................................................................................6
                   Bankruptcy Loss................................................................................6
                   Book-Entry Certificate.........................................................................6
                   Book-Entry Custodian...........................................................................6
                   Business Day...................................................................................6
                   Certificate....................................................................................6
                   Certificate Factor.............................................................................6
                   Certificateholder" or "Holder..................................................................6
                   Certificate Owner..............................................................................7
                   Certificate Principal Balance..................................................................7
                   Certificate Register" and "Certificate Registrar...............................................7
                   Class   .......................................................................................7
                   Class A Certificate............................................................................7
                   Class A Principal Distribution Amount..........................................................7
                   Class CE Certificate...........................................................................7
                   Class Exemption................................................................................7
                   Class M-1 Certificate..........................................................................7
                   Class M-1 Principal Distribution Amount........................................................8
                   Class M-2 Certificate..........................................................................8
                   Class M-2 Principal Distribution Amount........................................................8
                   Class M-3 Certificate..........................................................................8
                   Class M-3 Principal Distribution Amount........................................................8
                   Class P Certificate............................................................................9
                   Class R-I Certificate..........................................................................9
                   Class R-II Certificate.........................................................................9
                   Class R-III Certificates.......................................................................9
                   Closing Date...................................................................................9
                   Code    .......................................................................................9
                   Collection Account.............................................................................9
                   Commission.....................................................................................9
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SECTION                                                                                                        PAGE
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<S>                                                                                                              <C>
                   Corporate Trust Office.........................................................................9
                   Corresponding Certificate......................................................................9
                   Credit Enhancement Percentage.................................................................10
                   Cumulative Loss Percentage....................................................................10
                   Custodial Agreement...........................................................................10
                   Custodian.....................................................................................10
                   Cut-off Date..................................................................................10
                   Debt Service Reduction........................................................................10
                   Deficient Valuation...........................................................................10
                   Definitive Certificates.......................................................................10
                   Deleted Mortgage Loan.........................................................................10
                   Delinquency Percentage........................................................................11
                   Depositor.....................................................................................11
                   Depository....................................................................................11
                   Depository Institution........................................................................11
                   Depository Participant........................................................................11
                   Determination Date............................................................................11
                   Directly Operate..............................................................................11
                   Disqualified Organization.....................................................................12
                   Distribution Account..........................................................................12
                   Distribution Date.............................................................................12
                   Due Date......................................................................................12
                   Due Period....................................................................................12
                   Eligible Account..............................................................................12
                   ERISA   ......................................................................................12
                   Estate in Real Property.......................................................................12
                   Excess Overcollateralized Amount..............................................................13
                   Expense Adjusted Mortgage Rate................................................................13
                   Extraordinary Trust Fund Expense..............................................................13
                   Fannie Mae....................................................................................13
                   Funding Period................................................................................13
                   FDIC    ......................................................................................13
                   Final Recovery Determination..................................................................13
                   Fitch   ......................................................................................13
                   Freddie Mac...................................................................................13
                   Gross Margin..................................................................................13
                   Independent...................................................................................13
                   Independent Contractor........................................................................14
                   Index   ......................................................................................14
                   Initial Deposit...............................................................................14
                   Initial Mortgage Loan.........................................................................14
                   Insurance Proceeds............................................................................14
                   Interest Accrual Period.......................................................................14
                   Interest Carry Forward Amount.................................................................15

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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
                   Interest Coverage Account.....................................................................15
                   Interest Coverage Amount......................................................................15
                   Interest Determination Date...................................................................15
                   Interest Distribution Amount..................................................................15
                   Interest Remittance Amount....................................................................15
                   Late Collections..............................................................................15
                   Liquidation Event.............................................................................15
                   Liquidation Proceeds..........................................................................16
                   Loan-to-Value Ratio...........................................................................16
                   London Business Day...........................................................................16
                   Majority Class CE Certificateholder...........................................................16
                   Master Servicer...............................................................................16
                   Master Servicer Event of Default..............................................................16
                   Master Servicer Prepayment Charge Payment Amount..............................................16
                   Master Servicer Remittance Date...............................................................16
                   Master Servicer Termination Test..............................................................16
                   Maximum I-LT6 Uncertificated Interest Deferral Amount.........................................16
                   Maximum Mortgage Rate.........................................................................17
                   Mezzanine Certificate.........................................................................17
                   Minimum Mortgage Rate.........................................................................17
                   Monthly Payment...............................................................................17
                   Moody's ......................................................................................17
                   Mortgage......................................................................................17
                   Mortgage File.................................................................................17
                   Mortgage Loan.................................................................................17
                   Mortgage Loan Purchase Agreement..............................................................17
                   Mortgage Loan Schedule........................................................................17
                   Mortgage Note.................................................................................19
                   Mortgage Pool.................................................................................19
                   Mortgage Rate.................................................................................19
                   Mortgaged Property............................................................................19
                   Mortgagor.....................................................................................19
                   Net Monthly Excess Cashflow...................................................................20
                   Net Mortgage Rate.............................................................................20
                   Net WAC Pass-Through Rate.....................................................................20
                   New Lease.....................................................................................20
                   Nonrecoverable P&I Advance....................................................................20
                   Nonrecoverable Servicing Advance..............................................................20
                   Non-United States Person......................................................................20
                   Notional Amount...............................................................................20
                   Officers' Certificate.........................................................................21
                   One-Month LIBOR...............................................................................21
                   One-Month LIBOR Pass-Through Rate.............................................................21
                   Opinion of Counsel............................................................................22

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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
                   Original Pre-Funded Amount....................................................................22
                   Originator....................................................................................22
                   Overcollateralized Amount.....................................................................22
                   Overcollateralization Deficiency Amount.......................................................22
                   Overcollateralization Increase Amount.........................................................22
                   Overcollateralization Reduction Amount........................................................23
                   Ownership Interest............................................................................23
                   Pass-Through Rate.............................................................................23
                   Percentage Interest...........................................................................24
                   Periodic Rate Cap.............................................................................24
                   Permitted Investments.........................................................................24
                   Permitted Transferee..........................................................................25
                   Person  ......................................................................................25
                   P&I Advance...................................................................................25
                   Plan    ......................................................................................26
                   Pre-Funding Account ..........................................................................26
                   Prepayment Assumption.........................................................................26
                   Prepayment Charge.............................................................................26
                   Prepayment Charge Schedule....................................................................26
                   Prepayment Interest Shortfall.................................................................27
                   Prepayment Period.............................................................................27
                   Principal Distribution Amount.................................................................27
                   Principal Prepayment..........................................................................28
                   PTCE    ......................................................................................28
                   Purchase Price................................................................................28
                   Qualified Substitute Mortgage Loan............................................................28
                   Rating Agency or Rating Agencies..............................................................29
                   Realized Loss.................................................................................29
                   Record Date...................................................................................30
                   Reference Banks...............................................................................30
                   Refinanced Mortgage Loan......................................................................30
                   Regular Certificate...........................................................................31
                   Regular Interest..............................................................................31
                   Relief Act....................................................................................31
                   Relief Act Interest Shortfall.................................................................31
                   REMIC   ......................................................................................31
                   REMIC I ......................................................................................31
                   REMIC I Interest Loss Allocation Amount.......................................................31
                   REMIC I Overcollateralized Amount.............................................................31
                   REMIC I Principal Loss Allocation Amount......................................................32
                   REMIC I Regular Interest......................................................................32
                   REMIC I Regular Interest I-LT1................................................................32
                   REMIC I Regular Interest I-LT2................................................................32
                   REMIC I Regular Interest I-LT3................................................................32
</TABLE>

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<TABLE>
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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
                   REMIC I Regular Interest I-LT4................................................................32
                   REMIC I Regular Interest I-LT5................................................................33
                   REMIC I Regular Interest I-LT6................................................................33
                   REMIC I Regular Interest I-LTP................................................................33
                   REMIC I Remittance Rate.......................................................................33
                   REMIC I Required Overcollateralized Amount....................................................33
                   REMIC II......................................................................................33
                   REMIC II Regular Interest.....................................................................33
                   REMIC II Regular Interest II-LT1".............................................................33
                   REMIC II Regular Interest II-LT2".............................................................34
                   REMIC II Regular Interest II-LT3".............................................................34
                   REMIC II Regular Interest II-LT4".............................................................34
                   REMIC II Regular Interest II-LT5".............................................................34
                   REMIC II Regular Interest II-LT6".............................................................34
                   REMIC II Regular Interest II-LTP..............................................................34
                   REMIC II Regular Interest II-LT2S.............................................................35
                   REMIC II Regular Interest II-LT3S.............................................................35
                   REMIC II Regular Interest II-LT4S.............................................................35
                   REMIC II Regular Interest II-LT5S.............................................................35
                   REMIC II Remittance Rate......................................................................35
                   REMIC III.....................................................................................35
                   REMIC III Certificate.........................................................................35
                   REMIC III Certificateholder...................................................................35
                   REMIC Provisions..............................................................................35
                   Remittance Report.............................................................................36
                   Rents from Real Property......................................................................36
                   REO Account...................................................................................36
                   REO Disposition...............................................................................36
                   REO Imputed Interest..........................................................................36
                   REO Principal Amortization....................................................................36
                   REO Property..................................................................................36
                   Request for Release...........................................................................36
                   Required Overcollateralized Amount............................................................36
                   Reserve Interest Rate.........................................................................37
                   Residential Dwelling..........................................................................37
                   Residual Certificate..........................................................................37
                   Residual Interest.............................................................................37
                   Responsible Officer...........................................................................37
                   Scheduled Principal Balance...................................................................37
                   Senior Interest Distribution Amount...........................................................38
                   Servicing Account.............................................................................38
                   Servicing Advances............................................................................38
                   Servicing Fee.................................................................................38
                   Servicing Fee Rate............................................................................38
</TABLE>

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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
                   Servicing Officer.............................................................................38
                   Single Certificate............................................................................39
                   S&P     ......................................................................................39
                   Startup Day...................................................................................39
                   Stated Principal Balance......................................................................39
                   Stayed Funds..................................................................................40
                   Stepdown Date.................................................................................40
                   Subsequent Cut-off Date.......................................................................40
                   Subsequent Mortgage Loan......................................................................40
                   Subsequent Mortgage Loan Purchase Agreement...................................................40
                   Subsequent Transfer Date......................................................................40
                   Subsequent Transfer Instrument................................................................40
                   Sub-Servicer..................................................................................40
                   Sub-Servicing Account.........................................................................40
                   Sub-Servicing Agreement.......................................................................40
                   Substitution Shortfall Amount.................................................................40
                   Tax Returns...................................................................................40
                   Telerate Page 3750............................................................................41
                   Termination Price.............................................................................41
                   Terminator....................................................................................41
                   Transfer......................................................................................41
                   Transferee....................................................................................41
                   Transferor....................................................................................41
                   Trigger Event.................................................................................41
                   Trust Fund....................................................................................41
                   Trustee ......................................................................................41
                   Trustee's Fee.................................................................................41
                   Trustee's Fee Rate............................................................................41
                   Uncertificated Balance........................................................................41
                   Uncertificated Corresponding Component........................................................42
                   Uncertificated Interest.......................................................................42
                   Uncertificated Notional Amount................................................................42
                   Uninsured Cause...............................................................................43
                   United States Person..........................................................................43
                   Value   ......................................................................................43
                   Verification Fee..............................................................................43
                   Voting Rights.................................................................................43
         1.02.     Allocation of Certain Interest Shortfalls.....................................................44
</TABLE>

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
         2.01.     Conveyance of Mortgage Loans..................................................................45
         2.02.     Acceptance of REMIC I by the Trustee..........................................................47
         2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or the Depositor;
                   Payment of Prepayment Charges in the event of breach..........................................48
         2.04.     [Reserved]....................................................................................51
         2.05.     Representations, Warranties and Covenants of the Master Servicer..............................51
         2.06.     Issuance of Class R-I Certificates............................................................54
         2.07.     Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by the Trustee
                                                                                                                 54
         2.08.     Issuance of Class R-II Certificates...........................................................54
         2.09.     Conveyance of REMIC II Regular Interests; Acceptance of REMIC III by the
                   Trustee.......................................................................................55
         2.10.     Issuance of REMIC III Certificates............................................................55
         2.11.     Conveyance of the Subsequent Mortgage Loans...................................................55

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         3.01.     Master Servicer to Act as Master Servicer.....................................................58
         3.02.     Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................59
         3.03.     Successor Sub-Servicers.......................................................................60
         3.04.     Liability of the Master Servicer..............................................................61
         3.05.     No Contractual Relationship Between Sub-Servicers and
                   Trustee or Certificateholders.................................................................61
         3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee..............................61
         3.07.     Collection of Certain Mortgage Loan Payments..................................................62
         3.08.     Sub-Servicing Accounts........................................................................62
         3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................63
         3.10.     Collection Account and Distribution Account...................................................64
         3.11.     Withdrawals from the Collection Account and Distribution Account..............................66
         3.12.     Investment of Funds in the Pre-Funding Account, the Interest Coverage
                   Account, the Collection Account and the Distribution Account..................................68
         3.13.     [intentionally omitted].......................................................................69
         3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                   Fidelity Coverage.............................................................................70
         3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................71
         3.16.     Realization Upon Defaulted Mortgage Loans.....................................................72
         3.17.     Trustee to Cooperate; Release of Mortgage Files...............................................74
         3.18.     Servicing Compensation........................................................................75
         3.19.     Reports to the Trustee; Collection Account Statements.........................................76
         3.20.     Statement as to Compliance....................................................................76
         3.21.     Independent Public Accountants' Servicing Report..............................................76

</TABLE>

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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
         3.22.     Access to Certain Documentation...............................................................77
         3.23.     Title, Management and Disposition of REO Property.............................................77
         3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest
                   Shortfalls....................................................................................80
         3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates
                   and Monthly Payments..........................................................................81
         3.26.     Advance Facility..............................................................................81

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

         4.01.     Distributions.................................................................................82
         4.02.     Statements to Certificateholders..............................................................88
         4.03.     Remittance Reports; P&I Advances..............................................................91
         4.04.     Allocation of Realized Losses.................................................................93
         4.05.     Compliance with Withholding Requirements......................................................95
         4.06.     Commission Reporting..........................................................................95
         4.07.     Pre-Funding Account...........................................................................96
         4.08.     Interest Coverage Account.....................................................................97

                                                     ARTICLE V

                                                 THE CERTIFICATES

         5.01.     The Certificates..............................................................................99
         5.02.     Registration of Transfer and Exchange of Certificates........................................101
         5.03.     Mutilated, Destroyed, Lost or Stolen Certificates............................................106
         5.04.     Persons Deemed Owners........................................................................106
         5.05.     Certain Available Information................................................................106

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER

         6.01.     Liability of the Depositor and the Master Servicer...........................................108
         6.02.     Merger or Consolidation of the Depositor or the Master Servicer..............................108
         6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others.....................108
         6.04.     Limitation on Resignation of the Master Servicer.............................................109
         6.05.     Rights of the Depositor in Respect of the Master Servicer....................................110

                                                    ARTICLE VII

                                                      DEFAULT

         7.01.     Master Servicer Events of Default............................................................111
         7.02.     Trustee to Act; Appointment of Successor.....................................................113
         7.03.     Notification to Certificateholders...........................................................115
         7.04.     Waiver of Master Servicer Events of Default..................................................115

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE

         8.01.     Duties of Trustee............................................................................116
         8.02.     Certain Matters Affecting the Trustee........................................................117
         8.03.     Trustee Not Liable for Certificates or Mortgage Loans........................................118
         8.04.     Trustee May Own Certificates.................................................................118
         8.05.     Trustee's Fees and Expenses..................................................................118
         8.06.     Eligibility Requirements for Trustee.........................................................119
         8.07.     Resignation and Removal of the Trustee.......................................................119
         8.08.     Successor Trustee............................................................................120
         8.09.     Merger or Consolidation of Trustee...........................................................121
         8.10.     Appointment of Co-Trustee or Separate Trustee................................................121
         8.11.     Appointment of Custodians....................................................................122
         8.12.     Appointment of Office or Agency..............................................................122
         8.13.     Representations and Warranties of the Trustee................................................122

                                                    ARTICLE IX

                                                    TERMINATION

         9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................124
         9.02      Additional Termination Requirements..........................................................126

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         10.01.    REMIC Administration.........................................................................127
         10.02.    Prohibited Transactions and Activities.......................................................129
         10.03.    Master Servicer and Trustee Indemnification..................................................130

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
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SECTION                                                                                                        PAGE
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<S>                                                                                                             <C>
         11.01.    Amendment....................................................................................131
         11.02.    Recordation of Agreement; Counterparts.......................................................132
         11.03.    Limitation on Rights of Certificateholders...................................................132
         11.04.    Governing Law................................................................................133
         11.05.    Notices......................................................................................133
         11.06.    Severability of Provisions...................................................................134
         11.07.    Notice to Rating Agencies....................................................................134
         11.08.    Article and Section References...............................................................135
         11.09.    Grant of Security Interest...................................................................135
</TABLE>

<TABLE>
<CAPTION>
         EXHIBITS

<S>                        <C>
         Exhibit A-1       Form of Class A Certificate
         Exhibit A-2       Form of Class M-1 Certificate
         Exhibit A-3       Form of Class M-2 Certificate
         Exhibit A-4       Form of Class M-3 Certificate
         Exhibit A-5       Form of Class CE Certificate
         Exhibit A-6       Form of Class P Certificate
         Exhibit A-7       Form of Class R-I Certificate
         Exhibit A-8       Form of Class R-II Certificate
         Exhibit A-9       Form of Class R-III Certificate
         Exhibit B         [Reserved]
         Exhibit C-1       Form of Trustee's Initial Certification
         Exhibit C-2       Form of Trustee's Interim Certification
         Exhibit C-2       Form of Trustee's Final Certification
         Exhibit D         Form of Mortgage Loan Purchase Agreement
         Exhibit E-1       Request for Release
         Exhibit E-2       Request for Release Mortgage Loans paid in full
         Exhibit F-1       Form of Transferor Representation Letter and Form of Transferee
                           Representation Letter in Connection with Transfer of Class CE  and Class P
                           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
         Exhibit H         Form of Custodial Agreement
         Exhibit I         Form of Subsequent Transfer Instrument
         Exhibit J         Form of Addition Notice
         Schedule 1        Mortgage Loan Schedule
         Schedule 2        Prepayment Charge Schedule
</TABLE>

<PAGE>

                   This Pooling and Servicing Agreement, is dated and effective
as of June 1, 2000, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and NORWEST 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
each REMIC (as defined herein) created hereunder. The Trust Fund will consist of
a segregated pool of assets consisting of the Mortgage Loans, the Pre-Funding
Account and the Interest Coverage Account and certain other related assets
subject to this Agreement.

                   As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than the Master Servicer Prepayment Charge Payment Amount,
the Pre-Funding Account and the Interest Coverage Account) subject to this
Agreement as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC I." The Class R-I Certificates will be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the REMIC I Remittance Rate, the initial Uncertificated Balance
and, solely for purposes of satisfying Treasury regulation Section 1.860G-
1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests (as defined herein). None of the REMIC I Regular Interests
will be certificated.
<TABLE>
<CAPTION>

                                       REMIC I                       Initial                    Latest Possible
        Designation                Remittance Rate            Uncertificated Balance            Maturity Date(1)
        -----------                ---------------            ----------------------            ----------------
<S>                                  <C>                        <C>                              <C>
           I-LT1                     Variable(2)                $641,899,902.00                  July 15, 2030
           I-LT2                     Variable(2)                  $5,240,000.00                  July 15, 2030
           I-LT3                     Variable(2)                    $540,375.00                  July 15, 2030
           I-LT4                     Variable(2)                    $294,750.00                  July 15, 2030
           I-LT5                     Variable(2)                    $311,125.00                  July 15, 2030
           I-LT6                     Variable(2)                  $6,713,748.00                  July 15, 2030
           I-LTP                     Variable(2)                        $100.00                  July 15, 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 REMIC I Regular Interest.

(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Certificates will

<PAGE>

evidence the sole class of "residual interests" in REMIC II for purposes of the
REMIC Provisions. The following table irrevocably sets forth the designation,
the REMIC II Remittance Rate, the initial Uncertificated Balance and, solely for
purposes of satisfying Treasury regulation Section
1.860G-
1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC II
Regular Interests. None of the REMIC II Regular Interests will be certificated.
<TABLE>
<CAPTION>

                                    REMIC II                      Initial                     Latest Possible
      DESIGNATION                REMITTANCE RATE           UNCERTIFICATED BALANCE            MATURITY DATE(1)
      -----------                ---------------           ----------------------            ----------------
<S>                               <C>                      <C>                                <C>
         II-LT1                    Variable(2)                $641,899,902.00                  July 15, 2030
         II-LT2                    Variable(2)                  $5,240,000.00                  July 15, 2030
         II-LT3                    Variable(2)                    $540,375.00                  July 15, 2030
         II-LT4                    Variable(2)                    $294,750.00                  July 15, 2030
         II-LT5                    Variable(2)                    $311,125.00                  July 15, 2030
         II-LT6                    Variable(2)                  $6,713,748.00                  July 15, 2030
         II-LTP                    Variable(2)                        $100.00                  July 15, 2030
        II-LT2S                    Variable(2)                      (3)                        July 15, 2030
        II-LT3S                    Variable(2)                      (3)                        July 15, 2030
        II-LT4S                    Variable(2)                      (3)                        July 15, 2030
        II-LT5S                    Variable(2)                      (3)                        July 15, 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 REMIC II Regular Interest.

(2)  Calculated in accordance with the definition of "REMIC II Remittance Rate"
     herein.

(3)  This REMIC II Regular Interest has no Uncertificated Balance but will
     accrue interest at the related REMIC II Remittance Rate on the related
     Uncertificated Notional Amount, which is equal to the Uncertificated
     Balance of the Uncertificated Corresponding Component.

<PAGE>

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III." The Class R-III Certificates will evidence the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, the Pass- Through Rate, the initial aggregate Certificate
Principal Balance and, solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for the
indicated classes of Certificates.

<TABLE>
<CAPTION>

                                                                  Initial Aggregate               Latest Possible
     DESIGNATION                       PASS-THROUGH RATE    CERTIFICATE PRINCIPAL BALANCE        MATURITY DATE(1)
     -----------                       -----------------    -----------------------------        ----------------
<S>                                     <C>                  <C>                                  <C>
    Class A                              Variable(2)             $524,000,000.00                   July 15, 2030
    Class M-1                            Variable(2)              $54,037,500.00                   July 15, 2030
    Class M-2                            Variable(2)              $29,475,000.00                   July 15, 2030
    Class M-3                            Variable(2)              $31,112,500.00                   July 15, 2030
    Class CE                             Variable(3)              $16,374,900.00                   July 15, 2030
    Class P                                 N/A(4)                       $100.00                   July 15, 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 Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates.

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

(3)  The Class CE Certificates will accrue interest at their variable
     Pass-Through Rate on the Notional Amount of the Class CE Certificates
     outstanding from time to time which shall equal the Uncertificated Balance
     of REMIC II Regular Interests. The Class CE Certificates will not accrue
     interest on their Certificate Principal Balance.

(4)  The Class P Certificates will not accrue interest.

                  As of the Cut-off Date, the Initial Mortgage Loans had an
aggregate Scheduled Principal Balance equal to $500,326,976.55. The amount
deposited by the Depositor in the Pre- Funding Account on the Closing Date is
the Original Pre-Funded Amount.

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

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

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

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates and the Mezzanine
Certificates will be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Accrual Period. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate or Class CE Certificate, shall be reduced by an amount
equal to the portion allocable to such Certificate pursuant to Section 1.02
hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if any,
for such Distribution Date to the extent not covered by payments pursuant to
Section 3.24 and (b) the aggregate amount of any Relief Act Interest Shortfall,
if any, for such Distribution Date. In addition, Accrued Certificate Interest
with respect to each Distribution Date, as to any Class CE Certificate, shall be
reduced by an amount equal to the portion allocable to such Class CE Certificate
of Realized Losses, if any, pursuant to Section 4.04 hereof.

                  "Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.11, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the related Subsequent Cut-off Date. The Addition Notice shall be given not
later than three Business Days prior to the related Subsequent Transfer Date and
shall be substantially in the form of Exhibit J.

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

                  "Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the

<PAGE>

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 (excepting therefrom if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee's name), 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": With respect to 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, (e) the aggregate of any advances made by the Trustee for such
Distribution Date pursuant to Section 7.02(b), (f) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre-Funding Account after giving effect to any purchase of
Subsequent Mortgage Loans, (g) with respect to each Distribution Date during the
Funding Period and on the Distribution Date immediately following the end of the
Funding Period, any amounts withdrawn by the Trustee from the Interest Coverage
Account for distribution on the Certificates and (h) with respect to the initial
Distribution Date, the Initial Deposit, 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 Originator or any Sub-Servicer pursuant to Section
3.11 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, (vii) amounts deposited in the Collection
Account or the Distribution Account in error and (viii) the amount of any
Prepayment Charges collected by the Master Servicer in connection with the
voluntary Principal Prepayment in full of any of the Mortgage Loans (or any
Master Servicer Prepayment Charge Payment Amount) 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.

<PAGE>

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

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

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

                  "Certificate": Any one of the Depositor's Floating Rate
Mortgage Pass-Through Certificates, Series 2000-2, Class A, Class M-1, Class
M-2, Class M-3, Class CE, Class P, Class R-I, Class R-II or Class R-III, issued
under this Agreement.

                  "Certificate Factor": With respect to any Class of Regular
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 (and in the case of the Class CE Certificates, the Notional
Amount) of such Class of Certificates on such Distribution Date (after giving
effect to any distributions of principal and allocations of Realized Losses in
reduction of the Certificate Principal Balance (and in the case of the Class CE
Certificates, the 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 (and in the case of the Class CE Certificates, the
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.

<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 each Class A
Certificate, Mezzanine Certificate or Class P 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, minus all
distributions allocable to principal made thereon and in the case of a Mezzanine
Certificate, Realized Losses allocated thereto on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the first Distribution Date, the initial Certificate Principal Balance
of such Certificate, as stated on the face thereof). With respect to each Class
CE Certificate as of any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times the excess, if any, of
(A) the then aggregate Uncertificated Balances of the REMIC II Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.

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

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

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

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 60.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period minus $4,912,500.

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

                  "Class Exemption": A class exemption granted by the DOL, which
provides relief from certain of the prohibited transaction provisions of ERISA
and the related excise tax provisions of the Code.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form

<PAGE>

annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
76.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$4,912,500.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 85.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $4,912,500.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $4,912,500.

<PAGE>

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

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

                  "Class R-II Certificate": Any one of the Class R-II
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-8
and evidencing the Residual Interest in REMIC II for purposes of the REMIC
Provisions.

                  "Class R-III Certificates": Any one of the Class R-III
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-9
and evidencing the Residual Interest in REMIC III for purposes of the REMIC
Provisions.

                  "Closing Date":  June 23, 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 "Ameriquest Mortgage Company, as Master Servicer for Norwest Bank
Minnesota, National Association, as Trustee, in trust for the registered holders
of Ameriquest Mortgage Securities Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 2000-2" 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 Street and Marquette
Avenue, Minneapolis, Minnesota 55479, 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.

                  "Corresponding Certificate": With respect to REMIC I Regular
Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4,
REMIC I Regular Interest I-LT5 and REMIC I Regular Interest I-LTP, the Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates and Class P Certificates, respectively. With respect to REMIC II
Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular
Interest II-LT4, REMIC II Regular Interest II-LT5 and REMIC II Regular Interest
II-LTP, the Class A Certificates,

<PAGE>

Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates and Class
P Certificates, respectively.

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class CE Certificates, and the denominator of which is the sum of (i) the
aggregate Stated Principal Balance of the Mortgage Loans and (ii) the amount on
deposit in the Pre-Funding Account as of the last day of the related Due Period,
exclusive of investment earnings therein, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date.

                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount.

                  "Custodial Agreement": An agreement that may be entered into
among the Depositor, the Master Servicer, the Trustee and a Custodian in the
form of Exhibit H annexed hereto or an agreement assigned to the Trustee with
respect to the Mortgage Loans.

                  "Custodian": A Custodian, which shall not be the Depositor,
the Master Servicer or any affiliate of any of them, appointed pursuant to a
Custodial Agreement.

                  "Cut-off Date": With respect to each Initial Mortgage Loan,
June 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.

<PAGE>

                  "Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month; provided, however, that any Mortgage Loan purchased
by the Master Servicer pursuant to Section 3.16(c) shall not be included in
either the numerator or the denominator for purposes of calculating the
Delinquency Percentage.

                  "Depositor": Ameriquest Mortgage Securities 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 F-1+ by Fitch (if rated by Fitch), P-1 by Moody's and A-1 by S&P (or
comparable ratings if Fitch, Moody's and S&P are not the Rating Agencies).

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

                  "Determination Date": With respect to each Distribution Date,
the 1st day of the calendar month in which such Distribution Date occurs or, if
such 1st day is not a Business Day, the Business Day immediately preceding such
1st 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 REMIC I 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.

<PAGE>

                  "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" 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 any of REMIC I, REMIC II or REMIC
III 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 "Norwest Bank Minnesota, National Association, as Trustee, in trust for
the registered holders of Ameriquest Mortgage Securities Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 2000-2." The Distribution Account
must be an Eligible Account.

                  "Distribution Date": The 15th day of any month, or if such
15th day is not a Business Day, the Business Day immediately following such 15th
day, commencing in July 2000.

                  "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.

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated "AAA" or "F-1+", as applicable, by
Fitch, P-1 by Moody's and A-1+ by S&P (or comparable ratings if
Fitch,
Moody's and S&P are not the Rating Agencies) at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC 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.

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

<PAGE>

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
over (ii) the Required Overcollateralized Amount for such Distribution Date.

                  "Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the sum of
(i) the Trustee's Fee Rate and (ii) the Servicing Fee Rate.

                  "Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii) and
any amounts payable by the Trustee for the recording of the assignments of
mortgage pursuant to Section 2.01.

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

                  "Funding Period": The period beginning on the Closing Date and
ending on the earlier of the date on which (a) the amount on deposit in the
Pre-Funding Account is reduced to zero or (b) 2:00 p.m., New York City time, on
July 24, 2000.

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

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

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

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

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

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Originator and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Originator, the Master Servicer or any Affiliate thereof, and

<PAGE>

(c) is not connected with the Depositor, the Originator, 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 Originator,
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
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I 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 REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I 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.

                  "Index": With respect to each Mortgage Loan and each related
Adjustment Date, the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available as of the first business day 45 days or
more prior to such Adjustment Date, as specified in the related Mortgage Note.

                  "Initial Deposit": $149,406.58 in cash to be deposited by the
Depositor in the Interest Coverage Account on or before the Closing Date, which
represents with respect to each Initial Mortgage Loan having a first payment due
date in August 2000, interest accrued at the Net Mortgage Rate for each such
Mortgage Loan for the initial Interest Accrual Period. The Initial Deposit shall
be an asset of the Trust Fund but not of any REMIC.

                  "Initial Mortgage Loan": Any of the Mortgage Loans included in
REMIC I as of the Closing Date.

                  "Insurance Proceeds": Proceeds of any 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 the Class A Certificates, the Mezzanine Certificates and each
uncertificated Regular Interest, the period commencing on the Distribution Date
of the month immediately preceding the month in which such

<PAGE>

Distribution Date occurs (or, in the case of the first Distribution Date,
commencing on the Closing Date) and ending on the day preceding such
Distribution Date.

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and any Class of Class A Certificates or Mezzanine
Certificates, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class of Certificates as of the immediately
preceding Distribution Date exceeded (b) the actual amount distributed on such
Class of Certificates in respect of interest on such immediately preceding
Distribution Date and (ii) the amount of any Interest Carry Forward Amount for
such Class of Certificates remaining unpaid from the previous Distribution Date,
plus accrued interest on such sum calculated at the related Pass-Through Rate
for the most recently ended Interest Accrual Period.

                  "Interest Coverage Account": The account established and
maintained pursuant to Section 4.08.

                  "Interest Coverage Amount": The amount to be paid by the
Depositor to the Trustee for deposit into the Interest Coverage Account on the
Closing Date pursuant to Section 4.08, which amount is $944,472.15.

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates and any uncertificated Regular
Interest, and any Interest Accrual Period therefor, the second London Business
Day preceding the commencement of such Interest Accrual Period.

                  "Interest Distribution Amount": With respect to any
Distribution Date, any Class A Certificate, any Mezzanine Certificate and any
Class CE Certificate, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.

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

                  "Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such 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 REMIC I 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 REMIC I by reason of its being purchased pursuant to
Section 9.01.

<PAGE>

                  "Liquidation Proceeds": The amount (other than 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-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.

                  "London Business Day": Any day on which banks in the City of
London are open and conducting transactions in United States dollars.

                  "Majority Class CE Certificateholder": Any single Holder or
group of Holders of Class CE Certificates representing a greater than 50%
Percentage Interest in such Class.

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

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the last Business Day preceding
the related Distribution Date.

                  "Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 8th day of the calendar month
in which such Distribution Date occurs or, if such 8th day is not a Business
Day, the Business Day immediately succeeding such 8th day.

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.00%.

                  "Maximum I-LT6 Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LT6 for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LT6 minus the REMIC I Overcollateralized Amount, in each case
for such Distribution Date, over (ii) Uncertificated Interest on REMIC II
Regular Interest II- LT2, REMIC II Regular Interest II-LT3, REMIC II Regular
Interest II-LT4 and REMIC II Regular Interest II-LT5 for such Distribution Date.

<PAGE>

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

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

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

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

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

                  "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
held from time to time held as a part of REMIC I, the Mortgage Loans so held
being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreement between the
Originator and the Depositor, regarding the transfer of the Mortgage Loans by
the Originator to or at the direction of the Depositor, substantially in the
form of Exhibit D-2 annexed hereto.

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

              (i)   the Originator's Mortgage Loan identifying number;

              (ii)  the Mortgagor's name;

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

<PAGE>

              (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 Loan-to-Value Ratio at origination;

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

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

              (x)   the stated maturity date;

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

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

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

              (xiv) the Scheduled Principal Balance of the Mortgage Loan as of
                    the close of business on the Cut-off Date (or the related
                    Subsequent Cut-off Date, with respect to a Subsequent
                    Mortgage Loan);

              (xv) the Gross Margin;

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

            (xvii) the Maximum Mortgage Rate;

           (xviii) the Minimum Mortgage Rate;

             (xix) the Mortgage Rate at origination;

              (xx) the Periodic Rate Cap and the maximum first Adjustment Date
                   Mortgage Rate adjustment;

             (xxi) a code indicating the documentation program (I.E., Full
                   Documentation, Fast Trac or Stated Income);

            (xxii) the first Adjustment Date immediately following the Cut-off
                   Date;

<PAGE>

              (xxiii) the risk grade;

              (xxiv)  the Value of the Mortgaged Property; and

              (xxv) the sale price of the Mortgaged Property, if applicable.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan): (1) the number of Mortgage Loans; (2) the current principal balance of
the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Depositor in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, the 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, 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, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage
Rate in effect immediately following the Cut-off Date (or Subsequent Cut-off
Date, with respect to a Subsequent Mortgage Loan) and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in
the Mortgage Note, of the Index, as most recently available as of a date prior
to the Adjustment Date as set forth in the related Mortgage Note, plus the
related Gross Margin; provided that the Mortgage Rate on such Mortgage Loan on
any Adjustment Date shall never be more than the lesser of (i) the sum of the
Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.

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

                  "Mortgagor":  The obligor on a Mortgage Note.

<PAGE>

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amount payable to the holders of the Class
A Certificates and the Interest Distribution Amounts payable to the Mezzanine
Certificates and (B) the sum of the amounts described in clauses (b)(i) through
(iii) of the definition of Principal Distribution Amount.

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

                  "Net WAC Pass-Through Rate": With respect to each of the REMIC
I Regular Interests, REMIC II Regular Interest II-LT1, REMIC II Regular Interest
II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest II-LT4,
REMIC II Regular Interest II-LT5, REMIC II Regular Interest II-LT6, REMIC II
Regular Interest II-LTP, the Class A Certificates and the Mezzanine Certificates
and any Distribution Date, a rate per annum equal to the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans and REO
Properties, weighted based on their Scheduled Principal Balances as of the first
day of the calendar month preceding the month in which the Distribution Date
occurs multiplied by a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

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

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

                  "Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, 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": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC II Regular
Interests (other than the Uncertificated Balance of REMIC II Regular Interest
II-LTP) for such Distribution Date.

<PAGE>

                  "Officers' Certificate": With respect to the Depositor, 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. 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.

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular Interest
II-LT5 and any Interest Accrual Period therefor, the rate determined by the
Trustee on the related Interest Determination Date on the basis of the offered
rate for one-month U.S. dollar deposits, as such rate appears on Telerate Page
3750 as of 11:00 a.m. (London time) on such Interest Determination Date;
provided that if such rate does not appear on Telerate Page 3750, the rate for
such date will be determined on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. In such event, the Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If on such Interest Determination Date, two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 1/16%). If on such
Interest Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Trustee shall select an alternative
comparable index (over which the Trustee has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.

                  "One-Month LIBOR Pass-Through Rate": With respect to the Class
A Certificates and REMIC II Regular Interest II-LT2 and any Distribution Date, a
per annum rate equal to One- Month LIBOR plus 0.300%, in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
remaining in the Trust Fund is reduced to less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre- Funded Amount, or One-Month LIBOR plus
0.600%, in the case of any Distribution Date thereafter.

                  With respect to the Class M-1 Certificates and REMIC II
Regular Interest II-LT3 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 0.650%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount, or One-Month LIBOR plus 0.975%, in the case of any Distribution Date
thereafter.

<PAGE>

                  With respect to the Class M-2 Certificates and REMIC II
Regular Interest II-LT4 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 1.050%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and the Original Pre-Funded Amount, or One-Month LIBOR
plus 1.575%, in the case of any Distribution Date thereafter.

                  With respect to the Class M-3 Certificates and REMIC II
Regular Interest II-LT5 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 2.402%, in the case of each Distribution Date through and
including the Distribution Date on which the sum of the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties remaining in the
Trust Fund is reduced to less than 10% of the sum of the aggregate Stated
Principal Balance of the Initial Mortgage Loans as of the Cut-off Date and the
Original Pre-Funded Amount, or One-Month LIBOR plus 3.603%, in the case of any
Distribution Date thereafter.

                  "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 any of REMIC I, REMIC II or REMIC III as a REMIC or (b)
compliance with the REMIC Provisions must be an opinion of Independent counsel.

                  "Original Pre-Funded Amount": The amount deposited by the
Depositor in the Pre- Funding Account on the Closing Date, which amount is
$154,673,023.45.

                  "Originator": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the sum of the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date and the amount on deposit in the Pre- Funding Account as of
the last day of the related Due Period, exclusive of any investment earnings
therein over (b) the sum of the aggregate Certificate Principal Balances of the
Class A Certificates, the Mezzanine Certificates and the Class P Certificates as
of such Distribution Date (after taking into account the payment of the amounts
described in clauses (b)(i) through (iv) of the definition of Principal
Distribution Amount on such Distribution Date).

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralized
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date prior to taking into account the
payment of any Overcollateralization Increase Amount on such Distribution Date.

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued

<PAGE>

Certificate Interest payable on the Class CE Certificates on such Distribution
Date as reduced by Realized Losses allocated thereto with respect to such
Distribution Date pursuant to Section 4.04.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the sum of the amounts available for
distribution specified in clauses (b)(i) through (iii) of the definition of
Principal Distribution Amount.

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

                  "Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, a rate per annum equal
to the lesser of (i) the related One- Month LIBOR Pass-Through Rate for such
Distribution Date and (ii) the Net WAC Pass-Through Rate for such Distribution
Date. With respect to the Class CE Certificates and any Distribution Date, a
rate per annum equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (i) through
(viii) below, and the denominator of which is the Uncertificated Balance of the
REMIC II Regular Interests. For purposes of calculating the Pass-Through Rate
for the Class CE Certificates, the numerator is equal to the sum of the
following components:

                  (i) the REMIC II Remittance Rate for REMIC II Regular Interest
         II-LT1 minus two (2) times the weighted average of the REMIC II
         Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II Regular
         Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular
         Interest II-LT5 and REMIC II Regular Interest II-LT6, with the rate on
         REMIC II Regular Interest II-LT6 subject to a cap of zero for the
         purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT1;

                  (ii) the REMIC II Remittance Rate for REMIC II Regular
         Interest II-LT2 minus two (2) times the weighted average of the REMIC
         II Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II
         Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
         Regular Interest II-LT5 and REMIC II Regular Interest II-LT6, with the
         rate on REMIC II Regular Interest II-LT6 subject to a cap of zero for
         the purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT2;

                  (iii) the REMIC II Remittance Rate for REMIC II Regular
         Interest II-LT3 minus two (2) times the weighted average of the REMIC
         II Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II
         Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
         Regular Interest II-LT5 and REMIC II Regular Interest II-LT6, with the
         rate on REMIC II Regular Interest II-LT6 subject to a cap of zero for
         the purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT3;

<PAGE>

                  (iv) the REMIC II Remittance Rate for REMIC II Regular
         Interest II-LT4 minus two (2) times the weighted average of the REMIC
         II Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II
         Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
         Regular Interest II-LT5 and REMIC II Regular Interest II-LT6, with the
         rate on REMIC II Regular Interest II-LT6 subject to a cap of zero for
         the purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT4;

                  (v) the REMIC II Remittance Rate for REMIC II Regular Interest
         II-LT5 minus two (2) times the weighted average of the REMIC II
         Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II Regular
         Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular
         Interest II-LT5 and REMIC II Regular Interest II-LT6, with the rate on
         REMIC II Regular Interest II-LT6 subject to a cap of zero for the
         purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT5;;

                  (vi) the REMIC II Remittance Rate for REMIC II Regular
         Interest II-LT6 minus two (2) times the weighted average of the REMIC
         II Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II
         Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
         Regular Interest II-LT5 and REMIC II Regular Interest II-LT6, with the
         rate on REMIC II Regular Interest II-LT6 subject to a cap of zero for
         the purpose of this calculation, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest II- LT6;

                  (vii) 100% of the interest on REMIC II Regular Interest
         II-LT2S;

                  (viii) 100% of the interest on REMIC II Regular Interest
         II-LT3S;

                  (ix) 100% of the interest on REMIC II Regular Interest
         II-LT4S;

                  (x) 100% of the interest on REMIC II Regular Interest II-LT5S;
         and

                  (xi) 100% of the interest on REMIC II Regular Interest II-LTP.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof.
The Class P Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class CE Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of such Class of Certificates may
be issued having a Percentage

<PAGE>

Interest corresponding to the remainder of the aggregate initial Certificate
Principal Balance of such Class or to an otherwise authorized denomination for
such Class plus such remainder. With respect to any Residual Certificate, the
undivided percentage ownership in such Class evidenced by such Certificate, as
set forth on the face of such Certificate. The Residual Certificates are
issuable in Percentage Interests of 20% and multiples thereof.

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

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued 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);

                           (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 that rates such securities in its highest
         long-term unsecured rating categories 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 that rates such securities 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 advised by the Trustee or an Affiliate thereof, that have
         been rated "AAA" by Fitch (if rated by Fitch), "Aaa" by Moody's and
         "AAA" by S & P; and

<PAGE>

                           (viii) if previously confirmed in writing to the
         Trustee, any other demand, money market or time deposit, or any other
         obligation, security or investment, as may be acceptable to the Rating
         Agencies as a permitted investment of funds backing securities having
         ratings equivalent to its highest initial rating of the Class A
         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, 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
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure of deed in lieu of foreclosure as
determined 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.

                  "Pre-Funding Account ": The account established and maintained
pursuant to Section 4.07.

                  "Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 28% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.

                  "Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge collected by the Master Servicer from
a Mortgagor in connection with any voluntary Principal Prepayment in full
pursuant to the terms of the related Mortgage Note as from time to time held as
a part of the Trust Fund, the Prepayment Charges so held being identified in the
Prepayment Charge Schedule (other than any Master Servicer Prepayment Charge
Payment Amount).

<PAGE>

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto) as
supplemented by each schedule of Subsequent Mortgage Loans which by their terms
have related Prepayment Charges. The Prepayment Charge Schedule shall set forth
the following information with respect to each Prepayment Charge:

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

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

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

               (iv) the term of the Prepayment Charge;

                (v) the original principal balance of the related Mortgage Loan;

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

                  The Prepayment Charge Schedule shall be amended from time to
time by the Depositor in accordance with the provisions of this Agreement.

              "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 Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the 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.

                  "Principal Distribution Amount": With respect to any
Distribution Date, the lesser of:

              (a)   the excess of the Available Distribution Amount over the
                    amount payable on the Class A Certificates and the Mezzanine
                    Certificates pursuant to Section 4.01(a)(2); and

              (b)   the sum of:

                  (i) the principal portion of each Monthly Payment on the
                  Mortgage Loans due during the related Due Period, whether or
                  not received on or prior to the related Determination Date;

<PAGE>

                  (ii) the Stated Principal Balance of any Mortgage Loan that
                  was purchased during the related Prepayment Period pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 and the amount of any shortfall deposited in the
                  Collection Account in connection with the substitution of a
                  Deleted Mortgage Loan pursuant to Section 2.03 during the
                  related Prepayment Period;

                  (iii) the principal portion of all other unscheduled
                  collections (including, without limitation, Principal
                  Prepayments, Insurance Proceeds, Liquidation Proceeds and REO
                  Principal Amortization) received 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, and with respect to the Distribution Date
                  immediately following the end of the Funding Period, any
                  amounts in the Pre-Funding Account after giving effect to the
                  purchase of any Subsequent Mortgage Loans;

                  (iv) the principal portion of any Realized Losses incurred on
                  the Mortgage Loans in the calendar month preceding such
                  Distribution Date; and

                  (v) the amount of any Overcollateralization Increase Amount
                  for such Distribution Date;

                  minus:

                  (vi) the amount of any Overcollateralization Reduction
                  Amount for such Distribution Date.

              "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 (without regard to
any prepayment charge that may have been collected by the Master Servicer in
connection with such payment of principal) representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.

              "PTCE":  A Prohibited Transaction Class Exemption.

              "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 Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, 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 Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last

<PAGE>

covered by a payment by the Mortgagor or an advance by the Master Servicer
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, plus (2) REO Imputed Interest for such
REO Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.11(ix) and 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 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) have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) have a Minimum Mortgage
Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v)
have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi)
have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan and (xi) conform to each representation and warranty set forth in Section 6
of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan.
In the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Rates, the risk gradings described in clause (x) hereof shall
be satisfied as to each such mortgage loan, the terms described in clause (vii)
hereof shall be determined on the basis of weighted average remaining terms to
maturity, the Loan-to-Value Ratios described in clause (ix) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xi) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.

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

<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 during the calendar
month in which 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).

              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 REMIC I, 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 end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, 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) 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 Final Recovery Determination was made, plus (iv)
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
(v) the aggregate of all P&I Advances made by the Master Servicer in respect of
such REO Property or the related Mortgage Loan for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) 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.

<PAGE>

              "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Class of
Certificates, including any Definitive Certificates, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.

              "Reference Banks": Deutsche Bank, Barclay's Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Depositor
or any Affiliate thereof and (iii) which have been designated as such by the
Trustee.

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

              "Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class P Certificate or Class CE Certificate.

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

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

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

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

              "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges 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 interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amount), the Distribution Account
(other than any amounts representing any Master Servicer Prepayment Charge
Payment Amount) 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, REMIC I specifically excludes the Pre-Funding Account, the Interest
Coverage Account, all payments and other collections of principal

<PAGE>

and interest due on the Mortgage Loans on or before the Cut-off Date and all
Prepayment Charges payable in connection with Principal Prepayments made before
the Cut-off Date.

              "REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT1 minus two (2) times the weighted average of the REMIC II Remittance Rates
for REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II- LT4, REMIC II Regular Interest II-LT5 and REMIC II Regular
Interest II-LT6, with the rate on REMIC II Regular Interest II-LT6 subject to a
cap of zero for purposes of this calculation, divided by (b) 12.

              "REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular
Interest I-LT4 and REMIC I Regular Interest I-LT5, in each case as of such date
of determination.

              "REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Balances of REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, REMIC I Regular Interest I-LT4 and REMIC I Regular Interest
I-LT5 and the denominator of which is the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3,
REMIC I Regular Interest I-LT4, REMIC I Regular Interest I-LT5 and REMIC I
Regular Interest I-LT6.

              "REMIC I Regular Interest": Any of the seven separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and

<PAGE>

conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT6
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time and shall be entitled to any Prepayment Charges collected by the Master
Servicer and to a distribution of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

              "REMIC I Remittance Rate": With respect to each REMIC I Regular
Interest, (i) for the July 2000 Distribution Date, 10.2365649453% and (ii) for
each Distribution Date thereafter, the Net WAC Pass-Through Rate multiplied by
the actual number of days elapsed in the related Interest Accrual Period and
divided by 360.

              "REMIC I Required Overcollateralized Amount": 1% of the Required
Overcollateralization Amount.

<PAGE>

              "REMIC II": The segregated pool of assets consisting of all of the
REMIC I Regular Interests conveyed in trust to the Trustee for the benefit of
REMIC III, as holder of the REMIC II Regular Interests, and the Class R-II
Certificateholders pursuant to Section 2.07, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.

              "REMIC II Regular Interest": Any of the eleven separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC II Regular Interests are set forth in the
Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT1
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT2
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT3
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT4
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT5
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and

<PAGE>

conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT6": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT6
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTP
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time and shall be entitled to any Prepayment Charges collected by the
Master Servicer and to a distribution of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

              "REMIC II Regular Interest II-LT2S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT2S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.

              "REMIC II Regular Interest II-LT3S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT3S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.

              "REMIC II Regular Interest II-LT4S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT4S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.

              "REMIC II Regular Interest II-LT5S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT5S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.

              "REMIC II Remittance Rate": With respect to REMIC II Regular
Interest II-LT1, REMIC II Regular Interest II-LT6, REMIC II Regular Interest
II-LTP, (i) for the July 2000 Distribution Date, 10.2365649453% and (ii) for
each Distribution Date thereafter, the Net WAC Pass-Through Rate multiplied by
the actual number of days elapsed in the related Interest Accrual Period and
divided by 360. With respect to REMIC II Regular Interest II-LT2, REMIC II
Regular Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular
Interest II-LT5, the lesser of (i) the related One-Month LIBOR Pass-Through Rate
(based on the actual number of days elapsed in the applicable Interest Accrual
Period and a 360-day year) and (ii) the Net WAC Pass-Through Rate, multiplied by
the actual number of days elapsed in the related Interest Accrual Period divided

<PAGE>

by 360. With respect to REMIC II Regular Interest II-LT2S, REMIC II Regular
Interest II-LT3S, REMIC II Regular Interest II-LT4S and REMIC II Regular
Interest II-LT5S, a rate per annum equal to excess of the REMIC I Remittance
Rate for the related Uncertificated Corresponding Component over the REMIC II
Remittance Rate for REMIC II Regular Interest II-LT2, REMIC II Regular Interest
II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular Interest II-LT5,
respectively.

              "REMIC III": The segregated pool of assets consisting of all of
the REMIC II Regular Interests conveyed in trust to the Trustee for the benefit
of the REMIC III Certificateholders pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

              "REMIC III Certificate": Any Regular Certificate or Class R-III
Certificate.

              "REMIC III Certificateholder": The Holder of any REMIC III
Certificate.

              "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 that is
acceptable to the Trustee on a magnetic disk or tape 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": Each of the 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 REMIC I.

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

              "REO Principal Amortization": With respect to any REO Property,
for any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without limitation, that
portion of the Termination Price paid in connection with a purchase of all of
the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable
to such REO

<PAGE>

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 REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

              "Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E-1 or Exhibit E-2 attached hereto.

              "Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $16,374,900, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
5.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) $4,912,500, and (iii) on or after the
Stepdown Date and a Trigger Event is in effect, the Required Overcollateralized
Amount for the immediately preceding Distribution Date.

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

              "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 condominium project or (iv) a detached or
attached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (unless such mobile or manufactured
home is defined as real property under applicable state law).

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

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

              "Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
cashier, any trust

<PAGE>

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

              "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount with respect to the Class A Certificates.

              "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 3.14,

<PAGE>

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

              "Servicing Fee Rate":  0.50% per annum.

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

              "Single Certificate": With respect to any Class of Certificates
(other than the Class P Certificates and 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 Class P Certificates and the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 20%
Percentage Interest in such Class.

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

              "Startup Day": With respect to each of REMIC I, REMIC II and REMIC
III, 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 (or the related Subsequent Cut-off Date, with respect to
a Subsequent Mortgage Loan), 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

<PAGE>

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 REMIC I, 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, 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 that 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.

              "Stepdown Date": The later to occur of (i) the Distribution Date
occurring in July 2003 and (ii) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans but prior to any
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date) is equal to or
greater than 40.00%.

              "Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the first day of the month in which the related Subsequent Transfer
Date occurs.

              "Subsequent Mortgage Loan": A Mortgage Loan sold by the Depositor
to the Trust Fund pursuant to Section 2.11, such Mortgage Loan being identified
on the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.

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

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

              "Subsequent Transfer Instrument": Each subsequent transfer
instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form of Exhibit I, by which Subsequent
Mortgage Loans are sold to the Trust Fund.

<PAGE>

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

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

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

              "Substitution Shortfall Amount":  As defined in Section 2.03(d).

              "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.

              "Telerate Page 3750": The display designated as page "3750" on the
Dow Jones Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).

              "Termination Price":  As defined in Section 9.01.

              "Terminator":  As defined in Section 9.01.

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

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

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

              "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds the lesser of (i) 40% of
the Credit Enhancement Percentage or (ii) 16.00%.

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

              "Trustee": Norwest Bank Minnesota, National Association, a
national banking association, or its successor in interest, or any successor
trustee appointed as herein provided.

<PAGE>

              "Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate Scheduled Principal Balance of the Mortgage
Loans and any REO Properties and any amount in the Pre-Funding Account as of the
second preceding Due Date (or, in the case of the initial Distribution Date, as
of the Cut-off Date).

              "Trustee's Fee Rate":  0.0035% per annum.

              "Uncertificated Balance": The amount of any REMIC I Regular
Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Balance of each REMIC
I Regular Interest and each REMIC II Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial uncertificated balance.
On each Distribution Date, the Uncertificated Balance of each REMIC I Regular
Interest and each REMIC II Regular Interest shall be reduced by all
distributions of principal made on such REMIC I Regular Interest or such REMIC
II Regular Interest, as applicable, on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.04 and the Uncertificated Balances of the REMIC I Regular Interest
I-LT6 and REMIC II Regular Interest II-LT6 shall be increased by interest
deferrals as provided in Section 4.01(a)(1)(A)(i) and Section 4.01(a)(1)(B)(i),
respectively. The Uncertificated Balance of each REMIC I Regular Interest and
each REMIC II Regular Interest shall never be less than zero.

              "Uncertificated Corresponding Component": With respect to: REMIC
II Regular Interest II-LT1, REMIC I Regular Interest I-LT1; REMIC II Regular
Interest II-LT2 and REMIC II Regular Interest II-LT2S, REMIC I Regular Interest
I-LT2, REMIC II Regular Interest II-LT3 and REMIC II Regular Interest II-LT3S,
REMIC I Regular Interest I-LT3; REMIC II Regular Interest II- LT4 and REMIC II
Regular Interest II-LT4S, REMIC I Regular Interest I-LT4; REMIC II Regular
Interest II-LT5 and REMIC II Regular Interest II-LT5S, REMIC I Regular Interest
I-LT5; REMIC II Regular Interest II-LT6, REMIC I Regular Interest I-LT6; and
REMIC II Regular Interest II-LTP, REMIC I Regular Interest I-LTP.

              "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. With respect to any REMIC II Regular Interest
for any Distribution Date, one month's interest at the REMIC II Remittance Rate
applicable to such REMIC II Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of any REMIC I Regular Interest, REMIC
II Regular Interest II-LT1, REMIC II Regular Interest II-LT5, REMIC II Regular
Interest II-LT6, REMIC II Regular Interest II-LT2S, REMIC II Regular Interest
II-LT3S, REMIC II Regular Interest II-LT4S and REMIC II Regular Interest II-LT5S
shall accrue on the basis of a 360-day year and the actual number of days in the
month; Uncertificated Interest in respect of REMIC II Regular Interest II-LT2,
REMIC II Regular Interest II-LT3, REMIC II Regular Interest II- LT4 and REMIC II
Regular Interest II-LT5, shall accrue on the basis of a 360-day year and the
actual

<PAGE>

number of days in the applicable Interest Accrual Period. Uncertificated
Interest with respect to each Distribution Date, as to any REMIC I Regular
Interest or REMIC II Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.24
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each case, to such REMIC I Regular Interest or REMIC II Regular
Interest pursuant to Section 1.02. In addition, Uncertificated Interest with
respect to each Distribution Date, as to any REMIC I Regular Interest or REMIC
II Regular Interest, shall be reduced by Realized Losses, if any, allocated to
such REMIC I Regular Interest or REMIC II Regular Interest pursuant to Section
1.02 and Section 4.04.

              "Uncertificated Notional Amount": With respect to REMIC II Regular
Interest II-LT2S, REMIC II Regular Interest II-LT3S, REMIC II Regular Interest
II-LT4S and REMIC II Regular Interest II-LT5S, the Uncertificated Balance of
REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular
Interest I-LT4 and REMIC I Regular Interest I-LT5, respectively.

              "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. To the extent prescribed in regulations by
the Secretary of the Treasury, which have not yet been issued, a trust which was
in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence. 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 by an appraiser
who met the minimum requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, 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 who met the minimum
requirements of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989.

              "Verification Fee": With respect to the July 2000 Distribution
Date through the June 2001 Distribution Date, an amount equal to $833.33. With
respect to the July 2001 Distribution Date through the June 2002 Distribution
Date, an amount equal to $708.33. With respect to the July

<PAGE>

2002 Distribution Date through the June 2003 Distribution Date, an amount equal
to $602.08. With respect to the July 2003 Distribution Date through the June
2004 Distribution Date, an amount equal to $511.77. With respect to the July
2004 Distribution Date through the June 2005 Distribution Date, an amount equal
to $434.95. Following the June 2005 Distribution Date, the Verification Fee
shall be equal to $0.00.

              "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and 1/3 of 1% of all Voting
Rights will be allocated among the holders of each Class of Residual
Certificates. The Voting Rights allocated to each Class of Certificate shall be
allocated among Holders of each such Class in accordance with their respective
Percentage Interests as of the most recent Record Date.

              SECTION 1.02.         Allocation of Certain Interest Shortfalls.

              For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) 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
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate and (2) the aggregate amount of any Realized
Losses incurred for any Distribution Date shall be allocated among the Class CE
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Notional Amount of each such Certificate.

              For purposes of calculating the amount of Uncertificated Interest
for the REMIC I Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT6 up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I- LT1, REMIC I
Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest
I-LT4, REMIC I Regular Interest I-LT5 and REMIC I Regular Interest I-LT6 PRO
RATA based on, and to the extent of, one month's interest at the then applicable
respective Pass-Through Rate on the respective Uncertificated Balance of each
such REMIC I Regular Interest.

<PAGE>

         All Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
on the REMIC II Regular Interests shall be allocated by the Trustee on each
Distribution Date among the REMIC II Regular Interests in the proportion that
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls are allocated
to the related Uncertificated Corresponding Component.

<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 REMIC I. 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, the Original Pre-Funded Amount and the required deposit to
the Interest Coverage Account.

              In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, or to one or more
Custodians as the agent or agents of the Trustee, the following documents or
instruments with respect to each Initial Mortgage Loan so transferred and
assigned and the Depositor shall, in accordance with Section 2.11, deliver or
cause to be delivered to the Trustee with respect to each Subsequent Mortgage
Loan, the following documents or instruments (a "Mortgage File"):

                (i) the original Mortgage Note, endorsed in blank or in the
              following form: "Pay to the order of Norwest Bank Minnesota,
              National Association, as Trustee under the applicable agreement,
              without recourse," with all prior and intervening endorsements
              showing a complete chain of endorsement from the originator to the
              Person so endorsing to the Trustee;

               (ii) the original Mortgage with evidence of recording thereon,
              and a copy, certified by the appropriate recording office, of the
              recorded power of attorney, if the Mortgage was executed pursuant
              to a power of attorney, with evidence of recording thereon;

              (iii)   an original Assignment of the Mortgage in blank;

               (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);

                (v)   the original or copies of each assumption, modification,
              written assurance or substitution agreement, if any; and

<PAGE>

               (vi) the original lenders's title insurance policy or an
              attorney's opinion of title or similar guarantee of title
              acceptable to mortgage lenders generally in the jurisdiction where
              the Mortgaged Property is located, 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.

              The Master Servicer (in its capacity as Originator) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date (or the related Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans), (ii) the date on which the Originator
receives the Assignment from the Custodian and (iii) the date of receipt by the
Master Servicer of the recording information for a Mortgage) submit or cause to
be submitted for recording, at no expense to the Trust Fund or the Trustee, in
the appropriate public office for real property records, each Assignment
referred to in Sections 2.01(iii) and (iv) above and shall execute each original
Assignment referred to in section 2.01(iii) above in the following form:
"Norwest Bank Minnesota, National Association, as Trustee under the applicable
agreement". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Master Servicer (in its capacity as Originator)
shall promptly prepare or cause to be prepared a substitute Assignment or cure
or cause to be cured such defect, as the case may be, and thereafter cause each
such Assignment to be duly recorded. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan only if the Trustee
and each Rating Agency has received an opinion of counsel, satisfactory in form
and substance to the Trustee and each Rating Agency, to the effect that the
recordation of such assignments in any specific jurisdiction is not necessary to
protect the Trustee's interest in the related Mortgage Note; provided further,
however, notwithstanding the delivery of any opinion of counsel, each assignment
of Mortgage shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) failure of the Master Servicer Termination
Test, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Originator, (iv) the occurrence of a servicing transfer as described in
Section 7.02 hereof, (v) if the Originator is not the Master Servicer and with
respect to any one assignment of Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days or more delinquent. Notwithstanding
the foregoing, if the Master Servicer is unable to pay the cost of recording the
Assignments of Mortgage, such expense will be paid by the Trustee.

              If any of the documents referred to in Sections 2.01(ii), (iii) or
(iv) above has as of the Closing Date (or the related Subsequent Transfer Date,
with respect to the Subsequent Mortgage Loans) been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Depositor to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, of a copy

<PAGE>

of each such document certified by the Originator in the case of (x) above or
the applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Originator, delivery to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy was not delivered pursuant to Section
2.01(vi) above, the Depositor shall deliver or cause to be delivered to the
Trustee, or to the appropriate Custodian on behalf of the Trustee, promptly
after receipt thereof, the original lender's title insurance policy. The
Depositor shall deliver or cause to be delivered to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, 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 or modification of any Mortgage Loan.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on behalf of the Originator, 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, or to
the appropriate Custodian on behalf of 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 REMIC I by the Trustee.

                  Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all other assets included
in the definition of "REMIC I" under clauses (i), (iii), (iv) and (v) (to the
extent of amounts deposited into the Distribution Account) and declares that it,
or such Custodian as its agent, holds and will hold such documents and the other
documents delivered to it constituting the Mortgage File, and that it holds or
will hold all such assets and such other assets included in the definition of
"REMIC I" 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 cause a Custodian on its behalf to review) each Mortgage File on or
before the Closing Date (or the related Subsequent Transfer Date, with respect
to the Subsequent Mortgage Loans) and to certify in substantially the form
attached hereto as Exhibit C-1 (or cause the Custodian to certify in the form of
the Initial Certification attached to the Custodial Agreement) that, as to each
Initial Mortgage Loan or Subsequent 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), the Trustee is in possession of the Mortgage
Note. Within 30 days following the Closing Date, the Trustee agrees, for the
benefit of the

<PAGE>

Certificateholders, to review (or cause a Custodian on its behalf to review)
each Mortgage File on or before the Closing Date and to certify in substantially
the form attached hereto as Exhibit C-2 (or cause the Custodian to certify in
the form of the Interim Certification attached to the Custodial Agreement) 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 constituting part of such Mortgage File (other than such
documents described in Section 2.01(v)) required to be delivered to it pursuant
to this Agreement are in its possession, (ii) such documents have been reviewed
by it or such Custodian and are not mutilated, torn or defaced unless initialed
by the related borrower and relate to such Mortgage Loan, (iii) based on its or
the Custodian's examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (i) through (iii),
(vi), (ix), (x), (xiii), (xv) and (xvii) through (xx) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee or such Custodian was under no duty or obligation (i) to inspect, review
or examine any such documents, instruments, certificates or other papers to
determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.

                  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-3 (or shall cause the
Custodian to deliver to the Trustee, the Depositor and the Master Servicer a
final certification in the form attached to the Custodial Agreement) evidencing
the completeness of the Mortgage Files, with any applicable exceptions noted
thereon, with respect to all of the Initial Mortgage Loans and the Subsequent
Mortgage Loans.

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

                  The Trustee (or a Custodian on behalf of the Trustee) shall,
at the written request and expense of any Certificateholder, provide a written
report to such Certificateholder, of all Mortgage Files released to the Master
Servicer for servicing purposes.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
                                the Originator or the Depositor; Payment of
                                Prepayment Charges in the event of breach.

<PAGE>

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, the Mortgage File or
of the breach by the Originator of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders shall promptly notify the Originator and the
Master Servicer of such defect, missing document or breach and request that the
Originator deliver such missing document or cure such defect or breach within 90
days from the date the Originator was notified of such missing document, defect
or breach, and if the Originator does not deliver such missing document or cure
such defect or breach in all material respects during such period, the Master
Servicer (or, in accordance with Section 3.02(b), the Trustee) shall enforce the
obligations of the Originator under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Originator was notified (subject to Section 2.03(d))
of such missing document, defect or breach, if and to the extent that the
Originator 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 Originator the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Originator shall furnish to it
and as shall be necessary to vest in the Originator any Mortgage 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
Originator may cause such Mortgage Loan to be removed from REMIC I (in which
case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(c). It is understood and agreed that the obligation of
the Originator to cure or to repurchase (or to substitute for) any Mortgage Loan
as to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or breach available
to the Trustee on behalf of the Certificateholders.

                  (b) (i) Promptly upon 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.

                     (ii) 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 Holders of the
Class P Certificates to any Prepayment Charge, the Master Servicer shall cure
such breach in all material respects. If the representation made by the Master
Servicer in Section 2.05(vii) is breached, the Master Servicer shall deposit
into the Collection Account the amount of the scheduled Prepayment Charge, less
any amount collected and deposited by the Master Servicer into the Collection
Account; and if the covenant made by the Master Servicer in Section 2.05(viii)
is breached, the Master Servicer shall deposit into the Collection Account the
amount of the waived Prepayment Charge.

<PAGE>

                  (c) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator, or Section 2.03(b), in the case of the Depositor, must be effected
prior to the date which is two years after the Startup Day for REMIC I.

                 As to any Deleted Mortgage Loan for which the Originator or the
Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Depositor, as the case
may be, delivering to the Trustee (or a Custodian on behalf of 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 (or a Custodian on behalf of the Trustee) shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents as specified in
Section 2.02 and deliver to the Depositor and the Master Servicer, with respect
to such Qualified Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit C-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Depositor and the Master Servicer a certification
substantially in the form of Exhibit C-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of REMIC I and will be retained by the
Depositor or the Originator, as the case may be. 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 Depositor or the Originator, as the case may be, shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Depositor shall give or cause to be given written notice to
the Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the 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, in the case of a
substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof.

                  For any month in which the Depositor or the Originator
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer will determine the amount (the
"Substitution 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 Net Mortgage Rate. On the date of
such substitution, the Depositor or the Originator, as the case may be, 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

<PAGE>

Master Servicer of such deposit, shall release to the Depositor or the
Originator, as the case may be, the related Mortgage File or Files and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Depositor or the Originator, as the case may be, shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.

                  In addition, the Depositor or the Originator, as the case may
be, shall obtain at its own expense and deliver to the Trustee an Opinion of
Counsel to the effect that such substitution will not cause (a) any federal tax
to be imposed on any of REMIC I, REMIC II or REMIC III, 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) any of REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC at any time that any Certificate is outstanding.

                  (d) Upon discovery by the Depositor, the Originator, 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 Originator or the
Depositor shall repurchase or, subject to the limitations set forth in Section
2.03(c), 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 the Originator. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a).
The Trustee shall reconvey to the Depositor or the Originator, as the case may
be, the Mortgage Loan to be released pursuant hereto in the same manner, and on
the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty.

                  SECTION 2.04.    [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, the Certificateholders
and to the Depositor that as of the Closing Date or as of such date specifically
provided herein:

                         (i) The Master Servicer is a corporation duly
                  organized, validly existing and in good standing under the
                  laws of the State of Delaware 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;

<PAGE>

                        (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 Depositor
                  and the Trustee, 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;

                        (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 and Section 211 of
                  the National Housing Act;

                         (v) Except as disclosed in the Prospectus Supplement,
                  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

<PAGE>

                  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;

                       (vii) The information set forth in the Prepayment Charge
                  Schedule attached hereto as Schedule 2 (including the
                  prepayment charge summary attached thereto) is complete, true
                  and correct in all material respects at the date or dates
                  respecting which such information is furnished and each
                  Prepayment Charge is permissible and enforceable in accordance
                  with its terms (except to the extent that (i) the
                  enforceability thereof may be limited by bankruptcy,
                  insolvency, moratorium, receivership and other similar laws
                  relating to creditors' rights generally and (ii) the
                  collectability thereof may be limited due to acceleration in
                  connection with a foreclosure or other involuntary payment;

                      (viii) The Master Servicer will not waive any Prepayment
                  Charge or part of a Prepayment Charge unless, in the Master
                  Servicer's reasonable judgment as described in Section 3.01
                  hereof, such waiver would maximize recovery of total proceeds
                  taking into account the value of such Prepayment Charge and
                  related Mortgage Loan and doing so is standard and customary
                  in servicing similar Mortgage Loans (including any waiver of a
                  Prepayment Charge in connection with a refinancing of a
                  Mortgage Loan that is related to a default or a reasonably
                  foreseeable default) and in no event will it waive a
                  Prepayment Charge in connection with a refinancing of a
                  Mortgage Loan that is not related to a default or a reasonably
                  foreseeable default;

                        (ix)  The information set forth in the "monthly tape"
                  provided to the Trustee or any of its affiliates is true and
                  correct in all material respects; and

                        (ix) With respect to each Mortgage Loan, the Assignment
                  is in recordable form; (except that the name of the assignee
                  and the recording information with respect to such Mortgage
                  Loan is blank) and each Mortgage Loan was originated in the
                  name of the Master Servicer or an affiliate thereof.

                  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 or to a Custodian, as the case may be, 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, Prepayment Charge or the interests therein of the Certificateholders, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the Trustee. Subject
to Section 7.01, the obligation of the Master Servicer set forth in Section
2.03(c) to cure breaches shall constitute the sole remedies against the Master
Servicer available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders respecting a breach of the representations,
warranties and covenants contained in this Section 2.05. The preceding sentence

<PAGE>

shall not, however, limit any remedies available to the Certificateholders, the
Depositor or the Trustee on behalf of the Certificateholders, pursuant to the
Mortgage Loan Purchase Agreement signed by the Master Servicer in its capacity
as Originator, respecting a breach of the representations, warranties and
covenants of the Master Servicer in its capacity as Originator contained in such
Mortgage Loan Purchase Agreement.

                  SECTION 2.06.             Issuance of Class R-I Certificates.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it, or any Custodian on its behalf, 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 REMIC I, receipt of which
is hereby acknowledged. Concurrently with such assignment and delivery and in
exchange therefor, the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-I Certificates in
authorized denominations. The interests evidenced by the Class R-I Certificates,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Class R-I Certificateholders
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I
Certificates and the REMIC I Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-I Certificates and the REMIC I
Regular Interests, shall be as set forth in this Agreement.

                  SECTION 2.07. Conveyance of REMIC I Regular Interests;
                                Acceptance of REMIC II by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R-II and REMIC
III Certificateholders. The Trustee acknowledges receipt of the REMIC I Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future Class R-II
Certificateholders and REMIC III Certificateholders. The rights of the Class
R-II Certificateholders and REMIC III (as holder of the REMIC II Regular
Interests) to receive distributions from the proceeds of REMIC II in respect of
the Class R-II Certificates and REMIC II Regular Interests, respectively, and
all ownership interests evidenced or constituted by the Class R-II Certificates
and the REMIC II Regular Interests, shall be as set forth in this Agreement.

                  SECTION 2.08.  Issuance of Class R-II Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R-II Certificates in authorized denominations. The
interests evidenced by the Class R-II Certificates, together with the REMIC II
Regular Interests, constitute the entire beneficial ownership interest in REMIC
II.

<PAGE>

                  SECTION 2.09. Conveyance of REMIC II Regular Interests;
                                Acceptance of REMIC III by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests for the benefit of the REMIC
III
Certificateholders. The Trustee acknowledges receipt of the REMIC II Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future REMIC III
Certificateholders. The rights of the REMIC III Certificateholders to receive
distributions from the proceeds of REMIC III in respect of the REMIC III
Certificates, and all ownership interests evidenced or constituted by the REMIC
III Certificates, shall be as set forth in this Agreement.

                  SECTION 2.10.   Issuance of REMIC III Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC II
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the REMIC III Certificates in authorized denominations evidencing
the entire beneficial ownership interest in REMIC III.

                  SECTION 2.11.  Conveyance of the Subsequent Mortgage Loans.

                  (a) Subject to the conditions set forth in paragraph (b)
below, in consideration of the Trustee's delivery on the Subsequent Transfer
Dates to or upon the order of the Depositor of all or a portion of the balance
of funds in the Pre-Funding Account, the Depositor shall on any Subsequent
Transfer Date sell, transfer, assign, set over and convey without recourse to
the Trust Fund but subject to the other terms and provisions of this Agreement
all of the right, title and interest of the Depositor in and to (i) the
Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to
the related Subsequent Transfer Instrument delivered by the Depositor on such
Subsequent Transfer Date, (ii) principal due and interest accruing on the
Subsequent Mortgage Loans after the related Subsequent Cut-off Date and (iii)
all items with respect to such Subsequent Mortgage Loans to be delivered
pursuant to Section 2.01 and the other items in the related Mortgage Files;
PROVIDED, HOWEVER, that the Depositor reserves and retains all right, title and
interest in and to principal due and interest accruing on the Subsequent
Mortgage Loans prior to the related Subsequent Cut-off Date. The transfer to the
Trustee for deposit in the Mortgage Pool by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Agreement shall be absolute and is intended by the
Depositor, the Master Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee or the Custodian at least three
Business Days prior to the related Subsequent Transfer Date.

                  The purchase price paid by the Trustee from amounts released
from the Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided

<PAGE>

by the Depositor). This Agreement shall constitute a fixed-price purchase
contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.

                  (b) The Depositor shall transfer to the Trustee for deposit in
the Trust the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account only upon the satisfaction of each of
the following conditions on or prior to the related Subsequent Transfer Date:

                  (i)  the Depositor shall have provided the Trustee with a
         timely Addition Notice;

                  (ii) the Depositor shall have delivered to the Trustee a duly
         executed Subsequent Transfer Instrument, which shall include a Mortgage
         Loan Schedule listing the Subsequent Mortgage Loans, and the Master
         Servicer, in its capacity as Originator, shall have delivered a
         computer file containing such Mortgage Loan Schedule to the Trustee and
         each Rating Agency at least three Business Days prior to the related
         Subsequent Transfer Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit I, the Depositor shall not be insolvent nor shall it
         have been rendered insolvent by such transfer nor shall it be aware of
         any pending insolvency;

                  (iv) such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v)   the Funding Period shall not have terminated;

                  (vi)  the Depositor shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Depositor shall have delivered to the Trustee a
         Subsequent Transfer Instrument confirming the satisfaction of the
         conditions precedent specified in this Section 2.11 and, pursuant to
         the Subsequent Transfer Instrument, assigned to the Trustee without
         recourse for the benefit of the Certificateholders all the right, title
         and interest of the Depositor, in, to and under the Subsequent Mortgage
         Loan Purchase Agreement, to the extent of the Subsequent Mortgage
         Loans;

                  (viii) the Depositor shall have delivered to the Trustee a
         letter from an Independent accountant (with copies provided to each
         Rating Agency) stating that the characteristics of the Subsequent
         Mortgage Loans conform to the characteristics set forth in paragraphs
         (c) and (d) below; and

                  (ix) the Depositor shall have delivered to the Trustee an
         Opinion of Counsel addressed to the Trustee and the Rating Agencies
         with respect to the transfer of the Subsequent Mortgage Loans
         substantially in the form of the Opinion of Counsel delivered to the
         Trustee on the Closing Date regarding the true sale of the Subsequent
         Mortgage Loans.

<PAGE>

                  (c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the related Subsequent Cut-off Date: (i) the
Subsequent Mortgage Loan may not be 30 or more days delinquent as of the related
Subsequent Cut-off Date; provided, however that approximately 100% of the
Subsequent Mortgage Loans, by aggregate principal balance as of the related
Subsequent Cut-off Date, may have a first payment date occurring on or after the
Subsequent Cut-off Date and, therefore, such Subsequent Mortgage Loans could not
have been delinquent as of the related Subsequent Cut-off Date; (ii) the term to
stated maturity of the Subsequent Mortgage Loan will not be less than 180 months
and will not exceed 360 months from its first payment date; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) the Subsequent
Mortgage Loan will not have a Loan-to-Value Ratio greater than 90%; (v) the
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 15 months; (vi) no
Subsequent Mortgage Loan shall have a Mortgage Rate less than 8.000% or greater
than 15.750%; (vii) the Subsequent Mortgage Loan shall have been serviced by the
Master Servicer since origination or purchased by the Originator in accordance
with its underwriting guidelines; (viii) the Subsequent Mortgage Loan must have
a first payment date occurring on or before August 1, 2000 and (ix) the
Subsequent Mortgage Loan shall have been be underwritten in accordance with the
criteria set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.

                  (d) Following the purchase of the Subsequent Mortgage Loans by
the Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans)
will, as of the related Subsequent Cut-off Date: (i) have a weighted average
original term to stated maturity of not more than 360 months from the first
payment date thereon; (ii) have a weighted average Mortgage Rate of not less
than 10.331% and not more than 10.650%, by aggregate principal balance of the
Mortgage Loans; (iii) have a weighted average Loan-to-Value Ratio of not more
than 74.839%; (iv) have no Mortgage Loan with a principal balance in excess of
$690,000 and (v) have a weighted average Gross Margin of not less than 6.590%,
in each case, as applicable, by aggregate principal balance of the Mortgage
Loans as of the related Subsequent Cut-off Date.

                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by each Rating Agency if the inclusion of any such
Subsequent Mortgage Loan would adversely affect the ratings of any class of
Certificates. At least one Business Day prior to the related Subsequent Transfer
Date, the Depositor shall obtain confirmation from each Rating Agency which
Subsequent Mortgage Loans, if any, shall not be included in the transfer on the
related Subsequent Transfer Date and deliver such confirmation to the Trustee
and the Master Servicer; provided, however, that the Master Servicer, in its
capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
reasonably acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.

<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, 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 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 the Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.17, the Trustee shall

<PAGE>

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 by execution of this
Agreement, the Trustee hereby grants to the Master Servicer a power of attorney
to carry out such duties (including the taking of and transferring title of REO
Properties held in the name of the Trustee for the benefit of the Trust). The
Trustee shall not be liable for the actions of the Master Servicer or any
Sub-Servicers under such powers of attorney.

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

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any of REMIC I, REMIC II or REMIC III 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.

                  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 any Rating Agency of the ratings 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-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts in
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 Originator 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.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

                  SECTION 3.03. Successor Sub-Servicers.

                  The Master Servicer 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

<PAGE>

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

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the 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

<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 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, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided 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
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan (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.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. 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 one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received

<PAGE>

by the Sub-Servicer less its servicing compensation to the extent permitted by
the Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than two Business Days after the 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"). 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 one Business Day after
the Master Servicer's receipt thereof, all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
hazard insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Servicing Accounts, in no event
more than two Business Days after the 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 taxes, assessments, hazard
insurance premiums, and comparable items; (ii) reimburse the Master Servicer (or
a Sub- Servicer to the extent provided in the related Sub-Servicing Agreement)
out of related collections for any advances made pursuant to Section 3.01 (with
respect to taxes and assessments) and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; (v) clear and terminate the Servicing
Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the 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.

<PAGE>

                  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 one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the 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
subsequent to the Cut-off Date with respect to the Initial Mortgage Loans, or
the related Subsequent Cut-off Date with respect to the Subsequent Mortgage
Loans (other than in respect of principal or interest on the related Mortgage
Loans due on or before the Cut-off Date or Subsequent Cut-off Date, as the case
may be) 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;

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

<PAGE>

                         (viii) all Prepayment Charges collected by the Master
                  Servicer in connection with the voluntary Principal Prepayment
                  in full of any of the Mortgage Loans.

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, NSF fees, reconveyance fees or assumption fees and other similar fees
and charges need not be deposited by the Master Servicer in the Collection
Account and shall, upon collection, belong to the Master Servicer as additional
compensation for its servicing activities. In the event the Master Servicer
shall deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available 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 all Prepayment Charges collected by the
Master Servicer in connection with the voluntary Principal Prepayment in full of
any of the Mortgage Loans then on deposit in the Collection Account (other than
any such Prepayment Charges received after the related Prepayment Period) 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 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.

<PAGE>

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver to the Trustee from time to time for
deposit, and the Trustee shall so deposit, in the Distribution Account:

                         (i) any P&I Advances, as required pursuant to Section
                  4.03;

                         (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;

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

                         (vi) any amounts required to be paid by the Master
                  Servicer pursuant to Section 3.12(b) in connection with any
                  losses realized on Permitted Investments with respect to funds
                  held in the Collection Account.

                  (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. In addition, the Trustee shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.12(c) in
connection with losses realized on Permitted Investments with respect to funds
held in the Distribution 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);

<PAGE>

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

                       (iii) subject to Section 3.16(d), to pay the Master
                  Servicer or any Sub- Servicer (a) any unpaid Servicing Fees,
                  (b) any unreimbursed Servicing Advances with respect to each
                  Mortgage Loan, but only to the extent of any Liquidation
                  Proceeds, Insurance Proceeds or other 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 with respect to 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 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 or the
                  Interest Coverage Account (other than interest or investment
                  income earned on funds deposited in the Pre-Funding Account
                  and transferred to the Interest Coverage Account pursuant to
                  Section 4.07(c)(iv));

                         (v) to pay to the Master Servicer, the Depositor or the
                  Originator, 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 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

<PAGE>

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

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Reporting 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 the Trustee's Fee and expenses
                  pursuant to Section 8.05;

                         (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 7.01 and
                  Section 7.02;

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

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

                  SECTION 3.12. Investment of Funds in the Pre-Funding Account,
                                the Interest Coverage Account, the Collection
                                Account and the Distribution Account.

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

<PAGE>

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 Pre-Funding
Account, the Interest Coverage Account and the Collection Account and any income
and gain realized thereon) over each such investment, and any certificate or
other instrument evidencing any such investment shall be delivered directly to
the Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:

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

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

                  (b) All income and gain realized from the investment of funds
deposited in the the Interest Coverage Account and 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 Pre-Funding Account, the Interest
Coverage Account and 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(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.

<PAGE>

                  SECTION 3.13. [intentionally omitted]

                  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 A: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

<PAGE>

Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and Certificateholders, claims under any such blanket policy
in a timely fashion in accordance with the terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer 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 cancelable 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. 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 is authorized to enter into an assumption and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. The Master Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer. In connection with
any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter

<PAGE>

into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, 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 or otherwise
permitted under Section 3.01. The Master Servicer shall notify the Trustee and
any respective Custodian that any such substitution or assumption agreement has
been completed by forwarding to the Trustee or to such Custodian, as the case
may be, 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
(including selling any such Mortgage Loans other than converting the ownership
of the related property) 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 or the Certificateholders

<PAGE>

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 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(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 REMIC
I any Mortgage Loan or related REO Property that is 90 days or more delinquent,
which the Master Servicer determines in good faith will otherwise become subject
to foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price; provided, however, that the Master Servicer shall purchase any such
Mortgage Loans or related REO Properties on the basis of delinquency, purchasing
the most delinquent Mortgage Loans or related REO Properties first. The Purchase
Price for any Mortgage Loan or related REO

<PAGE>

Property 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 or related REO Property 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); 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).

                  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
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E-2 (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Trustee or such Custodian, as the case may be, 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 insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E-l, 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 and the Master
Servicer shall retain such Mortgage File in trust for the benefit of the
Certificateholders. Such Request for Release shall obligate the Master Servicer
to return each and every document previously requested from the Mortgage File to
the Trustee or to such Custodian 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

<PAGE>

deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trustee or such Custodian to the Master
Servicer.

                  (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)
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, NSF fees, reconveyance fees and other similar fees
and charges (other than Prepayment 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 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.

<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 and the Depositor a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on 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 request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the Depositor
and each Rating Agency on or before April 30th 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 30th of each calendar year commencing in
2001, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one

<PAGE>

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 each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided that such statement is delivered by the Master
Servicer to the Trustee. 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 Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee 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. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.23 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of REMIC I (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year REMIC I 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 REMIC I of such REO Property subsequent to
three years after its acquisition will not result in the imposition on REMIC I,
REMIC II or REMIC III of taxes on "prohibited transactions" thereof, as defined
in Section 860F of the Code, or cause any of REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC under Federal law at any time that any Certificates
are outstanding. The Master Servicer shall manage, conserve, protect and operate
each REO Property for the Certificateholders solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by REMIC I, REMIC II or REMIC
III of any "income from non-permitted

<PAGE>

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

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

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing 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 one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the 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, neither the Master Servicer nor
the Trustee shall:

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

<PAGE>

                        (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 REMIC
I, 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.

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

<PAGE>

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. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

                  (e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer 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.

                  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 3:00 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 solely from Principal Prepayments during the related Prepayment
Period and (ii) the amount of its aggregate Servicing Fee for the most recently
ended calendar month.

<PAGE>

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

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall 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 directly from the Trustee pursuant
to the terms of the Advance Facility, 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, the Section of this Agreement that permits the
applicable P&I Advance or Servicing Advance to be reimbursed and the section(s)
of the Advance Facility that entitle the Advancing Person to request
reimbursement from the Trustee, rather than the Master Servicer, and include the
Master Servicer's acknowledgment thereto or proof of an Event of Default under
the Advance Facility. 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 as set forth in Section 3.26(a),
then the Master Servicer shall not be permitted to reimburse itself therefor
under Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section
3.11(a)(ix), but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(b) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to an
Advancing Person reimbursements for P&I Advances and Servicing Advances from the
Distribution Account to the same extent the Master Servicer would have been
permitted to reimburse itself for such P&I Advances and/or Servicing Advances in
accordance with Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi)
or Section 3.11(a)(ix), as the case may be, had the Master Servicer made such
Advance or Servicing Advance.

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

                  (a)(1)(A) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R-I Certificates, as the
case may be:

                         (i) to the Holders of the REMIC I Regular Interests, in
                  an amount equal to (A) the Uncertificated Interest for such
                  Distribution Date, plus (B) any amounts in respect thereof
                  remaining unpaid from previous Distribution Dates. Amounts
                  payable as Uncertificated Interest in respect of REMIC I
                  Regular Interest I-LT6 shall be reduced when the REMIC I
                  Overcollateralized Amount is less than the REMIC I Required
                  Overcollateralized Amount, by the lesser of (x) the amount of
                  such difference and (y) the Maximum I-LT6 Uncertificated
                  Interest Deferral Amount; and

                        (ii) on each Distribution Date, to the Holders of the
                  REMIC I Regular Interests, in an amount equal to the remainder
                  of the Available Distribution Amount for such Distribution
                  Date after the distributions made pursuant to clause (i)
                  above, allocated as follows (except as provided below):

                                    (a) to the Holders of the REMIC I Regular
                           Interest I-LTP, on the Distribution Date immediately
                           following the expiration of the latest Prepayment
                           Charge term as identified on the Mortgage Loan
                           Schedule or any Distribution Date thereafter until
                           $100 has been distributed pursuant to this clause;

                                    (b) to the Holders of the REMIC I Regular
                           Interest I-LT1, 98.00% of the amount remaining after
                           application of clause (a), until the Uncertificated
                           Balance of such REMIC I Regular Interest is reduced
                           to zero and any remaining amount to the Holders of
                           the Class R-I Certificates;

                                    (c) to the Holders of the REMIC I Regular
                           Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC
                           I Regular Interest I-LT4 and REMIC I Regular Interest
                           I-LT5, 1.00% of the amount remaining after
                           application of clause (a), in the same proportion as
                           principal payments are allocated to the related
                           Corresponding Certificates, until the Uncertificated
                           Balances of such REMIC I Regular Interests are
                           reduced to zero and any remaining amount to the
                           Holders of the Class R-I Certificates; and

                                    (d) to the Holders of the REMIC I Regular
                           Interest I-LT6, 1.00% of the amount remaining after
                           application of clause (a), until the Uncertificated

<PAGE>

                           Balance of such REMIC I Regular Interest is reduced
                           to zero and any remaining amount to the Holders of
                           the Class R-I Certificates;

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to a Overcollateralization Reduction Amount shall be allocated to
Holders of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT6, respectively.

                  (B) On each Distribution Date, the following amounts shall be
distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests:

                         (i) any amounts paid as either Uncertificated Interest
                  paid or accrued to the REMIC I Regular Interests shall be
                  deemed to have been paid to the related Uncertificated
                  Corresponding Component in REMIC II in accordance with the
                  REMIC II Remittance Rates and any amounts deferred on REMIC I
                  Regular Interest I-LT6 pursuant to Section 4.01(a)(1)(A) shall
                  be deemed to have been deferred with respect to REMIC II
                  Regular Interest II-LT6; and

                        (ii) any amounts paid as principal on the REMIC I
                  Regular Interests shall be deemed to have been paid to the
                  related Uncertificated Corresponding Component in REMIC II in
                  accordance with the same priorities and conditions.

                  (2) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the Interest Remittance Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority:

                         (i) to the Holders of the Class A Certificates, an
                  amount equal to the Senior Interest Distribution Amount;

                        (ii) to the extent of the Interest Remittance Amount
                  remaining after distribution of the Senior Interest
                  Distribution Amount, to the Holders of the Class M-1
                  Certificates, an amount equal to the Interest Distribution
                  Amount allocable to the Class M-1 Certificates;

                       (iii) to the extent of the Interest Remittance Amount
                  remaining after distribution of the Senior Interest
                  Distribution Amount and the Interest Distribution Amount
                  allocable to the Class M-1 Certificates, to the Holders of the
                  Class M-2 Certificates, an amount equal to the Interest
                  Distribution Amount allocable to the Class M-2 Certificates;
                  and

                        (iv) to the extent of the Interest Remittance Amount
                  remaining after distribution of the Senior Interest
                  Distribution Amount and the Interest Distribution Amounts
                  allocable to the Class M-1 Certificates and the Class M-2
                  Certificates, to the Holders of the Class M-3 Certificates, an
                  amount equal to the Interest Distribution Amount allocable to
                  the Class M-3 Certificates.

<PAGE>

                  (3) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the Principal Distribution Amount
and distribute to the Certificateholders the following amounts, in the following
order of priority:

                         (i) On each Distribution Date (a) prior to the Stepdown
                  Date or (b) on which a Trigger Event is in effect, the
                  Principal Distribution Amount shall be distributed in the
                  following order of priority;

                           FIRST, to the Holders of the Class A Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           SECOND, to the Holders of the Class M-1 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           THIRD, to the Holders of the Class M-2 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           FOURTH, to the Holders of the Class M-3 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero.

                        (ii) On each Distribution Date (a) on or after the
                  Stepdown Date and (b) on which a Trigger Event is not in
                  effect, the Principal Distribution Amount shall be distributed
                  in the following order of priority;

                           FIRST, the lesser of (x) the Principal Distribution
                           Amount and (y) the Class A Principal Distribution
                           Amount shall be distributed to the Holders of the
                           Class A Certificates, until the Certificate Principal
                           Balance of such Class has been reduced to zero;

                           SECOND, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the amount
                           distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST above and (y)
                           the Class M-1 Principal Distribution Amount shall be
                           distributed to the Holders of the Class M-1
                           Certificates, until the Certificate Principal Balance
                           of such Class has been reduced to zero;

                           THIRD, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the amounts
                           distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST above and to
                           the Holders of the Class M-1 Certificates pursuant to
                           clause SECOND above and (y) the Class M-2 Principal
                           Distribution Amount shall be distributed to the
                           Holders of the Class M-2 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero; and

                           FOURTH, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the amounts
                           distributed to the Holders of the Class A
                           Certificates pursuant to clause FIRST above, to the
                           Holders of the Class M-1 Certificates

<PAGE>

                           pursuant to clause SECOND above and to the Holders of
                           the Class M-2 Certificates pursuant to clause THIRD
                           above and (y) the Class M-3 Principal Distribution
                           Amount shall be distributed to the Holders of the
                           Class M-3 Certificates, until the Certificate
                           Principal Balance of such Class has been reduced to
                           zero; and

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:

                           (i) to the Holders of the Class or Classes of
                           Certificates then entitled to receive distributions
                           in respect of principal, in an amount equal to the
                           principal portion of any Realized Losses incurred or
                           deemed to have been incurred on the Mortgage Loans,
                           applied to reduce the Certificate Principal Balance
                           of such Certificates until the aggregate Certificate
                           Principal Balance of such Certificates is reduced to
                           zero;

                           (ii) to the Holders of the Class or Classes of
                           Certificates then entitled to receive distributions
                           in respect of principal, in an amount equal to the
                           Overcollateralization Increase Amount, applied to
                           reduce the Certificate Principal Balance of such
                           Certificates until the aggregate Certificate
                           Principal Balance of such Certificates is reduced to
                           zero;

                           (iii) to the Holders of the Class M-1 Certificates,
                           in an amount equal to the Interest Carry Forward
                           Amount (plus accrued interest) allocable to such
                           Class of Certificates;

                           (iv) to the Holders of the Class M-2 Certificates, in
                           an amount equal to the Interest Carry Forward Amount
                           (plus accrued interest) allocable to such Class of
                           Certificates;

                           (v) to the Holders of the Class M-3 Certificates, in
                           an amount equal to the Interest Carry Forward Amount
                           (plus accrued interest) allocable to such Class of
                           Certificates;

                           (vi) to the Holders of the Class A Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (vii) to the Holders of the Class M-1 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall
                           allocated to such Certificates;

<PAGE>

                           (viii) to the Holders of the Class M-2 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (ix) to the Holders of the Class M-3 Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (x) to the Trustee, any due and unpaid Verification
                           Fee;

                           (xi) to the Holders of the Class CE Certificates, the
                           Interest Distribution Amount and any
                           Overcollateralization Reduction Amount for such
                           Distribution Date; and

                           (xii) to the Holders of the Class R-III Certificates,
                           any remaining amounts; provided that if such
                           Distribution Date is the Distribution Date
                           immediately following the expiration of the latest
                           Prepayment Charge term as identified on the Mortgage
                           Loan Schedule or any Distribution Date thereafter,
                           then any such remaining amounts will be distributed
                           FIRST, to the Holders of the Class P Certificates,
                           until the Certificate Principal Balance thereof has
                           been reduced to zero; and SECOND, to the Holders of
                           the Class R-III Certificates.

                  (b) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans or any Master Servicer Prepayment Charge
Payment Amount and shall distribute such amounts to the Holders of the Class P
Certificates. Such distributions shall not be applied to reduce the Certificate
Principal Balance of the Class P Certificates.

                  (c) 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(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance of
such Class of Certificates, 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

<PAGE>

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
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.

                  (d) 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. Neither the Holders of any Class of Certificates nor the Trustee nor
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.

                  (e) 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 (5) days after the related Determination Date, mail to each
Holder on such date 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 but
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Salomon Smith Barney
Inc. all such amounts, and all rights of non-tendering Certificateholders in

<PAGE>

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).

                  (f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.04 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC I Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC I Regular
Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC I Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.

                  SECTION 4.02. Statements to Certificateholders.

                  On each Distribution Date, the Trustee shall prepare and make
available to each Holder of the Regular Certificates, a statement as to the
distributions made on such Distribution Date setting forth:

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

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

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

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

                         (v) the aggregate Stated Principal Balance of the
                  Mortgage Loans and any REO Properties as of 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 as of the related Due Date
                  and the number and aggregate principle balance of all
                  Subsequent Mortgage Loans added during the preceding Due
                  Period;

<PAGE>

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

                      (viii) with respect to any Mortgage Loan 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 incurred
                  during the related Prepayment Period (or, in the case of
                  Bankruptcy Losses allocable to interest, during the related
                  Due Period), separately identifying whether such Realized
                  Losses constituted Bankruptcy Losses and the aggregate amount
                  of Realized Losses incurred since the Closing Date;

                         (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 of the
                  each Class of Certificates, after giving effect to the
                  distributions, and allocations of Realized Losses, made on
                  such Distribution Date, separately identifying any reduction
                  thereof due to allocations of Realized Losses;

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

                        (xv) the Interest Distribution Amount in respect of the
                  Class A Certificates, the Mezzanine Certificates and the Class
                  CE Certificates for such Distribution Date and the Interest
                  Carry Forward Amount, if any, with respect to the Class A
                  Certificates and the Mezzanine Certificates on such
                  Distribution Date, and in the case of the Class A
                  Certificates, the Mezzanine Certificates and the Class CE
                  Certificates, separately identifying any reduction thereof due
                  to allocations of Realized Losses, Prepayment Interest
                  Shortfalls and Relief Act Interest Shortfalls;

<PAGE>

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

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

                      (xviii) the Required Overcollateralized Amount and the
                  Credit Enhancement Percentage for such Distribution Date;

                      (xix) the Overcollateralization Increase Amount, if
                  any, for such Distribution Date;

                      (xx) the Overcollateralization Reduction Amount, if
                  any, for such Distribution Date;

                       (xxi) 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;

                      (xxii) 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;

                     (xxiii) the respective Pass-Through Rates applicable to the
                  Class A Certificates, the Mezzanine Certificates and the Class
                  CE Certificates for such Distribution Date and the
                  Pass-Through Rate applicable to the Class A Certificates and
                  the Mezzanine Certificates for the immediately succeeding
                  Distribution Date;

                      (xxiv) the amount on deposit in the Pre-Funding Account
                  and the Interest Coverage Account as of the Determination
                  Date; and

                       (xxv) for the distribution occurring on the Distribution
                  Date immediately following the end of the Funding Period, the
                  current balance on deposit in the Pre- Funding Account that
                  has not been used to purchase Subsequent Mortgage Loans and
                  that is being distributed to the Class A Certificateholders as
                  a mandatory prepayment of principal, if any, on such
                  Distribution Date.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders 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.

<PAGE>

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 furnish 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.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish 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.

                  The Trustee shall, upon request, furnish 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 Master Servicer Reporting 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

<PAGE>

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.

                  On or prior to each Master Servicer Reporting Date, the Master
Servicer shall provide in an electronic format acceptable to the Trustee the
data necessary for the Trustee to perform its verification duties set forth in
this Section 4.03(a). The Trustee or a third party reasonably acceptable to the
Trustee and the Depositor (the "Verification Agent") will perform such
verification duties and will use its best efforts to issue its findings in a
report (the "Verification Report") within ten (10) Business Days following the
Master Servicer Reporting Date; provided, however, that if the Verification
Agent is unable to issue the Verification Report within ten (10) Business Days
following the Master Servicer Reporting Date, the Verification Agent may issue
the Verification Report upon the completion of its verification duties. The
Trustee shall forward the Verification Report to the Master Servicer and shall
notify the Master Servicer if the Trustee has determined that the Master
Servicer did not deliver the appropriate Prepayment Charges to the Trustee in
accordance with Section 3.10 and Schedule 2 hereof. Such written notification
from the Trustee shall include the loan number, prepayment penalty code and
prepayment penalty amount as calculated by the Trustee or the Verification
Agent, as applicable, of each Mortgage Loan for which there is a discrepancy. If
the Master Servicer agrees with the verified amounts, the Master Servicer shall
adjust the immediately succeeding Remittance Report and the amount remitted to
the Trustee with respect to prepayments accordingly. If the Master Servicer
disagrees with the determination of the Trustee, the Master Servicer shall,
within five (5) Business Days of its receipt of the Verification Report, notify
the Trustee of such disagreement and provide the Trustee with detailed
information to support the Master Servicer's position. The Master Servicer and
the Trustee shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Master Servicer Remittance Date, and the Master Servicer
will indicate the effect of such resolution on the related Remittance Report and
shall adjust the amount remitted with respect to prepayments on such Master
Servicer Remittance Date accordingly. During such time as the Master Servicer
and the Trustee are resolving discrepancies with respect to the Prepayment
Charges, no payments in respect of any disputed Prepayment Charges will be
remitted to the Collection Account and the Trustee shall not be obligated to
remit such payments, unless otherwise required pursuant to Section 7.02 hereof.

                  In connection with such duties, the Trustee shall be able to
rely solely on the information provided to it by the Master Servicer and any
Verification Agent in accordance with this Section. The Trustee shall not be
responsible for verifying the accuracy of any of the information provided to it
by the Master Servicer or the Verification Agent. The costs of such
verification, whether performed by the Trustee or any third party on behalf of
the Trustee, shall be paid by the Trustee. Anything to the contrary herein
notwithstanding, the verification procedures set forth in this Section shall not
be performed after the earlier to occur of (i) the July 2005 Distribution Date
or (ii) the securities relating to any resecuritization of the Class P
Certificates have been paid in full.

                  (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

<PAGE>

related Due Date in respect of the Mortgage Loans, which Monthly Payments were
delinquent as of the close of business on the related Determination Date and
(ii) with respect to each REO Property, which REO Property was acquired during
or prior to the related Prepayment Period and as to which such REO Property an
REO Disposition did not occur during the related Prepayment Period, an amount
equal to the excess, if any, of the Monthly Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, 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 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of 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
any Master Servicer Remittance Date in the event that the amount remitted by the
Master Servicer to the Trustee on such date is less than the 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 REMIC I 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 or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such P&I Advance or Servicing Advance would, if made,
constitute a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance or that any proposed P&I Advance
or Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Trustee.

                  SECTION 4.04. Allocation of Realized Losses.

<PAGE>

                  (a) On or before each Determination 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 Bankruptcy Losses and (iii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. On or before each Determination 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 on the Master Servicer Reporting 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 allocated to any
REMIC II Regular Interest pursuant to Section 4.04(c), shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero and fifth, to the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated, or in the case of a Class CE
Certificate, by reducing the amount otherwise payable in respect thereof
pursuant to Section 4.01(a)(4)(x). No allocations of any Realized Losses shall
be made to the Certificate Principal Balances of the Class A Certificates or the
Class P Certificates.

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC I
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Interest payable to the REMIC I Regular Interest I-LT1 and REMIC
I Regular Interest I-LT6 up to an aggregate amount equal to the REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT6 up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of REMIC
I Regular Interest I-LT1, REMIC I Regular Interest I-LT5 and REMIC I Regular
Interest I-LT6, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LT5 has been reduced to zero; fourth, to the
Uncertificated Balances of REMIC I Regular

<PAGE>

Interest I-LT1, REMIC I Regular Interest I-LT4 and REMIC I Regular Interest
I-LT6, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LT4 has been reduced to zero; fifth, to the Uncertificated
Balances of REMIC I Regular Interest I-LT1, REMIC I Regular Interest I-LT3 and
REMIC I Regular Interest I-LT6, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LT3 has been reduced to
zero and sixth, to the Uncertificated Balances of REMIC I Regular Interest
I-LT1, REMIC I Regular Interest I-LT2 and REMIC I Regular Interest I-LT6, 98%,
1% and 1%, respectively, until the Uncertificated Balance of REMIC I Regular
Interest I-LT2 has been reduced to zero.

                  (d) All Realized Losses on the REMIC II Regular Interests
shall be allocated by the Trustee on each Distribution Date among the REMIC II
Regular Interests in the proportion that Realized Losses are allocated to the
related Uncertificated Corresponding Component.

                  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. Commission Reporting.

                  Within 15 days after each Distribution Date, the Trustee shall
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 file a Form 15 Suspension Notification with respect to
the Trust Fund, if applicable. Prior to March 31, 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. Promptly after filing any Form 8-K or Form 10-K
pursuant to this Section 4.06, the Trustee shall deliver a copy of such Form 8-K
or Form 10-K, as the case may be, to the Depositor. 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.

                  SECTION 4.07. Pre-Funding Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Pre-Funding Account, Norwest Bank Minneosta, National
Association as Trustee for the registered holders of Ameriquest Mortgage
Securities Inc., Floating Rate Mortgage Pass-Through Certificates, Series
2000-2" (the

<PAGE>

"Pre-Funding Account"). The Trustee shall, promptly upon receipt, deposit in the
Pre-Funding Account and retain therein the Original Pre-Funded Amount remitted
on the Closing Date to the Trustee by the Depositor. Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.

                  (b) The Trustee will invest funds deposited in the Pre-Funding
Account in Permitted Investments of the kind described in clauses (i), (v) or
(vi) of the definition of Permitted Investments, as directed by the Master
Servicer, with a maturity date no later than the second Business Day preceding
each Distribution Date. For federal income tax purposes, the holder of the
largest Percentage Interest of the Residual Certificates shall be the owner of
the Pre-Funding Account and shall report all items of income, deduction, gain or
loss arising therefrom. All income and gain realized from investment of funds
deposited in the Pre-Funding Account shall be transferred to the Interest
Coverage Account on the Business Day immediately preceding each Distribution
Date.
The Master Servicer shall deposit in the Pre-Funding Account the amount of any
net loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss without any right of reimbursement therefor. The
Pre-Funding Account will not be an asset of any of
REMIC
I, REMIC II or REMIC III.

                  (c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:

                         (i) On any Subsequent Transfer Date, the Trustee shall
                  withdraw from the Pre-Funding Account an amount equal to 100%
                  of the Stated Principal Balances of the Subsequent Mortgage
                  Loans transferred and assigned to the Trustee for deposit in
                  the Mortgage Pool on such Subsequent Transfer Date and pay
                  such amount to or upon the order of the Depositor upon
                  satisfaction of the conditions set forth in Section 2.11 with
                  respect to such transfer and assignment;

                        (ii) if the amount on deposit in the Pre-Funding Account
                  has not been reduced to zero during the Funding Period, on the
                  day immediately following the termination of the Funding
                  Period, the Trustee shall deposit into the Distribution
                  Account any amounts remaining in the Pre-Funding Account, net
                  of any gain realized from the investment of funds on deposit
                  therein to the extent not previously paid to the Interest
                  Coverage Account, for distribution in accordance with the
                  terms hereof;

                       (iii) to withdraw any amount not required to be
                  deposited in the Pre- Funding Account or deposited therein in
                  error;

                       (iv) to distribute to the Interest Coverage Account any
                  income and gain realized from the investment of funds in the
                  Pre-Funding Account; and

                         (v) to clear and terminate the Pre-Funding Account upon
                  the earlier to occur of (A) the day immediately following the
                  end of the Funding Period and (B) the termination of this
                  Agreement, with any amounts remaining on deposit therein being
                  paid to the Holders of the Certificates then entitled to
                  distributions in respect of principal.

<PAGE>

                  SECTION 4.08. Interest Coverage Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Interest Coverage Account, Norwest Bank Minnesota,
National Association, as Trustee for the registered holders of Ameriquest
Mortgage Securities Inc., Floating Rate Mortgage Pass-Through Certificates,
Series 2000-2" (the "Interest Coverage Account"). The Trustee shall, promptly
upon receipt, deposit in the Interest Coverage Account and retain therein the
Interest Coverage Amount remitted on the Closing Date to the Trustee by the
Depositor. Funds deposited in the Interest Coverage Account shall be held in
trust by the Trustee for the Certificateholders for the uses and purposes set
forth herein.

                  (b) The Trustee will invest funds deposited in the Interest
Coverage Account in Permitted Investments of the kind described in clauses (i),
(v) or (vi) of the definition of Permitted Investments, as directed by the
Master Servicer, with a maturity date no later than the second Business Day
preceding each Distribution Date. For federal income tax purposes, the holder of
the largest Percentage Interest of the Residual Certificates shall be the owner
of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any of REMIC I, REMIC II or REMIC III. All income and
gain realized from investment of funds deposited in the Interest Coverage
Account shall be for the sole and exclusive benefit of the Master Servicer and
shall be remitted by the Trustee to the Master Servicer on the first Business
Day following each Distribution Date. The Master Servicer shall deposit in the
Interest Coverage Account the amount of any net loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss.

                  (c) With respect to each Distribution Date during the Funding
Period and on the Distribution Date immediately following the end of the Funding
Period, the Trustee shall withdraw from the Interest Coverage Account and
deposit in the Distribution Account an amount, as provided in the related
Remittance Report, equal to (i) 30 days' interest on the Original Pre-Funded
Amount calculated at an annual rate equal to the weighted average of the Net
Mortgage Rates of the Mortgage Loans in the Trust Fund as of the commencement of
the related Due Period, minus (ii) the sum of (1) any interest payments received
by the Master Servicer on Subsequent Mortgage Loans during the related Due
Period and (2) any P&I Advance in respect of the interest portion of delinquent
Monthly Payments on the Subsequent Mortgage Loans conveyed during the related
Due Period to the Trustee for the benefit of the Certificateholders.

                  (d) On the first Distribution Date following the Closing Date,
after distributions to the Certificateholders on such Distribution Date, the
Trustee shall recalculate the Interest Coverage Amount to determine the amount
necessary to fund 30 days of interest on the Pre-Funding Amount remaining on
such Distribution Date, using the following calculation: the product of (a) a
fraction, the numerator of which is (1) the product of the Pre-Funding Account
Balance on such Distribution Date and (2) the Net WAC Pass-Through Rate minus
2.5%, and the denominator of which is 360 and (b) 31 (such recalculated amount
the "Recalculated Interest Coverage Amount").
The excess, if any, of the amount in the Interest Coverage Account (net of the
amount of the Initial Deposit) after such distribution over the Recalculated
Interest Coverage Amount shall be withdrawn by the Trustee and paid to the
Depositor or its designee on or before the next Business Day.

<PAGE>

                  (e) Upon the earlier of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balance of the Class A Certificates and the Mezzanine Certificates to
zero or (iii) the termination of this Agreement in accordance with Section 9.01,
any amount remaining on deposit in the Interest Coverage Account after
distributions pursuant to paragraph (c) and (d) above shall be withdrawn by the
Trustee and paid to the Depositor or its designee.

<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 REMIC I. 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-9. 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 and
delivered by the Trustee, and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar 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 Certificate Registrar 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 and the Mezzanine 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

<PAGE>

as such. The Book-Entry 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 $10,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 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 or 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 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.

<PAGE>

                  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. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.

                  (b) No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate 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 Class CE Certificate, Class P Certificate or
Residual 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 and the Certificate
Registrar shall each 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. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class CE Certificates, the Class P
Certificates or the Residual 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 Class
CE Certificate, a Class P Certificate or a Residual Certificate shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar
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) (i) No transfer of a Mezzanine Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101

<PAGE>

("Plan Assets") unless the Depositor, the Master Servicer and the Trustee are
provided with an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trustee and the Master Servicer that the purchase of such
Certificates is permissible under applicable law, will not constitute or result
in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Depositor, the Master Servicer, the Trustee or the Trust Fund to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Trustee or the Trust Fund. In lieu of such Opinion of Counsel, any
prospective Transferee of such Certificates may provide a certification (which
the Transferee will be deemed to have represented such certification) of the
foregoing 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. The Transferee of a Mezzanine Certificate that is
a Plan, a Person acting, directly or indirectly, on behalf of any such Plan or a
person using Plan Assets to acquire Mezzanine Certificates will be deemed to
have represented that such acquisition is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Master Servicer,
the Trustee or the Trust Fund to any obligation in addition to those undertaken
in this Agreement and the following conditions are met: (a) the source of funds
used to purchase such Mezzanine Certificates is an "insurance company general
account" (as such term is defined in PTCE 95-60), (b) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied 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 exceed 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 Mezzanine Certificates.

                         (ii)  No transfer of a Class CE Certificate, Class P
Certificate or 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 Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets")
unless the Depositor, the Master Servicer and the Trustee are provided with an
Opinion of Counsel which establishes to the satisfaction of the Depositor, the
Trustee and the Master Servicer that the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, the Master Servicer, the Trustee or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Trustee or the Trust Fund.

<PAGE>

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

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

                                    (B) In connection with any proposed Transfer
                           of any Ownership Interest in a Residual Certificate,
                           the Trustee shall require delivery to it and shall
                           not register the Transfer of any Residual Certificate
                           until its receipt of an affidavit and agreement (a
                           "Transfer Affidavit and Agreement"), in the form
                           attached hereto as Exhibit F-2 from the proposed
                           Transferee, in form and substance satisfactory to the
                           Trustee, representing and warranting, among other
                           things, that such Transferee is a Permitted
                           Transferee, that it is not acquiring its Ownership
                           Interest in the Residual Certificate that is the
                           subject of the proposed Transfer as a nominee,
                           trustee or agent for any Person that is not a
                           Permitted Transferee, that for so long as it retains
                           its Ownership Interest in a Residual Certificate, it
                           will endeavor to remain a Permitted Transferee, and
                           that it has reviewed the provisions of this Section
                           5.02(d) and agrees to be bound by them.

                                    (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 (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

<PAGE>

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

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

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

                                    (B) If any purported Transferee shall become
                  a holder of a Residual Certificate in violation of the
                  restrictions in this Section 5.02(d) and to the extent that
                  the retroactive restoration of the rights of the holder of
                  such Residual Certificate as described in clause (iii)(A)
                  above shall be invalid, illegal or unenforceable, then the
                  Trustee shall have the right, without notice to the holder or
                  any prior holder of such Residual Certificate, to sell such
                  Residual Certificate to a purchaser selected by the Trustee on
                  such terms as the Trustee may choose. Such purported
                  Transferee shall promptly endorse and deliver each Residual
                  Certificate in accordance with the instructions of the
                  Trustee. Such purchaser may be the Trustee itself or any
                  Affiliate of the Trustee. The proceeds of such sale, net of
                  the commissions (which may include commissions payable to the
                  Trustee or its 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

<PAGE>

                  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 each Rating
                           Agency to the effect that the modification, addition
                           to or elimination of such provisions will not cause
                           such 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 any of REMIC I,
                           REMIC II or REMIC III to cease to qualify as a REMIC
                           and will not cause any of REMIC I, REMIC II or REMIC
                           III, as the case may be, to be subject to an
                           entity-level tax caused by the Transfer of any
                           Residual Certificate to a Person that is not a
                           Permitted Transferee or (y) a Person other than the
                           prospective transferee to be subject to a REMIC-tax
                           caused by the Transfer of a Residual Certificate to a
                           Person that is not a Permitted Transferee.

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall 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 and cause the Certificate
Registrar to 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 and the Certificate Registrar
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

<PAGE>

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 Certificate Registrar in accordance with
its customary procedures.

                  (i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in January and June
of each year, commencing in June 2000.

                  (j) Any attempted or purported transfer of any Certificate in
violation of the provisions of Section 5.02(c) hereof shall be void ab initio
and such Certificate shall be considered to have been held continuously by the
prior permitted Holder.

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

                  If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar 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 Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

                  SECTION 5.04. Persons Deemed Owners.

                  The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar 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, the Certificate Registrar 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 Class CE
Certificate, Class P Certificate or Residual 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 Class CE Certificates, Class P
Certificates or the

<PAGE>

Residual 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 Class CE Certificate, a
Class P Certificate or a Residual Certificate, the private placement memorandum
or other disclosure document relating to such Certificates, if any, 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 or Servicing Advance was, or if made, would be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively, 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.

<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 Agencies'
ratings of the Class A Certificates and the Mezzanine 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 Agencies).

                  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

<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
relating 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 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 and written confirmation from each Rating Agency
(which confirmation shall be furnished to the Depositor and the Trustee) that
such resignation will not cause such Rating Agency to reduce the then current
rating of the Class A Certificates or the Mezzanine Certificates. 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.

                  Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract

<PAGE>

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 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 (or any such Sub-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.

<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 (or, if the
                  Master Servicer is the Originator, the failure of the
                  Originator to repurchase a Mortgage Loan as to which a breach
                  has been established that requires a repurchase pursuant to
                  the terms of Section 7 of the Mortgage Loan Purchase
                  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
                  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

<PAGE>

                  assets and liabilities or similar proceedings of or relating
                  to the Master Servicer or of or relating to all or
                  substantially all of its property; or

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

                        (vi) any failure by the Master Servicer of the Master
                  Servicer Termination Test; or

                       (vii) 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 until 3:00 p.m. New York time on the
                  Business Day immediately following the Master Servicer
                  Remittance Date.

If a Master Servicer Event of Default described in clauses (i) through (vi) 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 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
(vii) 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

<PAGE>

termination, whether in respect of P&I Advances or otherwise, and shall continue
to be entitled to the benefits of Section 6.03, notwithstanding any such
termination, with respect to events occurring prior to such termination). For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of a Master Servicer Event of Default unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, REMIC I 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 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) 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 Fee 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 each 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

<PAGE>

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

                  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 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

<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.

                  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 (vii) 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.

<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 the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.

                  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 an
                  error of judgment made in good faith by a Responsible Officer
                  or Responsible Officers of the Trustee, unless it shall be
                  proved that the Trustee was negligent in ascertaining the
                  pertinent facts; and

                       (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

<PAGE>

                  available to the Trustee, or exercising any trust or power
                  conferred upon the Trustee, under this Agreement.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a)      Except as otherwise provided in Section 8.01:

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

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

                       (iii) The Trustee shall be under no obligation to
                  exercise any of the trusts or powers vested in it by this
                  Agreement or to institute, conduct or defend any litigation
                  hereunder or in relation hereto at the request, order or
                  direction of any of the Certificateholders, pursuant to the
                  provisions of this Agreement, unless such Certificateholders
                  shall have offered to the Trustee reasonable security or
                  indemnity against the costs, expenses and liabilities which
                  may be incurred therein or thereby; nothing contained herein
                  shall, however, relieve the Trustee of the obligation, upon
                  the occurrence of a Master Servicer Event of Default (which
                  has not been cured or waived), to exercise such of the rights
                  and powers vested in it by this Agreement, and to use the same
                  degree of care and skill in their exercise as a prudent person
                  would exercise or use under the circumstances in the conduct
                  of such person's own affairs;

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

                         (v) Prior to the occurrence of a Master Servicer Event
                  of Default hereunder and after the curing of all Master
                  Servicer Events of Default which may have occurred, the
                  Trustee shall not be bound to make any investigation into the
                  facts or matters stated in any resolution, certificate,
                  statement, instrument, opinion, report, notice, request,
                  consent, order, approval, bond or other paper or document,
                  unless requested in writing to do so by the Holders of
                  Certificates entitled to at least 25% of the Voting Rights;
                  provided, however, that if the payment within a reasonable
                  time to the Trustee of the costs, expenses or liabilities
                  likely to be incurred by it in the making of such
                  investigation is, in the opinion of the Trustee, not
                  reasonably assured to the Trustee by such Certificateholders,
                  the Trustee may require reasonable

<PAGE>

                  indemnity against such 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; and

                       (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.

                  (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 Certificate
Registrar 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 Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.10.

                  SECTION 8.04. Trustee May Own Certificates.

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

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at anytime insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee, shall be indemnified by REMIC I 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

<PAGE>

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 the Master Servicer's actions or omissions 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. It is understood by the parties hereto that
a "claim" as used in the preceding sentence includes any claim for payment or
indemnification made by the Custodian under Section 2.6 or Section 3.2 of the
Custodial Agreement. 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 hereunder 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 Trustee shall pay any annual rating agency fees of
Fitch, Moody's and S&P 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 Originator, 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, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07. Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and

<PAGE>

to the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders 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 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 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 (other than any Mortgage Files at the time held by a Custodian,
which Custodian shall become the agent of any successor trustee hereunder), and
the Depositor and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.

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

<PAGE>

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

                  SECTION 8.09. Merger or Consolidation of Trustee.

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

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

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I 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 REMIC I, and to
vest in such Person or Persons, in such capacity, such title to REMIC I, 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 so to do, or in case a Master Servicer Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I 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

<PAGE>

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. Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement. The Trustee initially appoints the Custodian as
Custodian, and the Depositor and the Master Servicer consent to such
appointment. Subject to Article VIII hereof, the Trustee agrees to comply with
the terms of each Custodial Agreement and to enforce the terms and provisions
thereof against the Custodian for the benefit of the Certificateholders having
an interest in any Mortgage File held by such Custodian. Each Custodian shall be
a depository institution or trust company subject to supervision by federal or
state authority, shall have combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.01. In no event shall the appointment of any Custodian pursuant to a
Custodial Agreement diminish the obligations of the Trustee hereunder.

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will appoint an office or agency in the City of
New York 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 of the Trustee.

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

<PAGE>

                  (i) The Trustee is a national banking association duly
         organized, validly existing and in good standing under the laws of the
         United States.

                  (ii) The execution and delivery of this Agreement by the
         Trustee, and the performance and compliance with the terms of this
         Agreement by the Trustee, will not violate the Trustee's charter or
         bylaws or constitute a default (or an event which, with notice or lapse
         of time, or both, would constitute a default) under, or result in the
         breach of, any material agreement or other instrument to which it is a
         party or which is applicable to it or any of its assets.

                  (iii) The Trustee 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 Master Servicer and the Depositor, constitutes a valid,
         legal and binding obligation of the Trustee, enforceable against the
         Trustee 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) The Trustee 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 the Trustee's good faith and reasonable
         judgment, is likely to affect materially and adversely either the
         ability of the Trustee to perform its obligations under this Agreement
         or the financial condition of the Trustee.

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

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01 Termination Upon Repurchase or Liquidation of All
                               Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (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 in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes 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 Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; 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 Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I 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 REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and 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 (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I 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 Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I 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
less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount. By acceptance of the Residual Certificates, the Holders of the Residual
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE
Certificates.

                  (c) Notice of the liquidation of the REMIC I 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 by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month

<PAGE>

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 in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related 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 REMIC I Regular Interests, the REMIC II Regular
Interests or 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. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day of the month next preceding the month of the final distribution on
the Certificates an amount in immediately available funds equal to the
above-described purchase 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 Terminator 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.

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

<PAGE>

                  SECTION 9.02 Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                         (i) The Trustee shall specify the first day in the
                  90-day liquidation period in a statement attached to REMIC
                  I's, REMIC II's and REMIC III's final Tax Return pursuant to
                  Treasury regulation Section 1.860F-1 and 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 Terminator;

                        (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
                  REMIC I to the Terminator 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
                  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 applicable Terminator (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 each of REMIC I, REMIC
II and REMIC III 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 each of REMIC I, REMIC II and REMIC III, which authorization shall be
binding upon all successor Certificateholders.

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each of REMIC I, REMIC II
and REMIC III as a REMIC under the Code and, if necessary, under applicable
state law. Each such election will be made 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
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Certificates shall be designated as the
Residual Interests in REMIC I. The REMIC II Regular Interests shall be
designated as the Regular Interests in REMIC II and the Class R-II Certificates
shall be designated as the Residual Interests in REMIC II. The Class A
Certificates, the Mezzanine Certificates, the Class CE Certificates and the
Class P Certificates shall be designated as the Regular Interests in REMIC III
and the Class R-III Certificates shall be designated as the Residual Interests
in REMIC III. The Trustee shall not permit the creation of any "interests" in
REMIC I, REMIC II or REMIC III (within the meaning of Section 860G of the Code)
other than the REMIC I Regular Interests, the REMIC II Regular Interests and the
interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I, REMIC II and REMIC III 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 any of REMIC I, REMIC II
or REMIC III that involve the Internal Revenue Service or state tax
authorities), other than the expense of obtaining any tax related Opinion of
Counsel except as specified herein.
The Trustee, as agent for all of REMIC I's, REMIC II's and REMIC III's tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving any of REMIC I, REMIC II or REMIC III and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC 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.

<PAGE>

                  (e) The Trustee shall perform on behalf of each of REMIC I,
REMIC II and REMIC III all reporting and other tax compliance duties that are
the responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of REMIC I, REMIC II and REMIC
III. 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 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 (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of REMIC I, REMIC II or REMIC III 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 effect
that the contemplated action will not, with respect to any of REMIC I, REMIC II
or REMIC III, endanger such status or result in the imposition of such a tax,
nor shall the Master Servicer take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to REMIC I, REMIC II or REMIC III or the respective assets of each,
or causing REMIC I, REMIC II or REMIC III 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 REMIC I,
REMIC II or REMIC III, and the Master Servicer shall not take any such action or
cause either REMIC I, REMIC II or REMIC III 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. At
all times as may be required by the Code, the Trustee will ensure that
substantially all of the assets of

<PAGE>

both REMIC I and REMIC II 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.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such 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 each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating, without
regard to any action taken by any party other than the Trustee, the Trustee's
compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC I, REMIC II and REMIC
III on a calendar year and on an accrual basis. The Trustee will apply for an
Employer Identification Number for the Trust from the Internal Revenue Service
via a 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 any of REMIC I, REMIC II or REMIC III other than
in connection with any Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03 unless it shall have received an Opinion of Counsel
to the effect that the inclusion of such assets in the Trust Fund will not cause
the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.

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

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets

<PAGE>

for any of REMIC I, REMIC II or REMIC III (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 any of REMIC I, REMIC II or REMIC III after the Closing Date
(other than a Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee) that such sale, disposition, substitution, acquisition or contribution
will not (a) affect adversely the status of any of REMIC I, REMIC II or REMIC
III as a REMIC or (b) cause any of REMIC I, REMIC II or REMIC III 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, caused solely by the Trustee's
failure to act in accordance with its standard of care 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 Article III or this Article X.

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                   This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian 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 in any Custodial Agreement, or (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
in any Custodial Agreement which shall not be inconsistent with the provisions
of this Agreement or such Custodial 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 or any Custodial 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 any Custodial 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 any of REMIC I, REMIC II or REMIC III
pursuant to the REMIC Provisions or cause any of REMIC I, REMIC II or REMIC III
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.

<PAGE>

                  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 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.

                  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

<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, facsimile, electronic mail or delivered in any other manner
specified herein, to (a) in the case of the Depositor, 1100 Town & Country Road,
Suite 1100, Orange, California 92868, Attention: Capital Markets (telecopy
number (714) 245-0198), 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, 1100 Town & Country Road,
11th Floor, Orange, California 92868, Attention: General Counsel (telecopy
number: (714) 564-9639), 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, 11000 Broken Land Parkway,
Columbia, Maryland 21044, Attention: Securities Administration Services
(telecopy number (410) 884-2360), with a copy to the Trustee at Sixth Street &
Marquette Avenue, MAC N9311-161 Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services (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 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.

<PAGE>

                  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 Agencies.

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

<TABLE>
<CAPTION>

<S>               <C>      <C>
                  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.
</TABLE>

                  In addition, the Trustee shall promptly furnish to each 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 each Rating Agency copies of the following:

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

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

<PAGE>

                  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 Fitch, Inc., One State Street Plaza, New York, New York 10004, Moody's
Investors Service, 99 Church Street, New York, New York 10007 and to Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., 25 Broadway, New York,
New York 10004, or such other addresses as the Rating Agencies 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 or the Originator. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Originator, 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
or the Originator 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 Originator and the Depositor to the Trustee of a security interest in all of
the Originator's and 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
obliga tions described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.

<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.

                                         AMERIQUEST MORTGAGE
                                         SECURITIES
                                         INC.,
                                         as Depositor

                                         By:      /s/ John D. Grazer
                                            ------------------------
                                         Name:    John D. Grazer
                                         Title:   CFO

                                         AMERIQUEST MORTGAGE COMPANY,
                                         as Master Servicer

                                         By:       /s/ John D. Grazer
                                            ------------------------
                                         Name:    John D. Grazer
                                         Title:   EVP/CFO

                                         NORWEST BANK MINNESOTA,
                                         NATIONAL ASSOCIATION,
                                         as Trustee

                                         By:      /s/  Randall S. Reider
                                            ---------------------------
                                         Name:    Randall S. Reider
                                         Title:   Assistant Vice President

<PAGE>

STATE OF CALIFORNIA    )
                             ) ss.:
COUNTY OF ORANGE       )

                  On the __th day of __________, 2000, before me, a notary
public in and for said State, personally appeared ____________, known to me to
be an ________________ of Ameriquest Mortgage Securities 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 CALIFORNIA    )
                             ) ss.:
COUNTY OF ORANGE       )

                  On the __th day of _________ 2000, before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _________________ of Ameriquest Mortgage Company, 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 NEW YORK      )
                            ) ss.:
COUNTY OF NEW YORK     )

                  On the 23rd day of June 2000, before me, a notary public in
and for said State, personally appeared Randall S. Reider, known to me to be an
Assistant Vice President of Norwest 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 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
         (THE "CODE").

Series 2000-2, Class A

Pass-Through Rate: Variable

Date of Pooling and Servicing Agreement and
Cut-off Date: June __, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Certificate Principal Balance of the
Class A Certificates as of the Issue Date:
$_____________

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

CUSIP:

         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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class A Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 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 and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A Certificates, 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 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-

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus ____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                  -4-

                  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 therein set forth, 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.

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                     CERTIFICATE OF AUTHENTICATION
                     -----------------------------

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 M-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
         (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES
         TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH
         THE PROCEDURES DESCRIBED HEREIN.

Series 2000-2, Class M-1

Pass-Through Rate: Variable

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class M-1 Certificates as of the Issue
Date:  $____________

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

CUSIP:

         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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 M-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 and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-1 Certificates, 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

<PAGE>

                                       -3-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus ____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in

<PAGE>

                                       -4-

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 therein set forth, 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 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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                     CERTIFICATE OF AUTHENTICATION
                     -----------------------------

                  This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 M-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
         (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES
         AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), OR THE CODE SHALL BE MADE EXCEPT IN
         COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

Series 2000-2, Class M-2

Pass-Through Rate: Variable

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class M-2 Certificates as of the Issue
Date:  $_____________

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

CUSIP:

         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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 M-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 and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-2 Certificates, 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

<PAGE>

                                       -3-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus _____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Pass-Through Certificates of the Series
specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                       -4-

                  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 therein set forth, 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 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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                     CERTIFICATE OF AUTHENTICATION
                     -----------------------------

                  This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 M-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
         (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES,
         THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO
         THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), OR THE CODE SHALL BE MADE EXCEPT IN
         ACCORDANCE WITH THE PROCEDURES DESCRIBED HEREIN.

Series 2000-2, Class M-3

Pass-Through Rate: Variable

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class M-3 Certificates as of the Issue
Date:  $_____________

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

CUSIP:

         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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 M-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 and is the registered owner of Class M-3 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-3 Certificates, 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

<PAGE>

                                       -3-

distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus _____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in

<PAGE>

                                       -4-

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 therein set forth, 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 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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                     CERTIFICATE OF AUTHENTICATION
                     -----------------------------

                  This is one of the Class M-3 Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 CE 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
         (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES
         AND THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE
         POOLING AND SERVICING 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.

Series 2000-2, Class CE

Pass-Through Rate: Variable

Date of Pooling and Servicing Agreement
and Cut-off Date:  June 1, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Notional Amount of the Class CE
Certificates as of the Issue Date:
$____________

Notional Amount: $_____________

<PAGE>

Aggregate Certificate Principal Balance of
the Class CE Certificates as of the Issue
Date:  $____________

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 CE 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 and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class CE Certificates, 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

<PAGE>

                                       -4-

such distribution and only upon 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 Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations 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 therein set forth, 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.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar 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. Neither the Depositor, the Certificate
Registrar 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, the Certificate
Registrar 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 Certificate Registrar 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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                       -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan 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 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at 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 Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
         CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
         SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
         (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>

                                      -11-

Series 2000-2, Class P

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date:
July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class P Certificates as of the Issue Date:
$100.00

Denomination:  $_____________

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 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>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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 P 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 and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class P Certificates, 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

<PAGE>

                                       -4-

such distribution and only upon 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 Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations 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 therein set forth, 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.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar 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, the Certificate
Registrar 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, the Certificate
Registrar 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 Certificate Registrar 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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                       -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan 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 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at 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 Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 R-I CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED
         STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
         INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
         RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
         REVENUE CODE OF 1986 (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.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), 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 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

<PAGE>

         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 POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2000-2, Class R-I

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date: July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class R-I Certificates as of the Issue
Date:  100.00% Percentage Interest

Denomination:  100.00% Percentage Interest

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-I Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-I Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-I Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-I Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-I Certificates, 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

<PAGE>

                                  -4-

such distribution and only upon 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 Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations 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 therein set forth, 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.

<PAGE>

                                  -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A 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. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-I Certificates have been designated as a
residual interest in 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-I 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

<PAGE>

                                  -6-

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.

                  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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 R-II CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED
         STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
         INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
         RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
         REVENUE CODE OF 1986 (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.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), 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 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

<PAGE>

         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 POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2000-2, Class R-II

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date: July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class R-II Certificates as of the Issue
Date:  100.00% Percentage Interest

Denomination:  100.00% Percentage Interest

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-II Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-II Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-II Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-II Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-II Certificates, 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

<PAGE>

                                       -4-

such distribution and only upon 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 Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations 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 therein set forth, 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.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A 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. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-II Certificates have been designated as a
residual interest in 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-II 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

<PAGE>

                                       -6-

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.

                  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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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 R-III 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 (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.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
         AMENDED ("ERISA"), 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 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

<PAGE>

         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 POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2000-2, Class R-III

Date of Pooling and Servicing Agreement
and Cut-off Date: June 1, 2000

First Distribution Date: July 15, 2000

No. ___

Aggregate Certificate Principal Balance of
the Class R-III Certificates as of the Issue
Date:  100.00% Percentage Interest

Denomination:  100.00% Percentage Interest

Master Servicer:
Ameriquest Mortgage Company

Trustee:  Norwest Bank Minnesota,
National Association

Issue Date: June __, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES 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 denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-III Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-III Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities 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 15th day of each month or, if such 15th 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-III 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 and is the registered owner of Class R-III Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-III Certificates, 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

<PAGE>

                                  -4-

such distribution and only upon 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 Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein 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
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders 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 therein set forth, 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 and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations 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 therein set forth, 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.

<PAGE>

                                  -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A 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. Neither the Depositor nor 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-III 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-III 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

<PAGE>

                                  -6-

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.

                  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 the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar 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 to the Certificateholders 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
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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
10% of the aggregate Stated Principal Balance of the Mortgage Loans at 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 Certificate Registrar, 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: June __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     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

TEN ENT  - as tenants by the entireties

JT TEN   - as joint tenants with right
           if survivorship and not as
           tenants in common

UNIF GIFT MIN ACT -      Custodian
                     -------------
                     (Cust)  (Minor)
                     under Uniform Gifts
                     to Minors Act
                     _________________
                          (State)

                      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)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
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 Certificate Registrar 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]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

                  Re:  Pooling and Servicing Agreement, dated as of June 1,
                       2000, among Ameriquest Mortgage Securities Inc.,
                       Ameriquest Mortgage Company and Norwest Bank Minnesota,
                       National Association, Floating Rate Mortgage Pass-Through
                       Certificates, Series 2000-2
                       ---------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Custodial Initial Certification delivered by Chase Bank
of Texas, National Association, as Custodian, pursuant to the Custodial
Agreement dated as of June __, 2000, by and among Norwest Bank Minnesota,
National Association, Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
Company and Chase Bank of Texas, National Association.

         The Trustee (nor the Custodian on its behalf) has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically required in the above-referenced Pooling and Servicing Agreement.
The Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuine ness 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.

                                               NORWEST BANK MINNESOTA,
                                               NATIONAL ASSOCIATION

                                               By:____________________________
                                               Name:
                                               Title:

<PAGE>

                                   EXHIBIT C-2
                                   -----------

                     FORM OF TRUSTEE'S INTERIM CERTIFICATION

                                        [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

                  Re:  Pooling and Servicing Agreement, dated as of June 1,
                       2000, among Ameriquest Mortgage Securities Inc.,
                       Ameriquest Mortgage Company and Norwest Bank Minnesota,
                       National Association, Floating Rate Mortgage Pass-Through
                       Certificates, Series 2000-2
                       ---------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Custodial Interim Certification delivered by Chase Bank
of Texas, National Association, as Custodian, pursuant to the Custodial
Agreement dated as of June __, 2000, by and among Norwest Bank Minnesota,
National Association, Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
Company and Chase Bank of Texas, National Association.

         The Trustee (nor the Custodian on its behalf) has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically required in the above-referenced Pooling and Servicing Agreement.
The Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuine ness 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.

                                                 NORWEST BANK MINNESOTA,
                                                 NATIONAL ASSOCIATION

                                                 By:____________________________
                                                 Name:
                                                 Title:

<PAGE>

                                   EXHIBIT C-3
                                   -----------

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                               [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California  92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

                  Re:  Pooling and Servicing Agreement, dated as of June 1,
                       2000, among Ameriquest Mortgage Securities Inc.,
                       Ameriquest Mortgage Company and Norwest Bank Minnesota,
                       National Association Floating Rate Mortgage Pass-Through
                       Certificates, Series 2000-2
                       --------------------------------------------------------

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 listed on the attachment hereto), it or a Custodian on its
behalf has received:

                (i) the original recorded Mortgage, and the original recorded
         power of attorney, if the Mortgage was executed pursuant to a power of
         attorney, or a certified copy thereof in those instances where the
         public recording office retains the original or where the original has
         been lost; and

               (ii) an original recorded Assignment to the Trustee together with
         the original recorded Assignment or Assignments showing a complete
         chain of assignment from the originator, or a certified copy of such
         Assignments in those instances where the public recording retains the
         original or where original has been lost; and

              (iii) the original lender's title insurance policy.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced 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

<PAGE>

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.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                              NORWEST BANK MINNESOTA,
                                              NATIONAL ASSOCIATION

                                              By:__________________________
                                              Name:
                                              Title:

<PAGE>

                                                                       EXHIBIT D

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated June 21, 2000, between Ameriquest Mortgage Company, a Delaware corporation
(the "Originator") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              Preliminary Statement
                              ---------------------

                  The Originator 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 shall deposit the Mortgage Loans into
a mortgage pool constituting the trust fund. The trust fund will be evidenced by
a single series of floating rate mortgage pass-through certificates designated
as Series 2000-2 (the "Certificates"). The Certificates will consist of nine
classes of certificates. The Class CE Certificates, the Class P Certificates,
the Class R-I Certificates, the Class R-II Certificates and the Class R-III
Certificates (collectively, the "Non-offered Certificates") will be delivered to
the Originator as partial consideration for the Mortgage Loans as further
described below. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of June 1, 2000 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee (in such
capacity the "Trustee"). Pursuant to the Pooling and Servicing Agreement, the
Depositor 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 Certificateholders. 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 Originator agrees to
sell, and the Purchaser agrees to purchase, on or before June 23, 2000 (the
"Closing Date"), certain adjustable- rate conventional residential mortgage
loans (the "Mortgage Loans"), having an aggregate principal balance as of the
close of business on June 1, 2000 (the "Cut-off Date") of approximately
$500,326,976.55, after giving effect to all payments due on the Mortgage Loans
on or before the Cut- off Date (the "Closing Balance"), whether or not received
including the right to any Prepayment Charges collected after the Cut-off Date
from the Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans. Any payments (including Prepayment Charges) collected on or before the
Cut-off Date, including all scheduled payments of principal and interest due on
or be fore the Cut-off Date and collected after the Cut-off Date, shall belong
to the Originator.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Originator have agreed upon which of the mortgage loans owned by the Originator
are to be purchased by the Purchaser pursuant to this Agreement, and the
Originator shall prepare or cause to be prepared on or prior to the Closing Date
a final schedule (the "Closing Schedule") describing such Mortgage Loans and
setting forth all of the Mortgage Loans to be purchased under this Agreement,
including the related Prepayment Charges. The Closing Schedule shall conform to
the requirements set forth in this Agreement and to the definition of "Mortgage
Loan Schedule" under the Pooling and

<PAGE>

                                       -2-

Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                           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 Originator in immediately available funds an amount
(the "Purchase Price") equal to the net sale proceeds of the Class A
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates and (ii) deliver to Ameriquest Securities L.L.C., upon
the order of the Originator, the Class CE Certificates, the Class P
Certificates, the Class R-I Certificates, the Class R-II Certificates and the
Class R-III Certificates (the "Ameriquest L.L.C. Certificates").

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Originator does
hereby sell and contribute, 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, including the
related Prepayment Charges collected after the Cut-off Date. 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 Originator for the benefit of the Purchaser or any
assignee, transferee or designee of the Purchaser. Upon the sale and
contribution 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
Originator 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. The
Originator will, on or prior to the Closing Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of Norwest Bank Minnesota, National
         Association, as Trustee under the applicable agreement, without
         recourse," with all prior and intervening endorsements showing a
         complete chain of endorsement from the originator to the Person so
         endorsing to the Trustee;

                  (ii) the original Mortgage with evidence of recording thereon,
         and a copy, certified by the appropriate recording office, of the
         recorded power of attorney, if the Mortgage was executed pursuant to a
         power of attorney, with evidence of recording thereon;

                  (iii) an original Assignment of the Mortgage in blank;

<PAGE>

                                       -3-

                  (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);

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lender's title insurance policy or an
         attorney's opinion of title or similar, guarantee of title acceptable
         to mortgage lenders generally in the jurisdiction where the Mortgaged
         Property is located, 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.

                  The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon mutual agreement between
the Originator and the Trustee, following the later of (i) the Closing Date,
(ii) the date on which the Originator receives the Assignment from the Custodian
and (iii) the date of receipt by the Originator of the recording information for
a Mortgage) submit or cause to be submitted for recording, at no expense to the
Trust Fund or the Trustee, in the appropriate public office for real property
records, each Assignment referred to in (iii) and (iv) above and shall execute
each original Assignment referred to in (iii) in the following form: "Norwest
Bank Minnesota, National Association, as Trustee under the applicable
agreement". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Originator shall promptly prepare or cause to
be prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be submitted for recording with respect to any
Mortgage Loan if the Trustee and each Rating Agency has received an opinion of
counsel, satisfactory in form and substance to each Rating Agency, to the effect
that the recordation of such Assignments in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note;
provided further, however, notwithstanding the delivery of any opinion of
counsel, each assignment of Mortgage shall be submitted for recording by the
Originator in the manner described above, at no expense to the Trust Fund or the
Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) failure of the
Master Servicer Termination Test, (iii) the occurrence of the bankruptcy or
insolvency of the Originator, (iv) the occurrence of a servicing transfer as
described in Section 7.02 of the Pooling and Servicing Agreement , (v) if the
Originator is not the Master Servicer and with respect to any one Assignment of
Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to
the Mortgagor under the related Mortgage and (vi) any Mortgage Loan that is 90
days or more delinquent. Notwithstanding the foregoing, if the Originator is
unable to pay the cost of recording the Assignments of Mortgage, such expense
will be paid by the Trustee.

<PAGE>

                                       -4-

                  Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Originator hereunder shall be deemed to have been satisfied upon (1) delivery by
or on behalf of the Originator promptly upon receipt thereof to the Purchaser or
any assignee, transferee or designee of the Purchaser of either the original or
a copy of such document certified by the Originator in the case of (x) above or
the public recording office in the case of (y) above to be a true and complete
copy of the recorded original thereof and (2) if such delivered copy is
certified by the Originator then in addition thereto delivery promptly upon
receipt thereof of either the original or a copy of such document certified by
the public recording office to be a true and complete copy of the original.

                  In the event that the original lender's title insurance policy
has not yet been issued, the Originator shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. Promptly upon receipt by the Originator of any such original
title insurance policy the Originator shall deliver such to the Purchaser or any
assignee, transferee or designee of the Purchaser.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Originator, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (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 SUBSEQUENT MORTGAGE LOANS. In
connection with the transactions contemplated by Section 2.11 of the Pooling and
Servicing Agreement, the Originator hereby agrees that the Purchaser shall be
under no obligation to purchase any Subsequent Mortgage Loans unless (i) the
conditions precedent and the representations and warranties contained in Section
2.11 of the Pooling and Servicing Agreement and the Subsequent Transfer
Instrument, substantially in the form of Exhibit 4, are satisfied and (ii) each
Subsequent Mortgage Loan satisfies the representations and warranties contained
in Section 6 of this Agreement. The sale of Subsequent Mortgage Loans by the
Originator to the Purchaser shall be effected in accordance with the terms of
Section 2.11 of the Pooling and Servicing Agreement pursuant to a Subsequent
Mortgage Loan Purchase Agreement substantially in the form of this Agreement.

<PAGE>

                                       -5-

                           (e) 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 Originator, 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 or the Trustee in
connection with enforcing any obligations of the Originator under this Agreement
will be promptly reimbursed by the Originator.

                           (f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Originator 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 at the Custodian's offices in Houston, Texas. Such
examination may be made by the Purchaser or the Trustee, and their respective
designees, upon reasonable notice to the Originator (or the Custodian) 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 Originator, 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.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             ORIGINATOR.

                  The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:

                           (i) The Originator is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Originator 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 the Pooling and Servicing Agreement;

                           (ii) The Originator had the full corporate power and
authority to originate, hold and sell each Mortgage Loan and 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 Originator the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser, constitutes a
legal, valid and binding obligation of the Originator, enforceable against the
Originator

<PAGE>

                                       -6-

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 Originator, the servicing of the Mortgage Loans by the Originator under the
Pooling and Servicing Agreement, 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 Originator and will
not (A) result in a breach of any term or provision of the charter or by-laws of
the Originator 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 Originator is a party or by which it may be
bound, or any statute, order or regulation applicable to the Originator of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Originator; and the Originator 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 Originator's
knowledge, would in the future materially and adversely affect, (x) the ability
of the Originator to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Originator taken as a whole;

                           (iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Originator has
obtained the same;

                           (v) The Originator is an approved Originator/servicer
for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and

                           (vi) Except as otherwise disclosed in the Prospectus
Supplement, no litigation is pending against the Originator that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Originator to service the Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the terms
hereof.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
                             RELATING TO THE MORTGAGE LOANS.

         The Originator hereby represents and warrants to the Purchaser that as
of the Closing Date:

<PAGE>

                                       -7-

                  (i) The information set forth on the related Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;

                  (ii) [Reserved];

                  (iii) No material 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;

                  (iv) All payments due prior to the Cut-off Date have been made
and none of the Mortgage Loans will have been contractually delinquent for more
than one calendar month more than once since the origination thereof;

                  (v) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of nondelinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, 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 such Mortgage;

                  (vi) Immediately prior to the assignment of the Mortgage Loans
to the Purchaser, the Originator had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;

                  (vii) There is no delinquent tax or assessment lien against
any Mortgaged Property;

                  (viii) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note, 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 valid right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such valid right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;

                  (ix) There are no mechanics' liens or claims for work, labor
or material rendered to the Mortgaged Property affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of the related
Mortgage, except those which are insured against by the title insurance policy
referred to in (xiii) below;

<PAGE>

                                       -8-

                  (x) Subject to the Escrow Withhold referred to in (xx) below,
each Mortgaged Property is free of material damage and is in good repair;

                  (xi) Each Mortgage Loan at origination complied in all
material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;

                  (xii) Neither the Originator nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;

                  (xiii) A lender's policy of title insurance together with a
condominium endorsement, extended coverage endorsement, and an adjustable rate
mortgage endorsement (each as applicable) in an amount at least equal to the
Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Fannie Mae or Freddie Mac, which
policy insures the Originator and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien of the Mortgage; no claims
have been made under such lender's title insurance policy and no prior holder of
the related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

                  (xiv) Each Mortgage Loan was originated by the Originator (or,
if generated on behalf of the Originator by a person other than the Originator,
is subject to the same underwriting standards and procedures used by the
Originator in originating mortgage loans directly) or by a savings and loan
association, savings bank, commercial bank, credit union, insurance company or
similar institution which is supervised and examined by a federal or state
authority (including a mortgage broker), or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act;

                  (xv) On each adjustment date, the Mortgage Rate will be
adjusted to equal the Index plus the Gross Margin, rounded to the nearest
0.125%, subject to the Periodic Rate Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate. The related Mortgage Note is payable on the first day of
each month in self-amortizing monthly installments of principal and interest,
with interest payable in arrears, and requires a monthly payment which is
sufficient to fully amortize the outstanding principal balance of the Mortgage
Loan over its remaining term and to pay interest at the applicable Mortgage
Rate. No Mortgage Loan is subject to negative amortization;

<PAGE>

                                       -9-

                  (xvi) All of the improvements which were included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged Property,
except those, if any, which are insured against by the lender's title insurance
policy referred to in (xiii) above.

                  (xvii) All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities and the Mortgaged Property is
lawfully occupied under applicable law except as may otherwise be insured
against by the lender's title insurance policy referred to in (xiii) above.

                  (xviii) All parties which have had any interest in the
Mortgage, 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 licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

                  (xvix) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with applicable laws. All parties
to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties;

                  (xx) The proceeds of each Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with, excepting
therefrom any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold
as defined in the Originator's underwriting guidelines. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were paid;

                  (xxi) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                  (xxii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such 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;

<PAGE>

                                      -10-

                  (xxiii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Originator have been capitalized under the
Mortgage or the related Mortgage Note;

                  (xxiv) The origination, collection and servicing practices
used by the Originator with respect to each Mortgage Loan have been in all
material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

                  (xxv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;

                  (xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;

                  (xxvii) No Mortgage Loan provides for primary mortgage
insurance;

                  (xxviii) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxix) below contain
a standard mortgagee clause naming the Originator or the original mortgagee, and
its successors in interest, as mortgagee, and the Originator has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

                  (xxix) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;

                  (xxx) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note; and the
Originator has not waived any default, breach, violation or event of
acceleration;

<PAGE>

                                      -11-

                  (xxxi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which does not include (a) cooperatives or (b)
mobile homes and manufactured homes (as defined in the Fannie Mae
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured home was built under the Federal Manufactured Home
Construction and Safety Standards of 1976 or (ii) otherwise assumes the
characteristics of site-built housing and meets local building codes, is readily
marketable, has been permanently affixed to the site, is not in a mobile home
"park," and is treated as real property under the applicable state law. With
respect to any Mortgage Loan that is secured by a leasehold estate, (a) the
lease is valid, in full force and effect; (b) all rents and other payments due
under the lease have been paid; (c) the lessee is not in default under any
provision of the lease; (d) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five years and (e) the Mortgagee under the
Mortgage Loan is given notice and an opportunity to cure any defaults under the
lease;

                  (xxxii) There is no obligation on the part of the Originator
or any other party under the terms of the Mortgage or related Mortgage Note to
make payments in lieu of or in addition to those made by the Mortgagor;

                  (xxxiii) Any future advances made prior to the related
Purchase 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 reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

                  (xxxiv) Each Mortgage Loan was underwritten in accordance with
the Originator's underwriting guidelines;

                  (xxxv) The Mortgage File contains an appraisal which was
performed by an appraiser who satisfied, and which was conducted in accordance
with, all of the applicable requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended;

                  (xxxvi) None of the Mortgage Loans is a graduated payment
mortgage loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;

                  (xxxvii) With respect to each Mortgage Loan, no loan junior in
lien priority to such Mortgage Loan and secured by the related Mortgaged
Property was originated by the Originator at the time of origination of such
Mortgage Loan;

                  (xxxviii) The Mortgage Loans comply in all material respects
with the description set forth under the heading "The Mortgage Pool" in the
Depositor's Prospectus Supplement, dated June 21, 2000 (the "Prospectus
Supplement");

                  (xxxix) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged

<PAGE>

                                      -12-

Property is sold or transferred without the prior written consent of the
mortgagee thereunder, except as may be limited by applicable law;

                  (xl) The information set forth in the Mortgage Loan Schedule
relating to the existence of a Prepayment Charge is complete, true and correct
in all material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms upon the full and voluntary prepayment by the
Mortgagor under applicable law (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary payoff; and

                  (xli) Each Mortgage Loan is an obligation that is principally
secured by real property for purposes of the REMIC Provisions of the Code.
 .

                  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 materially 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 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 the Certificateholders.

                  Upon discovery by the Originator, 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 Originator
(as listed on the Trustee's Preliminary Exception Report), 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 or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, the party discovering the breach
shall give prompt written notice to the other. 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 such breach of a representation and warranty the Originator
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Originator cannot deliver such
missing document or such defect or breach cannot be cured, the Originator shall,
within 90 days of its discovery or receipt of notice, either (i) repurchase the
affected Mortgage Loan at a price equal to the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) 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. In the event that any Mortgage Loan is subject to a
breach of the representation and warranty in Section 6(xl) resulting in the
Master Servicer's inability to collect all or part of the Prepayment Charge from
the Mortgagor, in lieu of repurchase, the Originator shall be obligated to remit
to the

<PAGE>

                                      -13-

Master Servicer (for deposit in the Collection Account) any shortfall in the
Prepayment Charge collected upon the Mortgagor's voluntary and full principal
prepayment.

         The Originator 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 Originator 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.

         In addition, upon discovery by the Originator, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering the breach shall give prompt written notice
within five Business Days to the others. Within ninety (90) days of its
discovery or its receipt of notice, the Originator promptly shall either (i)
repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) 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.

                  (b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, remit a Prepayment Charge
shortfall, repurchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Purchaser against the Originator respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 5 or Section 6. It is understood and agreed that the obligations of
the Originator set forth in this Section 7 to cure, repurchase or substitute for
a Mortgage Loan as to which a material document is missing constitute the sole
remedies of the Purchaser against the Originator respecting a missing document.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Originator under this Agreement shall be true and
                           correct in all material respects as of the date as of
                           which they are made and no event shall have occurred
                           which, with notice or the passage of time, would
                           constitute a default under this Agreement;

<PAGE>

                                      -14-

                  (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 Originator 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 pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; 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 Originator on the Closing Date, against
delivery and release by the Originator 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
Originator of the Purchase Price in immediately available funds.

                  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 Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in
                                    the form of Exhibit 1 hereto, and attached
                                    thereto copies of the certificate of
                                    incorporation, by-laws and certificate of
                                    good standing of the Originator under the
                                    laws of Delaware and (ii) if the Class CE
                                    Certificates and Class P Certificates are
                                    offered on the Closing Date pursuant to a
                                    Private Placement Memorandum, the Originator
                                    shall deliver an Officer's Certificate
                                    stating that the same information contained
                                    in such Private Placement Memorandum is true
                                    and accurate in all material respects;

                           (b)      An Officers' Certificate of the Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in
                                    the form of Exhibit 2 hereto, with respect
                                    to certain facts regarding the sale of the
                                    Mortgage Loans by the Originator to the
                                    Purchaser;

                           (c)      An Opinion of Counsel of the Originator,
                                    dated the Closing Date and addressed to the
                                    Purchaser and the Underwriter, substantially
                                    in the form attached hereto as Exhibit 3;

<PAGE>

                                      -15-

                           (d)      Such opinions of counsel from the
                                    Purchaser's or Originator's counsel as the
                                    Rating Agencies may request in connection
                                    with the sale of the Mortgage Loans by the
                                    Originator to the Purchaser or the
                                    Originator's execution and delivery of, or
                                    performance under, this Agreement and upon
                                    which the Underwriter may rely;

                            (e)     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
                                    Prospectus Supplement, under the captions
                                    "Summary of Prospectus Supplement", "Risk
                                    Factors", "The Mortgage Pool", "Yield on the
                                    Certificates", "Description of the
                                    Certificates", and "Pooling and Servicing
                                    Agreement--The Originator and Master
                                    Servicer", agrees with the records of the
                                    Originator;

                            (f)     The Originator shall deliver for inclusion
                                    in the Prospectus Supplement under the
                                    captions "The Mortgage Pool--Underwriting
                                    Standards; Representations" and "Pooling and
                                    Servicing Agreement--The Originator and
                                    Master Servicer", or for inclusion in other
                                    offering material such publicly available
                                    information regarding its financial
                                    condition and its mortgage loan delinquency,
                                    foreclosure and loss experience,
                                    underwriting standards, lending activities
                                    and loan sales, production, and servicing
                                    and collection practices, and any similar
                                    nonpublic, unaudited financial information;
                                    and

                           (g)      Such further information, certificates,
                                    opinions and documents as the Purchaser or
                                    the Underwriter may reasonably request.

                  SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, prospectus
supplement, and private placement memorandum relating to the Certificates and
other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Originator's

<PAGE>

                                      -16-

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 cost of
outside special counsel that may be required for the Purchaser, the cost of
obtaining the documents referred to in Section 9(g) and the fees charged by any
rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Mortgage Loans are being serviced by the Originator in
accordance with the terms and provisions set forth in the Aggregation Facility,
as memorialized in the Letter Agreement dated April 26, 2000 (the "Aggregation
Facility") between Salomon Brothers Realty Corp. and the Originator, and it is
understood and agreed by and between the Originator and the Purchaser that the
interim servicing arrangements under the Aggregation Facility with the
Originator will be superseded by the servicing arrangements set forth in the
Pooling and Servicing Agreement.

                  SECTION 12. [RESERVED]

                  SECTION 13. 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 Originator's failure
to deliver the Mortgage Loans on or before the Closing Date. The Originator
hereby grants to the Purchaser a lien on and a continuing security interest in
the Originator's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Originator
of its obligation hereunder, and the Originator 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 Originator agrees that,
upon acceptance of the Mortgage Loans by the Purchaser or its designee and
delivery of payment to the Originator, 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 cu mulative 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, 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, 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.

<PAGE>

                                      -17-

                  SECTION 14. 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 1100 Town & Country Road, Suite
1100, Orange, California 92868, Attention: General Counsel, or such other
address as may hereafter be furnished to the Originator in writing by the
Purchaser; if to the Originator, addressed to the Originator at 1100 Town &
Country Road, Suite 1100, Orange, California 92868, Attention: General Counsel,
or to such other address as the Originator may designate in writing to the
Purchaser.

                  SECTION 15. 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 16. AGREEMENT OF PARTIES. The Originator and the
Purchaser 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 17. SURVIVAL. The Originator 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 Originator 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 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

<PAGE>

                                      -18-

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 Originator to the Purchaser as provided
in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Originator to the Purchaser and not as a pledge of the Mortgage Loans by the
Originator to the Purchaser to secure a debt or other obligation of the
Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Originator, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originator to the
Purchaser to secure a debt or other obligation of the Originator 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
Originator to the Purchaser of a security interest in all of the Originator's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accor dance 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 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 Originator 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>

                                      -19-

                  IN WITNESS WHEREOF, the Originator and the Purchaser have
caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                            AMERIQUEST MORTGAGE COMPANY

                                            By:____________________________
                                            Name:
                                            Title:

                                            AMERIQUEST MORTGAGE SECURITIES INC.

                                            By:____________________________
                                            Name:
                                            Title:

<PAGE>

                                                                       EXHIBIT 1

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

                  I, ______________ hereby certify that I am the duly appointed
_______________ of Ameriquest Mortgage Company, a Delaware corporation (the
"Originator"), and further certify, on behalf of the Originator, as follows:

                  1. Attached hereto as Exhibit A is a true and correct copy of
         the Certificate of Incorporation and By-laws of the Originator, both of
         which are in full force and effect on the date hereof. There has been
         no amendment or other document filed affecting the Certificate of
         Incorporation of the Originator since April 29, 1997, and no such
         amendment has been authorized. There has been no amendment or other
         document filed affecting the By-laws of the Originator since September
         14, 1994, and no such amendment has been authorized. Attached hereto as
         Exhibit B is a certificate of good standing, dated June __, 2000 issued
         by the State of Delaware with respect to the Originator. No event has
         occurred since the date thereof that has affected the good standing of
         the Originator under the laws of the State of Delaware.

                  2. There are no actions, suits or proceedings pending or, to
         the best of my knowledge, threatened against or affecting the
         Originator that, if adversely determined, individually or in the
         aggregate, would adversely affect the Originator's ability to perform
         its obligations under (i) the Mortgage Loan Purchase Agreement, dated
         June 21, 2000 (the "Purchase Agreement") between the Originator and
         Ameriquest Mortgage Securities Inc. (the "Depositor"), (ii) the Pooling
         and Servicing Agreement, dated as of June 1, 2000 (the "Pooling and
         Servicing Agreement"), among the Depositor as depositor, the Originator
         as master servicer (in such capacity, the "Master Servicer") and
         Norwest Bank Minnesota, National Association as Trustee or (iii) the
         Underwriting Agreement, dated June 21, 2000 (the "Underwriting
         Agreement"), among the Depositor, Ameriquest and Salomon Smith Barney
         Inc. (the "Underwriter"). No proceedings looking toward merger,
         consolidation or liquidation, dissolution or bankruptcy of the
         Originator are pending or contemplated.

                  3. Each person who, as an officer or representative of the
         Originator or the Master Servicer, signed the Purchase Agreement, the
         Pooling and Servicing Agreement or the Underwriting Agreement and any
         other document delivered prior hereto or on the date hereof in
         connection with the purchase described in the Purchase Agreement, or
         the transactions described in the Pooling and Servicing Agreement was,
         at the respective times of such signing and delivery, and is now, duly
         elected or appointed, qualified and acting as such officer or
         representative, and the signatures of such persons appearing on such
         documents are their genuine signatures.

                  4. Each of the Mortgage Loans referred to in the Purchase
         Agreement and the Pooling and Servicing Agreement was originated in
         accordance with Section 6(xiv) of the Purchase Agreement.

<PAGE>

                                       -2-

                  5. All of the representations and warranties of the Originator
         under the Purchase Agreement, and of the Master Servicer under the
         Pooling and Servicing Agreement are true and correct in all material
         respects as of the Closing Date (subject, in the case of the Closing
         Schedule delivered pursuant to the Purchase Agreement, to such
         amendments thereto as were duly made on or before the date hereof) and
         no event has occurred which, with notice or the passage of time or
         both, would constitute a default under the Purchase Agreement, or an
         Event of Default under the Pooling and Servicing Agreement.

                  6. The information set forth in the Mortgage Loan Schedule
         attached as an exhibit to the Purchase Agreement and to the Pooling and
         Servicing Agreement is true and correct in all material respects.

                   7. The information regarding the Originator, its financial
         condition and its mortgage loan delinquency, foreclosure and loss
         experience, underwriting standards, lending activities and loan sales,
         production and servicing and collection practices, as is set forth
         herein is accurate in all material respects.

                  8. The information contained in the Prospectus Supplement,
         dated June 21, 2000 relating to the Mortgage Loans, the Originator, and
         its loan portfolio, is true and accurate in all material respects and
         does not contain any untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading.

                  9. With respect to its sale of the Mortgage Loans and the
         related transactions and undertakings contemplated by the Purchase
         Agreement, the Originator has complied with all the obligations by
         which it is bound and has satisfied all the conditions on its part to
         be performed or satisfied prior to the Closing Date.

                  10. Capitalized terms used but not defined herein shall have
         the meanings assigned in the Purchase Agreement.

<PAGE>

                  IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Originator.

Dated:   June __, 2000

                                                     By:________________________
                                                     Name:
                                                     Title:

                  I, _______________, an ___________________ of Ameriquest
Mortgage Company hereby certify that _______________ is the duly appointed,
qualified and acting ______________ of the Originator and that the signature
appearing above is her genuine signature.

                  IN WITNESS WHEREOF, I have hereunto signed my name.

Dated:   June __,  2000

                                                     By:________________________
                                                     Name:
                                                     Title:

<PAGE>

                                                                       EXHIBIT 2

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

                       Ameriquest Mortgage Securities Inc.
                Floating Rate Mortgage Pass-Through Certificates
                                  Series 2000-2

                                 CERTIFICATE OF
                           AMERIQUEST MORTGAGE COMPANY

                  Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Ameriquest Mortgage Company ("Ameriquest") to Ameriquest Mortgage
Securities Inc. (the "Depositor") pursuant to a Mortgage Loan Purchase
Agreement, dated June 21, 2000 (the "Purchase Agreement") between Ameriquest and
the Depositor and the simultaneous issuance of Floating Rate Mortgage
Pass-Through Certificates, Series 2000-2, Class A, Class M-1, Class M-2, Class
M-3, Class CE, Class P, Class R-I, Class R-II and Class R-III (the
"Certificates"), pursuant to a Pooling and Servicing Agreement, dated as of June
1, 2000 (the "Pooling and Servicing Agreement") among the Depositor as
depositor, Ameriquest as master servicer (in such capacity, the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee (the
"Trustee"). In consideration for its purchase of the Mortgage Loans, the
Depositor will deliver to Ameriquest the Class CE, Class P, Class R-I, Class
R-II and Class R-III Certificates. The Depositor will sell the Class A, Class
M-1, Class M-2 and Class M-3 Certificates to Salomon Smith Barney Inc. (the
"Underwriter") for offer and sale pursuant to the terms of an Underwriting
Agreement, dated June 21, 2000 (the "Underwriting Agreement"), among the
Depositor, Ameriquest and the Underwriter. The Purchase Agreement, the Pooling
and Servicing Agreement and the Underwriting Agreement together, are hereinafter
collectively referred to as the "Agreements". Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Agreements.

                  The undersigned is a duly appointed ______________ of
Ameriquest and hereby certifies after reasonable investigation that:

         1. The transfer of the Mortgage Loans by the undersigned pursuant to
the Agreements was intended to be a sale and to be reported as such under
generally accepted accounting principles ("GAAP") and for federal income tax
purposes.

         2. In connection with the sale of the Mortgage Loans by the undersigned
pursuant to the Agreements, the undersigned (i) was solvent at all relevant
times prior thereto and was not rendered insolvent thereby, (ii) after giving
effect thereto, is able to pay its debts as they mature, (iii) was not left with
unreasonably small capital for the business in which engaged and proposed to be
engaged, (iv) had and has no intention of commencing any bankruptcy, insolvency
or similar proceeding, (v) did not and does not have any intent to hinder, delay
or defraud any of the undersigned's creditors, (vi) had a valid business reason
therefor and (vii) received new value and consideration constituting reasonably
equivalent value and fair consideration.

<PAGE>

                                       -2-

         3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Mortgage Loan or Certificate, except as
described in the Agreements.

         4. The factual assumptions in the Opinion Letter are accurate,
including without limitation the assumption that the Retained Certificates would
be carried on its balance sheet at a value which in its determination is equal
to an amount that is less than 10% of the Mortgage Loan Purchase Price as
defined in the Opinion Letter.

         The undersigned has executed this Certificate as of June __, 2000.

                                                  AMERIQUEST MORTGAGE COMPANY

                                                  By:___________________________
                                                  Name:
                                                  Title:

<PAGE>

                                                                       EXHIBIT 3

                 [FORM OF OPINION OF COUNSEL TO THE ORIGINATOR]

TO:  Addressees on Schedule A

                                                         June __, 2000

                  Re:      Ameriquest Mortgage Securities Inc.
                           Floating Rate Mortgage Pass-Through Certificates
                           Series 2000-2
                           ------------------------------------------------

Ladies and Gentlemen:

         I am Senior Counsel of Ameriquest Mortgage Company (the "Company") and
have acted as counsel to the Company in connection with the servicing by the
Company of certain residential first mortgage loans (the "Mortgage Loans")
pursuant to the Pooling and Servicing Agreement, dated as of June 1, 2000 (the
"Pooling and Servicing Agreement"), among Ameriquest Mortgage Securities Inc. as
depositor (the "Depositor"), the Company and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"), relating to the issuance and sale by the
Depositor of Floating Rate Mortgage Pass-Through Certificates, Series 2000-2,
designated as the Class A, Class M-1, Class M-2, Class M-3, Class CE, Class P,
Class R-I, Class R-II and Class R-III (collectively, the "Certificates"). In
connection with the sale and servicing of the Mortgage Loans, the Company has
entered into the Custodial Agreement, dated as of June 23, 2000, among the
Trustee, the Company, the Depositor and Chase Bank of Texas, National
Association as custodian (the "Custodial Agreement"), the Mortgage Loan Purchase
Agreement, dated June 21, 2000, between the Company and the Depositor (the
"Purchase Agreement") and the Underwriting Agreement dated June 21, 2000 between
the Company, the Depositor and Salomon Smith Barney Inc. as the underwriter (the
"Underwriting Agreement"). The Purchase Agreement, the Custodial Agreement, the
Pooling and Servicing Agreement and the Underwriting Agreement are collectively
referred to herein as the "Agreements". Capitalized terms not defined herein
have the meanings set forth in the Agreements.

         As such counsel, I have examined original or reproduced or certified
copies of the certificate of incorporation and bylaws of the Company, as amended
to date, records of actions taken by the Board of Directors of the Company and
copies of the Agreements, the Prospectus Supplement, dated June 21, 2000 (the
"Prospectus Supplement"), to the Prospectus, dated January 24, 2000, relating to
the Class A, Class M-1, Class M-2 and Class M-3 Certificates. I have also
examined such other documents, papers, statutes and authorities as I deem
necessary as a basis for the opinions hereinafter set forth. In all such
examinations made by me in connection with this opinion, I have assumed the
genuineness of all signatures and the completeness and authenticity of all
records and all documents submitted to me as copies thereof. As to various
matters of fact relevant to the opinions hereinafter expressed, I have relied
upon the representations and warranties contained in the Agreements and
statements and certificates of officers and representatives of the Company. As
to matters in Paragraph 5 below with respect to which I opine based on my
knowledge, I have relied solely upon

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
June __, 2000                                                            Page 2.

inquiries made to and responses received from officers and representatives of
the Company and the documents furnished to me by representatives of the Company,
which documents such representatives have informed me include the only material
indentures, agreements and instruments to which the Company is a party or by
which it or any of its properties or assets are bound.

         In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.

         In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.

         I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of California.

         Based upon and subject to the foregoing, I am of the opinion that:

         1. The Company is duly authorized and qualified to transact any and all
business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Mortgage Loan 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 the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of the Pooling and Servicing
Agreement.

         2. The Company has the power to engage in the transactions contemplated
by each and all of the Agreements and has all requisite power, authority and
legal right to execute and deliver the Agreements and any other documents
delivered in connection therewith and to perform and observe the terms and
conditions of such instruments.

         3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
June __, 2000                                                            Page 3.

generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.

         4. No consent, approval, authorization, license, permit or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of, or compliance by the Company with, any or all of
the Agreements or the consummation of the transactions contemplated by the
Agreements.

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

         6. Except as disclosed in the Prospectus Supplement dated June 21,
2000, to the best of my knowledge, no litigation is pending against the Company
that would materially and adversely affect the execution, delivery or
enforceability of the Agreements or the ability of the Company to service the
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms thereof.

         7. Based upon my participation, nothing has come to my attention that
has caused me to believe that the information contained in the Prospectus
Supplement, dated June 21, 2000 relating to the Mortgage Loans, the Company, and
its loan portfolio, and with respect to any private placement memorandum or
other offering document, any information of a comparable nature,(i) is not true
and accurate, (2) contains any untrue statement of a material fact or (3) omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

<PAGE>

         This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.

                                             Respectfully submitted,

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

<PAGE>

                                                                       EXHIBIT 4

                     Form of Subsequent Transfer Instrument

                  Pursuant to this Subsequent Transfer Instrument, dated
__________, 2000 (the "Instrument"), between Ameriquest Mortgage Securities Inc.
as seller (the "Depositor") and Norwest Bank Minnesota, National Association as
trustee (the "Trustee") of the Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2000-2, and pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2000 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Ameriquest Mortgage
Company as master servicer and the Trustee as trustee, the Depositor and the
Trustee agree to the sale by the Depositor and the purchase by the Trustee on
behalf of the Trust Fund, of the Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").

                  Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

                  (a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as originator and seller, to the extent of
the Subsequent Mortgage Loans, a copy of which agreement is annexed hereto as
Attachment G.

                  (c) Additional terms of the sale are set forth on Attachment A
hereto.

<PAGE>

                  Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
                             PRECEDENT.

                  (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                  (b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.

                  Section 3. RECORDATION OF INSTRUMENT.

                  To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

                  Section 4. GOVERNING LAW.

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5. COUNTERPARTS.

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

<PAGE>

                  Section 6. SUCCESSORS AND ASSIGNS.

                  This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.

                                        AMERIQUEST MORTGAGE SECURITIES INC.

                                        By:________________________________
                                        Name:
                                        Title:

                                        NORWEST BANK MINNESOTA, NATIONAL
                                        ASSOCIATION, as trustee

                                        By:________________________________
                                        Name:
                                        Title:

Attachments
-----------

A.       Additional terms of sale.
B.       Schedule of Subsequent Mortgage Loans.
C.       Depositor's Officer's certificate.
D.       Opinions of Depositor's counsel (bankruptcy, corporate).
E.       Trustee's Certificate.
F.       Opinion of Trustee's Counsel.
G.       Subsequent Mortgage Loan Purchase Agreement.

<PAGE>

                                  ATTACHMENT A
                                  ------------

                            ADDITIONAL TERMS OF SALE

         A.       General

                  1.       Subsequent Cut-off Date: __________, 2000
                  2.       Subsequent Transfer Date: __________, 2000
                  3.       Aggregate Principal Balance of the Subsequent
                           Mortgage Loans as of the Subsequent Cut-off Date:
                           $______________
                  4.       Purchase Price:  100.00%

         B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date; provided, however that
approximately 100% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, may have a first payment date
occurring on or after the Subsequent Cut-off Date and, therefore, such
Subsequent Mortgage Loans could not have been delinquent as of the related
Subsequent Cut-off Date; (ii) the term to stated maturity of the Subsequent
Mortgage Loan will not be less than 180 months and will not exceed 360 months
from its first payment date; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 90%; (v) the Subsequent Mortgage Loans will
have, as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 15 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 8.000% or greater than 15.750%; (vii) the
Subsequent Mortgage Loan shall have been serviced by the Master Servicer since
origination or purchased by the Originator in accordance with its underwriting
guidelines; (viii) the Subsequent Mortgage Loan must have a first payment date
occurring on or before August 1, 2000 and (ix) the Subsequent Mortgage Loan
shall have been be underwritten in accordance with the criteria set forth under
the section "The Mortgage Pool--Underwriting Standards; Representations" in the
Prospectus Supplement.

         C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than 10.331% and not more than 10.650%; (iii) have a weighted
average Loan-to-Value Ratio of not more than 74.85%; (iv) have no Mortgage Loan
with a principal balance in excess of $690,000 and (v) have a weighted average
Gross Margin of not less than [6.590]%, in each case, as applicable, by
aggregate principal balance of the Mortgage Loans as of the related Subsequent
Cut-off Date.

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

<PAGE>

                                   EXHIBIT E-1
                                   -----------

                               REQUEST FOR RELEASE
                             (for Trustee/Custodian)

Loan Information
----------------

         Name of Mortgagor:   ___________________________________

         Master Servicer
         Loan No.:            ___________________________________

Trustee/Custodian
-----------------

         Name:                ___________________________________

         Address:                  ____________________________________
                                   ____________________________________

         Trustee/Custodian
         Mortgage File No.:        ____________________________________

Depositor
---------

         Name:             AMERIQUEST MORTGAGE SECURITIES INC.

         Address:                  ____________________________________
                                   ____________________________________

         Certificates:             Floating Rate Mortgage Pass-Through
                                   Certificates, Series 2000-2.

<PAGE>

                  The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Floating Rate Mortgage Pass-Through Certificates, Series 2000-2, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement, dated as of June 1, 2000, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").

( )      Promissory Note dated _______________, 19__, in the original principal
         sum of $__________, made by _____________________, payable to, or
         endorsed to the order of, the Trustee.

( )      Mortgage recorded on _________________________ as instrument no.
         ____________________ in the County Recorder's Office of the County of
         _________________, State of __________________ in book/reel/docket
         _________________ of official records at page/image _____________.

( )      Deed of Trust recorded on ___________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         _________________, State of ____________________ in book/reel/docket
         _________________ of official records at page/image ______________.

( )      Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         ___________________ as instrument no. _________ in the County
         Recorder's Office of the County of _______________, State of
         _______________________ in book/reel/docket ____________ of official
         records at page/image ____________.

( )      Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

                  The undersigned Master Servicer hereby acknowledges and agrees
as follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trustee, solely for the
         purposes provided in the Agreement.

                  (2) The Master Servicer shall not cause or permit the
         Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

<PAGE>

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Collection Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trustee, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

Dated:

                                                     [MASTER SERVICER]

                                                     By:________________________
                                                     Name:
                                                     Title:

<PAGE>

                                   EXHIBIT E-2
                                   -----------

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICERS' CERTIFICATE AND TRUST RECEIPT
                FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 2000-2

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:__________________              BORROWER'S NAME:____________________

COUNTY:_______________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

______________________________              DATED:__________________________

/  /   VICE PRESIDENT

/  /   ASSISTANT VICE PRESIDENT

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                            [Date]

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479

          Re:  Ameriquest Mortgage Securities Inc., Floating Rate
               Mortgage Pass-Through Certificates, Series 2000-2,
               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 June 1, 2000, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Norwest 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]

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479

           Re: Ameriquest Mortgage Securities Inc., Floating Rate
               Mortgage Pass-Through Certificates, Series 2000-2,
               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 June 1, 2000, among Ameriquest Mortgage Securities Inc.
as Depositor, Ameriquest Mortgage Company as Master Servicer and Norwest 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 Norwest 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 Norwest 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 Ameriquest
Mortgage Securities Inc., Floating Rate Mortgage Pass-Through Certificates,
Series 2000-2, [Class R-I] [and Class R-II][Class R-III] (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
____________________, 2000 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 or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

<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
__________, 200__.

                                              [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-I][Class
R-II][Class R-III] (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
___________, 200__.

                                                     [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

                                                _____________, 200__

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Norwest Bank Minnesota,
National Association
11000 Broken Land Parkway
Columbia, Maryland 21044-3562
Attention:  Corporate Trust Administration

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

                Re:  Ameriquest Mortgage Securities Inc.
                     Floating Rate Mortgage Pass-Through Certificates,
                     Series 2000-2, Class [M-1], [M-2], [M-3]
                     -------------------------------------------------

Dear Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2000-2, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of June 1, 2000 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Norwest 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

<PAGE>

         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

         _____ (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 Sections I and
         III PTCE 95-60 have been satisfied 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>

                                    EXHIBIT H
                                    ---------

                           FORM OF CUSTODIAL AGREEMENT

<PAGE>

                                   EXHIBIT I
                                   ---------

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

                  Pursuant to this Subsequent Transfer Instrument, dated
_______, 2000 (the "Instrument"), between Ameriquest Mortgage Securities Inc. as
seller (the "Depositor") and Norwest Bank Minnesota, National Association as
trustee (the "Trustee") of the Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2000-2, and pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2000 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Ameriquest Mortgage
Company as master servicer and the Trustee as trustee, the Depositor and the
Trustee agree to the sale by the Depositor and the purchase by the Trustee on
behalf of the Trust Fund, of the Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").

                  Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  Section 1. Conveyance of Subsequent Mortgage Loans.
                             ---------------------------------------

                  (a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as originator and as seller, to the extent
of the Subsequent Mortgage Loans, a copy of which agreement is annexed hereto as
Attachment G.

                  (c) Additional terms of the sale are set forth on Attachment A
hereto.

<PAGE>

                Section 2. Representations and Warranties; Conditions Precedent.
                           ----------------------------------------------------

                  (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                  (b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.

                  Section 3. Recordation of Instrument.
                             -------------------------

                  To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

                  Section 4. Governing Law.
                             -------------

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5. Counterparts.
                             ------------

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

<PAGE>

                  Section 6. Successors and Assigns.
                             ----------------------

                  This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.

                                   AMERIQUEST  MORTGAGE SECURITIES INC.

                                   By:_________________________________
                                   Name:
                                   Title:

                                   NORWEST BANK MINNESOTA, NATIONAL
                                   ASSOCIATION, as trustee

                                   By:_________________________________
                                   Name:
                                   Title:

Attachments
-----------

A.       Additional terms of sale.
B.       Schedule of Subsequent Mortgage Loans.

<PAGE>

                                  ATTACHMENT A
                                  ------------

                            ADDITIONAL TERMS OF SALE

         A.       General

                  1.  Subsequent Cut-off Date: ________, 2000
                  2.  Subsequent Transfer Date: ______ __, 2000
                  3.  Aggregate Principal Balance of the Subsequent Mortgage
                      Loans as of the Subsequent Cut-off Date: $______________
                  4.  Purchase Price:  100.00%

         B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date (except with respect to
1.00% of the Subsequent Mortgage Loans, by aggregate principal balance as of the
related Subsequent Cut-off Date, which may be 30 or more days delinquent but
less than 60 days delinquent as of the related Subsequent Cut-off Date); (ii)
the stated term to maturity of the Subsequent Mortgage Loan will not be less
than 358 months and will not exceed 360 months; (iii) the Subsequent Mortgage
Loan may not provide for negative amortization; (iv) the Subsequent Mortgage
Loan will not have a Loan-to-Value Ratio greater than 90.00% the Subsequent
Mortgage Loans will have as of the Subsequent Cut-off Date, a weighted average
term since origination not in excess of __ months; (vi) no Subsequent Mortgage
Loan shall have a Mortgage Rate less than 7.50% or greater than 16.00%; (vii)
the Subsequent Mortgage Loan will have been serviced by the Master Servicer
since origination or purchased by the Depositor; (viii) the Subsequent Mortgage
Loan must have a first Monthly Payment due on or before [MONTH/YEAR]; and (ix)
the Subsequent Mortgage Loan will be underwritten in accordance with the
criteria set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.

         C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than _____% and not more than ______%; (iii) have a weighted average
Loan-to-Value Ratio of not more than ______%; (iv) have no Mortgage Loan with a
principal balance in excess of $________ and (v) have a weighted average Gross
Margin of not less than _____%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the Subsequent Cut-off Date.
Notwithstanding the foregoing, any Subsequent Mortgage Loan may be rejected by
any of the Rating Agencies if the inclusion of such Subsequent Mortgage Loan
would adversely affect the ratings on any class of Offered Certificates.

<PAGE>

                                    EXHIBIT J

                             FORM OF ADDITION NOTICE

                                                 ____________, 2000

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479

                  Re: Pooling and Servicing Agreement, dated as of June 1, 2000,
                      among Ameriquest Mortgage Securities Inc., Ameriquest
                      Mortgage Company and Norwest Bank Minnesota,
                      National Association, relating to Ameriquest Mortgage
                      Securities Inc., Floating Rate Mortgage Pass-Through
                      Certificates, Series 2000-2
                      ----------------------------------------------------------

Ladies and Gentlemen:

                  Pursuant to Section 2.11 of the referenced Pooling and
Servicing Agreement, Ameriquest Mortgage Securities Inc. has designated
Subsequent Mortgage Loans to be sold to the Trust Fund on ________, 2000 with an
aggregate principal balance of $_______________. Capitalized terms not otherwise
defined herein have the meaning set forth in the Pooling and Servicing
Agreement.

                  Please acknowledge your receipt of this notice by
countersigning the enclosed copy in the space indicated below and returning it
to the attention of the undersigned.

                                                Very truly yours,

                                                AMERIQUEST MORTGAGE
                                                SECURITIES INC.

                                                By:__________________________
                                                Name:
                                                Title:

Acknowledged and Agreed:

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

By:__________________________
Name:
Title:

<PAGE>

                                   Schedule 1
                                   ----------

                             MORTGAGE LOAN SCHEDULE

                              Provided Upon Request

<PAGE>

                                   Schedule 2
                                   ----------

                           PREPAYMENT CHARGE SCHEDULE

                           TO BE PROVIDED UPON REQUESTExhibit 10.66

                              SUBORDINATED SECURED

               SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

                            Dated as of April 7, 2000

                                  By and Among

                      SAFETY COMPONENTS INTERNATIONAL, INC.

               AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL LIMITED

                                       and

            AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL GMBH & CO. KG

                                 (as Borrowers)

  THE OTHER SUBSIDIARIES OF SAFETY COMPONENTS INTERNATIONAL, INC. NAMED HEREIN

                                 (as Guarantors)

                          KEYBANK NATIONAL ASSOCIATION

                            (as Administrative Agent)

                                       and

                                   FLEET BANK

                                       and

                          KEYBANK NATIONAL ASSOCIATION

                                  (as Lenders)

<PAGE>

     SUBORDINATED SECURED  SUPERPRIORITY  DEBTOR-IN-POSSESSION  CREDIT AGREEMENT
dated as of April 7,  2000 by and  among (1)  SAFETY  COMPONENTS  INTERNATIONAL,
INC., a Delaware corporation ("Safety Components"), AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL  LIMITED, a company organized under the laws of the United Kingdom
("ASCL"),  and  AUTOMOTIVE  SAFETY  COMPONENTS  INTERNATIONAL  GMBH & CO.  KG, a
company organized under the laws of the Federal Republic of Germany ("GmbH"), as
borrowers (the "Borrowers"),  (2) the direct and indirect subsidiaries of Safety
Components  listed on Schedule 1 hereto, as guarantors (the  "Guarantors"),  (3)
KEYBANK NATIONAL  ASSOCIATION  ("KeyBank") and FLEET BANK ("Fleet"),  as lenders
(the "Lenders"),  and (4) KeyBank, as administrative  agent for the Lenders (the
"Administrative Agent").

                               W I T N E S S E T H

     A. The Borrowers, the Guarantors,  the Lenders and the Administrative Agent
are  parties to a Credit  Agreement  dated as of May 21, 1997 (as  amended,  the
"Prepetition  Credit  Agreement")  pursuant to which, as of the date hereof, the
Borrowers and the Guarantors are indebted to the Lenders and the  Administrative
Agent in respect of (i)  outstanding  revolving  credit  loans in the  aggregate
principal amount of $37,900,000, (ii) certain outstanding letters of credit (the
"Prepetition Letters of Credit") and (iii) certain unpaid interest,  fees, costs
and expenses (collectively, the "Prepetition Obligations").

     B. On April 7, 2000 (the "Petition Date"), a voluntary  petition for relief
under Chapter 11 of Title 11 of the United States Code, 11 U.S.C.  ss.ss. 101 et
seq. (the "Bankruptcy  Code") was filed by Safety  Components and its direct and
indirect subsidiaries listed on Schedule 2 hereto (collectively,  the "Debtors")
in the United States Bankruptcy Court for the District of Delaware (the "Court")
(the  "Chapter 11 Cases").  The Debtors are and will  continue to operate  their
respective    businesses   and   manage   their    respective    properties   as
debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.

     C. Bank of America, N.A., as agent (the "Senior Agent"),  certain financial
institutions,  as lenders  (the  "Senior  Lenders"),  the  Debtors  and  certain
non-Debtor  subsidiaries  of Safety  Components,  as borrowers  (the "Senior DIP
Facility  Borrowers") or as guarantors  (the "Senior DIP Facility  Guarantors"),
propose  to  enter  into a  $30,600,000  senior  debtor-in-possession  financing
facility (the "Senior DIP Facility") pursuant to a Senior Secured Super Priority
Debtor-in-Possession  Loan and Security Agreement dated as of April 7, 2000 (the
"Senior DIP Facility Credit  Agreement") and certain other documents referred to
therein  (collectively,  the "Senior DIP  Facility  Documents").  The Senior DIP
Facility  Borrowers intend to utilize the Senior DIP Facility to (i) permanently
and indefeasibly repay $17,000,000 of the Prepetition Obligations,  (ii) replace
the Prepetition Letters of Credit, (iii) fund their working capital requirements
during the pendency of the Chapter 11 Cases,  and (iii) fund  general  corporate
purposes in the ordinary course of business.

     D. Having determined that it is in their respective best interests that the
Senior DIP Facility Borrowers obtain the financing under the Senior DIP Facility
for the purposes stated above, and it being a condition  precedent to the Senior
Agent's and the Senior  Lenders'  agreement  to provide the Senior DIP  Facility
that the Administrative Agent and the

<PAGE>

Lenders  subordinate  their claims and security  interests under the Prepetition
Credit  Documents to the claims and  security  interests of the Senior Agent and
the Senior  Lenders under the Senior DIP Facility on the terms set forth herein,
in the Senior DIP Facility  Documents and in the  Intercreditor  Agreement,  the
parties hereto have agreed to enter into this Agreement.

                                    ARTICLE 1
                                   DEFINITIONS

     SECTION 1.1. Definitions. All capitalized terms used but not defined herein
will have the meanings specified on Schedule 3 hereto.

                                    ARTICLE 2
                            SUBORDINATED DIP FACILITY

     SECTION 2.1. Term Loans.  Upon the terms and subject to the  conditions of,
and in  reliance  upon the  representations  and  warranties  made  under,  this
Agreement,  each Lender  agrees,  severally but not jointly,  to make term loans
(the  "Term  Loans")  to the  Borrowers  on the  Closing  Date  in an  aggregate
principal  amount  equal  to the sum of  $20,900,000,  representing  the  unpaid
borrowings under the Prepetition  Credit  Agreement  remaining after the Closing
Date  Repayment,  plus the amount of all accrued and unpaid  interest  under the
Prepetition  Credit Agreement as of the Closing Date (the "Loan Amount").  Fifty
percent  (50%) of the Loan  Amount  will be for the  account  of Fleet and fifty
percent  (50%) will be for the account of KeyBank.  The making of the Term Loans
on  the  Closing  Date  will  be  reflected  on the  books  and  records  of the
Administrative   Agent,   the  Lenders  and  the  Borrowers  as  a  payment  and
satisfaction in full of all outstanding  Prepetition  Obligations (other than in
respect of the Prepetition  Letters of Credit) owed to the respective Lenders on
the Closing Date after giving effect to the Closing Date  Repayment.  No amounts
will actually be funded to the Borrowers in respect of the Term Loans.

     SECTION 2.2. Maturity of Term Loans. The Term Loans will be due and payable
in full on the  Termination  Date.  "Termination  Date" as used  herein  has the
meaning  assigned  to such term in the Senior  DIP  Facility  Credit  Agreement;
provided that in no event will the Termination Date be later than the date which
is 18 months after the Closing  Date,  unless the  Administrative  Agent and the
Lenders agree to extend the Termination Date pursuant to Section 11.3 hereof.

     SECTION 2.3.  Interest  Rates and Payment  Dates.  The  Borrowers  will pay
interest on the unpaid  principal amount of the Term Loans for each day from the
Closing  Date until the Term Loans are paid in full  (whether  at  maturity,  by
reason of  acceleration  or  otherwise)  at the rate of 11% per annum;  provided
that,  if there shall occur and be  continuing  an Event of Default,  the unpaid
principal  amount  of the  Term  Loans  and all  other  amounts  due  hereunder,
including accrued and unpaid interest,  will bear interest for each day from the
date of such Event of Default  until such Event of Default is cured or waived at
the rate of 13% per annum.  Interest will accrue until the Consummation Date, at
which time all accrued interest will be paid in full in cash;  provided that, if
the Consummation  Date is later than April 7, 2001,  interest  accruing from and
after April 7, 2001 will be paid monthly in arrears on the last  business day of
each  month  and all  other  accrued  and  unpaid  interest  will be paid on the
Consummation Date; and provided,

                                       2

<PAGE>

further,  that  interest  accruing at the default rate referred to above will be
payable on demand.  The interest  rates  provided  above will be computed on the
basis of a year of 360 days for the actual number of days elapsed.

     SECTION 2.4.  Term Loan Notes.  Each  Lender's Term Loans and the joint and
several  obligation  of the  Borrowers  to repay  such Term  Loans  will also be
evidenced by a term loan note (a "Term Loan Note")  payable to the order of such
Lender substantially in the form of Exhibit A hereto with appropriate insertions
as to date and principal amount.

                                    ARTICLE 3
                          PREPETITION LETTERS OF CREDIT

     SECTION  3.1.  Prepetition  Letters of Credit.  (a) The  standby  letter of
credit  (NSL791866)  in the face  amount  of  400,000  GBP  (approximately  U.S.
$638,000  as of the date  hereof)  which was issued by  KeyBank as Issuing  Bank
under the Prepetition Credit Agreement to Midland Bank plc, as beneficiary,  for
the account of ASCL (the "Surviving  Letter of Credit") will remain  outstanding
after the Closing Date as an obligation of the Obligors hereunder subject to the
Superpriority  Claim and secured by the Collateral;  provided that the Surviving
Letter of Credit will be replaced  not later than May 19, 2000 with a new letter
of credit  issued  under the Senior DIP  Facility as set forth in the Senior DIP
Facility Credit Agreement. Any amount drawn under the Surviving Letter of Credit
prior to its  replacement  will bear  interest for each day until such amount is
reimbursed  in full in cash to the  Issuing  Bank and the  Lenders at a rate per
annum equal to the default rate referred to in Section 2.3.

     (b) The three  letters of credit in the  aggregate  face amount of $234,000
(NSL892395 for $26,900,  NSL892418 for $161,400 and NSL992701 for $42,500) which
were issued by KeyBank as Issuing Bank under the Prepetition Credit Agreement to
various  beneficiaries  for the account of the Safety Components and/or Valentec
International  Corporation,  LLC (the "Non-Surviving Letters of Credit") will be
replaced  with new letters of credit issued under the Senior DIP Facility on the
Closing  Date and such  Non-Surviving  Letters  of Credit  will be  returned  to
KeyBank for cancellation  within five days after the Closing Date. If any amount
is drawn under the  Non-Surviving  Letters of Credit prior to the Closing  Date,
such amount and all interest thereon and fees, costs and expenses of the Issuing
Bank and the  Lenders  associated  with  such  draw  will be  reimbursed  by the
Obligors on the Closing Date.

                                    ARTICLE 4
                             GENERAL LOAN PROVISIONS

     SECTION 4.1. Joint and Several Liability.  (a) The Postpetition Obligations
will  constitute one joint and several  direct and general  obligation of all of
the Borrowers.  Notwithstanding  anything to the contrary contained herein, each
of the  Borrowers  will be jointly  and  severally,  with each  other  Borrower,
directly and unconditionally  liable to the Administrative Agent and the Lenders
for all Postpetition Obligations,  it being agreed that the Administrative Agent
and the Lenders are relying on the joint and several  liability of the Borrowers
in entering  into this  Agreement.  Each  Borrower  hereby  unconditionally  and
irrevocably  agrees that upon default in the payment when due (whether at stated
maturity, by

                                       3

<PAGE>

acceleration or otherwise) of any principal of, or interest on, any Term Loan or
other Postpetition Obligation, it will forthwith pay the same, without notice or
demand.

     (b) No payment or payments made by any of the Borrowers or any other person
or received or collected by the  Administrative  Agent or any Lender from any of
the  Borrowers or any other person by virtue of any action or  proceeding or any
setoff  or  appropriation  or  application  at any time or from  time to time in
reduction  of or in payment of the  Postpetition  Obligations  will be deemed to
modify,  reduce, release or otherwise affect the liability of any Borrower under
this  Agreement,  each of which  will  remain  liable  for all the  Postpetition
Obligations until the Postpetition Obligations are paid in full.

     SECTION 4.2. Postpetition  Obligations Absolute.  Each Borrower agrees that
the Postpetition  Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Administrative
Agent or any Lender with respect thereto.  All Postpetition  Obligations will be
conclusively  presumed to have been created in reliance hereon.  The liabilities
under this Agreement will be absolute and unconditional irrespective of: (a) any
lack of validity or  enforceability  of this Agreement or the Term Loan Notes or
any other agreement or instrument relating thereto;  (b) any change in the time,
manner or place of  payment  of, or in any other term of, all or any part of the
Postpetition  Obligations,  or any  other  amendment  or waiver  thereof  or any
consent to  departure  therefrom,  including  any  increase in the  Postpetition
Obligations resulting from the extension of additional credit to any Borrower or
other Obligor or otherwise; (c) any taking, exchange,  release or non-perfection
of any  Collateral,  or any  release  or  amendment  or waiver of or  consent to
departure from any guaranty for all or any of the Postpetition Obligations;  (d)
any change, restructuring or termination of the corporate structure or existence
of any  Borrower or other  Obligor;  or (e) any other  circumstance  which might
otherwise  constitute a defense available to, or a discharge of, any Borrower or
a Guarantor.  This Agreement will continue to be effective or be reinstated,  as
the  case  may  be,  if at any  time  any  payment  of  any of the  Postpetition
Obligations  is  rescinded or must  otherwise be returned by the  Administrative
Agent or any Lender upon the  insolvency,  bankruptcy or  reorganization  of any
Borrower or other Obligor or otherwise,  all as though such payment had not been
made.

     SECTION 4.3. Waiver of Suretyship  Defenses.  Each Borrower agrees that the
joint and several  liability of the  Borrowers  provided for in Section 4.1 will
not be  impaired  or  affected by any  modification,  supplement,  extension  or
amendment  of any  contract  or  agreement  to which  the  other  Borrowers  may
hereafter agree (other than an agreement signed by the Administrative  Agent and
the Lenders specifically releasing such liability),  nor by any delay, extension
of time,  renewal,  compromise or other indulgence granted by the Administrative
Agent or any Lender with respect to any of the Postpetition Obligations,  nor by
any other  agreements or arrangements  whatever with the other Borrowers or with
anyone else, each Borrower  hereby waiving all notice of such delay,  extension,
release,  substitution,  renewal,  compromise  or other  indulgence,  and hereby
consenting to be bound thereby as fully and  effectually  as if it had expressly
agreed  thereto  in  advance.  The  liability  of each  Borrower  is direct  and
unconditional  as to all of the  Postpetition  Obligations,  and may be enforced
without requiring the Administrative  Agent or any Lender first to resort to any
other  right,  remedy  or  security.   Each  Borrower  hereby  expressly  waives
promptness, diligence, notice of acceptance and any other

                                       4

<PAGE>

notice (except to the extent expressly  provided for herein) with respect to any
of the Postpetition  Obligations,  the Term Loan Notes or this Agreement and any
requirement that the Administrative Agent or any Lender protect, secure, perfect
or insure any Lien or any property  subject thereto or exhaust any right or take
any action against any Borrower or any other person or any Collateral.

     SECTION  4.4.  Superpriority  Nature  of  Postpetition   Obligations.   The
Postpetition Obligations will constitute  administrative expenses of the Debtors
in the Chapter 11 Cases having the highest  available  priority  under  Sections
364(c) and (d) and 507(b) of the Bankruptcy  Code,  with priority over all other
costs and  expenses  of the kind  specified  in, or  ordered  pursuant  to,  any
provision  of the  Bankruptcy  Code (the  "Superpriority  Claim"),  subject  and
subordinate only to the superpriority claim of the Senior Lenders under Sections
364(c) and (d) of the Bankruptcy Code. Except for the superpriority claim of the
Senior Lenders, the superpriority claims, if any, permitted under the Senior DIP
Facility  Credit  Agreement  and the  Carve-Out,  no other  claim  of any  other
creditor will be senior, or equal in priority, to the Postpetition Obligations.

                                    ARTICLE 5
                              CONDITIONS PRECEDENT

     SECTION 5.1. Conditions Precedent.  This Agreement will become effective on
the  date,  which  must be not  later  than May 15,  2000,  on which  all of the
following conditions are satisfied (the "Closing Date"):

          (a) The execution  and delivery by the Obligors to the  Administrative
     Agent and the Lenders of this Agreement;

          (b) The execution and delivery by the Borrowers to each Lender of such
     Lender's Term Loan Note;

          (c) (i) The  execution  and delivery by the Senior  Agent,  the Senior
     Lenders,  the Senior DIP  Facility  Borrowers  and the Senior DIP  Facility
     Guarantors  of the Senior DIP  Facility  Documents,  provided  that (x) any
     modifications  to such  documents  made  after the date  hereof,  including
     without  limitation,  any  modifications to the schedules to the Senior DIP
     Facility  Credit  Agreement  and (y) any order  approving  the  Senior  DIP
     Facility  (if  different  from the Final  Order  referred to below) must be
     reasonably  satisfactory to the Administrative Agent and the Lenders in all
     material respects; and (ii) the satisfaction of all conditions precedent to
     the initial borrowings under the Senior DIP Facility;

          (d) (i) The  entry  of an  order of the  Court  after a final  hearing
     pursuant to Federal  Bankruptcy  Rule 4001(c)(2) on a motion by the Debtors
     approving  the  Subordinated  DIP  Facility,   which  order  (x)  shall  be
     satisfactory to the  Administrative  Agent, the Lenders and the Obligors in
     all respects,  (y) shall not have been appealed from prior to the date that
     is ten (10) days after the date the order was  entered on the docket of the
     Court (the "Appeal Period"), and (z) shall not have been modified, amended,
     reversed,  stayed,  vacated or rescinded  (the "Final  Order") and (ii) the
     Appeal  Period shall have expired and not have been tolled by the filing of
     any motion for rehearing, reconsideration or reargument;

                                       5

<PAGE>

          (e) All "first day orders"  entered at the time of commencement of the
     Chapter 11 Cases shall be reasonably  satisfactory in form and substance to
     the Administrative Agent and each Lender;

          (f) The Required  Noteholder  Representatives  shall have executed and
     delivered the Restructuring Agreement;

          (g) No  Consenting  Holders  Termination  Event or  Safety  Components
     Termination Event shall have occurred;

          (h)  The  Obligors  shall  have  (i)   transferred  or  caused  to  be
     transferred  to the Lenders cash in the amount of  $17,000,000  in order to
     effect the Closing Date Repayment and (ii) paid to the Administrative Agent
     and each  Lender all fees and  expenses  payable by the  Obligors  pursuant
     hereto  (including  without  limitation,  all amounts  described in Section
     11.6) and pursuant to the Prepetition  Credit  Agreement which have accrued
     up to the Petition Date;

          (i) The Non-Surviving  Letters of Credit shall have been replaced with
     new letters of credit  issued  under the Senior DIP  Facility  prior to any
     draw thereunder or, if any amount is drawn under the Non-Surviving  Letters
     of Credit prior to the Closing Date,  such amount and all interest  thereon
     and fees,  costs and  expenses  of the Issuing  Bank and the other  Lenders
     associated with such draw shall have been reimbursed by the Obligors;

          (j) No draw shall have been made under the Surviving  Letter of Credit
     or, if such a draw has been made,  the  amount  thereof  together  with all
     fees, costs and expenses associated therewith shall have been reimbursed to
     the Issuing Bank and the Lenders in cash; and

          (k) No event shall have  occurred and no  condition  shall exist that,
     with the giving of notice or the passage of time or both,  would constitute
     an Event of Default.

                                    ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

     SECTION  6.1.  Representations  and  Warranties.  The  representations  and
warranties set forth in Article 6 of the Senior DIP Facility  Credit  Agreement,
including  all  schedules  referred  to  therein,  are  hereby  incorporated  by
reference in this Agreement for the benefit of the Administrative  Agent and the
Lenders with the same force and effect as if set forth herein in full.

                                   ARTICLE 7
                                SECURITY INTEREST

     SECTION 7.1. Security Interest.  (a) To secure the payment,  observance and
performance of the  Postpetition  Obligations,  each Obligor hereby restates and
confirms the mortgages,  pledges,  assignments  and grants of Liens and security
interests  made by such  Obligor  in favor of the  Administrative  Agent and the
Lenders  pursuant to the  Security  Documents  and agrees  that such  mortgages,
pledges,  assignments,  Liens and security interests will constitute  continuing
security interests in and Liens on the Collateral, including without limitation,
all Collateral acquired by the Obligors after the Petition Date, in favor of the
Administrative Agent

                                       6

<PAGE>

for the  ratable  benefit  of the  Lenders,  as  security  for the  Postpetition
Obligations.  Pursuant to Sections  364(c) and (d) of the Bankruptcy  Code, such
Liens and security  interests will constitute  valid,  perfected and enforceable
security  interests in and Liens on the Collateral  and all proceeds,  products,
substitutions and replacements thereof,  subject, however, to the first priority
security interests of the Senior Lenders under the Senior DIP Facility Documents
and other Permitted Liens;  provided,  however, that the Administrative  Agent's
and the Lenders'  security  interests in certain assets of GmbH granted pursuant
to the Security  Documents will continue to constitute  first priority  security
interests securing the Postpetition Obligations. Notwithstanding anything to the
contrary herein, the Collateral will not include any avoidance actions available
to the  bankruptcy  estates of the Debtors  pursuant to sections  542, 544, 545,
547,  548, 549, 550,  551,  553(b) and/or 724(a) of the  Bankruptcy  Code or the
proceeds thereof.

     (b) The  security  interests  in and Liens on the  Collateral  securing the
Postpetition  Obligations will be senior in rank and priority to all other Liens
on and  security  interests  in the  Collateral,  subject  only to (a) any other
valid, perfected and enforceable security interests and Liens (i) existing as of
the Petition Date that are nonavoidable  under the Bankruptcy Code or applicable
nonbankruptcy  law and not otherwise subject to Section 552(a) of the Bankruptcy
Code,  (ii) existing as of the Closing Date in favor of the Senior  Lenders,  or
(iii) arising after the Petition  Date that are  expressly  permitted  under the
Senior DIP Facility  Documents,  and (b) the  Carve-Out.  The Liens and security
interests  securing the Postpetition  Obligations will at all times be senior to
the   rights  of  the   Debtors   and  any   successor   trustee(s)   or  estate
representative(s)  in any case or proceeding  under the Bankruptcy  Code and any
Lien or  security  interest  in the  Collateral  that is  avoided  or  otherwise
preserved for the benefit of the Debtors'  estates will be  subordinate  to such
Liens and security  interests.  Subject to Section  11.1(c)  below,  no Liens or
security interests in the Collateral securing the Postpetition Obligations,  and
no claim of the  Administrative  Agent or any Lender hereunder in respect of the
Postpetition Obligations,  will be subject to subordination to any other Lien or
security interest or claim or to surcharge,  whether under Section 506 or 510 of
the Bankruptcy Code or otherwise provided that the claims and security interests
of the  Administrative  Agent  and  the  Lenders  hereunder  in  respect  of the
Postpetition  Obligations  will  be  subordinated  to the  claims  and  security
interests of the Senior Lenders as provided  herein,  in the Senior DIP Facility
Documents and in the Intercreditor Agreement.

     (c) The  Liens  and  security  interests  in the  Collateral  securing  the
Postpetition  Obligations  and  the  Superpriority  Claim  will,  following  the
occurrence and during the continuation of an Event of Default, be subject to (a)
unpaid  professional  fees and  disbursements  allowed by order of the Court and
incurred by the Debtors, any official committee of unsecured creditors appointed
in the Chapter 11 Cases,  and any  disbursements of any member of such committee
and any Chapter 7 trustee  appointed for the Debtors in an aggregate  amount not
to exceed $500,000  (determined without regard to fees and expenses which may be
awarded and paid on an interim  basis or any  prepetition  retainer  paid to the
Debtors'  counsel in connection  with or related to the Chapter 11 Cases) at any
time,  and (b) fees payable to the United States  Trustee  pursuant to 28 U.S.C.
ss. 1930(a)(6) and any fees payable to the clerk of the Court (the "Carve-Out").
The Carve-Out will exclude any fees and expenses incurred in connection with the
investigation  or  prosecution  of any  claims or causes of action  against  the
Administrative  Agent or any Lender or in  connection  with any challenge to the
validity, enforceability,

                                       7

<PAGE>

allowance, perfection or priority of the claims and/or security interests of any
of them, whether existing prior to or after the Petition Date.

     (d) Each Obligor will, at its sole cost and expense,  take all actions that
may be necessary or desirable,  or that the Administrative  Agent may reasonably
request, so as at all times to maintain the validity, perfection, enforceability
and  priority  of the  Liens on and  security  interests  in the  Collateral  in
conformity  with  the   requirements  of  this  Article  7,  or  to  enable  the
Administrative  Agent and the  Lenders  to  exercise  or  enforce  their  rights
hereunder and under the Security  Documents,  including executing and delivering
financing  statements,  pledges,  designations,   hypothecations,   notices  and
assignments   in  each  case  in  form  and   substance   satisfactory   to  the
Administrative Agent relating to the creation, validity, perfection, maintenance
or  continuation  of  such  Liens  and  security  interests  under  the  Uniform
Commercial Code or other applicable law.

                                    ARTICLE 8
                                    COVENANTS

     SECTION 8.1. Affirmative Covenants.  The affirmative covenants set forth in
Article 9 of the Senior DIP Facility Credit Agreement are hereby incorporated by
reference in this Agreement for the benefit of the Administrative  Agent and the
Lenders  with the same  force  and  effect as if set  forth  herein in full.  In
addition, the Debtors agree to file a Plan of Reorganization consistent with the
terms hereof, including treatment of the Lenders' claims as set forth herein.

     SECTION 8.2. Information.  The reporting  requirements set forth in Article
10 of the Senior DIP  Facility  Credit  Agreement  are  hereby  incorporated  by
reference in this Agreement for the benefit of the Administrative  Agent and the
Lenders  with the same  force and  effect as if set  forth  herein in full.  The
Obligors  will furnish to the  Administrative  Agent and each Lender,  not later
than the date such item is required to be  delivered to the Senior Agent and the
Senior Lenders under the Senior DIP Facility  Credit  Agreement,  each financial
statement,  certificate,  report, document and notice described in Article 10 of
the Senior DIP Facility Credit Agreement.

     SECTION 8.3.  Negative  Covenants.  The  financial  covenants  and negative
covenants  set forth in Article 11 of the Senior DIP Facility  Credit  Agreement
are hereby  incorporated  by reference in this  Agreement for the benefit of the
Administrative  Agent and the  Lenders  with the same force and effect as if set
forth herein in full.

                                    ARTICLE 9
                                EVENTS OF DEFAULT

     SECTION  9.1.  Events of  Default.  The  "Events of  Default"  under and as
defined in the Senior DIP Facility Credit  Agreement are hereby  incorporated by
reference in this Agreement for the benefit of the Administrative  Agent and the
Lenders and will  constitute  Events of Default  hereunder  unless waived by the
Senior Lenders or cured in accordance  with the terms of the Senior DIP Facility
Credit Agreement; provided that no such waiver will be effective for purposes of
limiting  the  Lenders'  rights to  receive  interest  on the Term  Loans at the

                                       8

<PAGE>

default rate as provided in Section 2.3. In addition,  the following events will
constitute Events of Default under this Agreement:

          (a) Failure by the Obligors to pay any principal of or interest on the
     Term Loans when due; or

          (b) (i) Unless all the Lenders and the Administrative  Agent otherwise
     agree, the Court shall enter an order granting another  superpriority claim
     (other  than  the  Superpriority  Claim of the  Senior  Lenders  and  other
     superpriority  claims,  if any,  permitted  under the Senior  DIP  Facility
     Credit  Agreement)  pari  passu  with  or  senior  to that  granted  to the
     Administrative  Agent and the Lenders  pursuant to this  Agreement  and the
     Final  Order or (ii) the Final  Order  shall have been  modified,  amended,
     reversed, stayed, vacated or rescinded; or

          (c) The Surviving  Letter of Credit shall be drawn in whole or in part
     prior to its  replacement by a new letter of credit issued under the Senior
     DIP Facility and the amount of such draw is not  reimbursed  to the Issuing
     Bank and/or the Lenders in cash within five calendar days; or

          (d) Any Obligor or any  Consenting  Holder  shall file any pleading or
     otherwise  take any  action  seeking  or  consenting  to the  invalidation,
     reduction,  subordination or other impairment of, or otherwise challenging,
     the claims of the Administrative Agent or the Lenders under the Prepetition
     Credit Agreement or of the  Administrative  Agent or the Lenders under this
     Agreement  or the Liens  and  security  interests  granted  to  secure  the
     Prepetition  Obligations  or the  Postpetition  Obligations,  or seeking to
     subject such security  interest to assessment  under Section  506(c) of the
     Bankruptcy Code; or

          (e) A  Consenting  Holders  Termination  Event or a Safety  Components
     Termination  Event shall have  occurred  and not been waived in  accordance
     with the terms of the Restructuring Agreement.

     SECTION 9.2.  Remedies.  Upon the occurrence and during the  continuance of
any Event of Default,  the Administrative Agent may, and at the direction of the
Lenders shall, take any or all of the following actions without further order of
or application to the Court:

          (a) declare the principal of and accrued interest on the Term Loans to
     be immediately due and payable; and

          (b) take any  other  action  or  exercise  any  other  right or remedy
     provided for under the Security  Documents  or  otherwise  permitted  under
     applicable law,  subject,  however,  to compliance  with the  Intercreditor
     Agreement and the  provision of five (5) days' prior written  notice to the
     Debtors and any official committee of creditors appointed in the Chapter 11
     Cases  pursuant  to  Section  1102 of the  Bankruptcy  Code  (a  "Creditors
     Committee").

                                       9

<PAGE>

                                   ARTICLE 10
                                    GUARANTEE

     SECTION 10.1.  Guarantee.  (a) The Guarantors  hereby jointly and severally
guarantee to the Administrative Agent and the Lenders the prompt payment in full
when due (whether at stated maturity,  by acceleration or otherwise) of the Term
Loans and all of the other  Postpetition  Obligations  hereunder,  including any
interest,  fees and expenses  accrued or incurred after the filing by or against
any Obligor of any petition seeking relief in bankruptcy or under any act or law
pertaining to insolvency or debtor relief,  regardless of whether such interest,
fees and  expenses  are  allowable  in any such  proceeding  (collectively,  the
"Guaranteed Obligations"), in each case strictly in accordance with the terms of
this Agreement and the Term Loan Notes.  The Guarantors  hereby further  jointly
and  severally  agree  that if any  Borrower  shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations,  the Guarantors  will promptly pay the same,  without any demand or
notice  whatsoever,  and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations,  the same will be promptly paid in
full when due (whether at extended  maturity,  by  acceleration or otherwise) in
accordance with the terms of such extension or renewal.

     (b)  The   obligations  of  the  Guarantors   hereunder  are  absolute  and
unconditional,  joint  and  several,  irrespective  of the  value,  genuineness,
validity, regularity or enforceability of the obligations of the Borrowers under
this Agreement or the Term Loan Notes or any  substitution,  release or exchange
of any other  guarantee  of or security for any of the  Guaranteed  Obligations,
and, to the fullest  extent  permitted by applicable  law,  irrespective  of any
other  circumstance  whatsoever  that  might  otherwise  constitute  a legal  or
equitable  discharge  of defense of a surety or  guarantor,  it being the intent
hereof that the  obligations  of the  Guarantors  hereunder will be absolute and
unconditional, and joint and several, under all circumstances.  Without limiting
the generality of the foregoing,  it is agreed that each Guarantor's obligations
hereunder will be absolute and  unconditional  irrespective  of: (i) any lack of
validity or enforceability of any of the Borrowers'  obligations hereunder or of
any  agreement  or  instrument  relating  thereto;  (ii) any change in the time,
manner or place of  payment  of, or in any other term of, all or any part of the
Guaranteed Obligations,  or any other amendment or waiver thereof or any consent
to departure  therefrom,  including any increase in the  Guaranteed  Obligations
resulting from the extension of additional  credit to any Borrower or otherwise;
(iii) any taking, exchange,  release or non-perfection of any Collateral, or any
release or amendment or waiver of or consent to departure  from any guaranty for
all or any of the  Guaranteed  Obligations;  (iv) any change,  restructuring  or
termination of the corporate  structure or existence of any Obligor;  or (v) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Guarantor.

     (c) Each  Guarantor  agrees  that the joint and  several  liability  of the
Guarantors provided for in this Section 10.1 will not be impaired or affected by
any  modification,  supplement,  extension  or  amendment  or  any  contract  or
agreement  to which  the other  Obligors  may  hereafter  agree  (other  than an
agreement  signed  by the  Administrative  Agent  and the  Lenders  specifically
releasing  such  liability),  nor by any  delay,  extension  of  time,  renewal,
compromise or other indulgence granted by the Administrative Agent or any Lender
with respect to any of the Guaranteed  Obligations,  nor by any other agreements
or arrangements whether with

                                       10

<PAGE>

the other Obligors or with anyone else, each Guarantor hereby waiving all notice
of such delay, extension,  release,  substitution,  renewal, compromise or other
indulgence,  and hereby  consenting to be bound thereby as fully and effectually
as if it had  expressly  agreed  thereto  in  advance.  The  liability  of  each
Guarantor is direct and  unconditional as to all of the Guaranteed  Obligations,
and may be enforced  without  requiring the  Administrative  Agent or any Lender
first to resort to any other right,  remedy or security.  Each Guarantor  hereby
expressly  waives  promptness,  diligence,  notice of  acceptance  and any other
notice (except to the extent expressly  provided for herein) with respect to any
of the Guaranteed  Obligations or this  Agreement and any  requirement  that the
Administrative Agent or any Lender protect,  secure,  perfect or insure any Lien
or any property  subject thereto or exhaust any right or take any action against
any Borrower or any other Person or any Collateral.

     (d) The  obligations  of the  Guarantors  hereunder  will be  automatically
reinstated  if and to the extent that for any reason any payment by or on behalf
of any Obligor in respect of any of the  Guaranteed  Obligations is rescinded or
must be otherwise  restored by any holder of any of the Guaranteed  Obligations,
whether  as a result of any  proceedings  in  bankruptcy  or  reorganization  or
otherwise,  and the  Guarantors  jointly  and  severally  agree  that  they will
indemnify the Administrative  Agent and each Lender on demand for all reasonable
costs and  expenses  (including  fees of counsel as  provided  in Section  11.6)
incurred by the  Administrative  Agent and the Lenders in  connection  with such
recission or  restoration,  including  any such costs and  expenses  incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent  transfer or similar  payment  under any  bankruptcy,  insolvency  or
similar law.

     (e) The  Guarantors  jointly  and  severally  agree  that,  as between  the
Guarantors  and  the  Administrative  Agent  and  the  Lenders,  the  Guaranteed
Obligations  may be declared to be forthwith due and payable as provided  herein
(and  shall be  deemed  to have  become  automatically  due and  payable  in the
circumstances  provided herein) for purposes hereof,  notwithstanding  any stay,
injunction or other prohibition  preventing such declaration (or such Guaranteed
Obligations from becoming automatically due and payable) as against any Borrower
and  that,  in the  event of such  declaration  (whether  or not the  Guaranteed
Obligations  are  then  due  and  payable  by  any  Borrower),   the  Guaranteed
Obligations will forthwith become due and payable by the Guarantors for purposes
hereof.

     (f) The guaranty set forth herein is a continuing guaranty,  and will apply
to all Guaranteed Obligations, whenever and howsoever arising.

                                   ARTICLE 11
                                  MISCELLANEOUS

     SECTION 11.1. Obligor Acknowledgment; Release.

     (a) The Obligors hereby represent, warrant, acknowledge, covenant and agree
for all  purposes  hereof  that (i) as of the  Petition  Date,  the  Prepetition
Obligations  totalled  not  less  than  $38,867,766,  including  all  principal,
interest,  letter of credit fees, other fees, costs,  expenses and other charges
and contingent  reimbursement  obligations in respect of the Prepetition Letters
of Credit,  but excluding certain  professional fees (such amount being referred
to herein as the

                                       11

<PAGE>

"Claim Amount"),  (ii) the claims  comprising the Claim Amount  constitute valid
and enforceable allowed claims under the Bankruptcy Code free of defense, offset
or  counterclaim,  (iii) the  mortgages,  Liens and  security  interests  in the
Collateral granted in favor of the Administrative  Agent for the ratable benefit
of the Lenders  pursuant to the Security  Documents  are valid and  enforceable,
duly perfected first priority  mortgages,  Liens and security  interests and are
not  subject to any prior  Lien,  defense,  offset or  counterclaim,  other than
Permitted Liens (as defined in the Prepetition Credit Agreement) existing on the
Petition  Date,  (iv) the  value of the  Collateral  is not less  than the Claim
Amount and (v) each Obligor  waives any claim under ss. 506(c) of the Bankruptcy
Code with respect to the Collateral or the Lenders' interests therein.

     (b) In consideration of the agreements of the Administrative  Agent and the
Lenders provided herein, each Obligor, with the intent of binding itself and its
representatives,  agents, directors, officers, employees, affiliates, attorneys,
principals, estate, successors and assigns, hereby releases, remises and forever
discharges  the  Administrative  Agent  and each  Lender  and  their  respective
representatives,  agents, affiliates, attorneys, principals, estates, successors
and assigns, from any and all claims,  liabilities,  actions,  causes of action,
judgments or suits which may now or in the future be alleged or asserted by such
Obligor  against  the  Administrative  Agent or any  Lender  in  respect  of the
Prepetition Credit Documents, including the financial accommodations extended by
the Lenders (including KeyBank as Issuing Bank) thereunder, all payments made to
the  Lenders  thereunder  (whether  prior to or after the  Petition  Date),  the
claims, Liens and security interests granted to the Administrative Agent and the
Lenders  thereunder  and all  other  transactions  entered  into  in  connection
therewith (collectively, the "Released Claims").

     (c)  Notwithstanding   anything  to  the  contrary  contained  herein,  any
Creditors Committee and any other Person with the requisite standing (other than
the Debtors and the  Consenting  Holders)  shall have 45 calendar  days from the
date of appointment of a Creditors  Committee to file and serve any complaint or
other pleading asserting any Released Claim, except that such Persons shall have
no recourse to the Closing Date Repayment or the  Prepetition  Letters of Credit
or any  replacements  thereof,  their  only  recourse  being to the  Term  Loans
extended hereunder.  If no such complaint or other pleading is timely filed, the
full release  provided in  paragraph  (b) above will become final and binding on
all Persons.

     SECTION 11.2. Effect on Plan of Reorganization.  None of the rights granted
to the  Administrative  Agent or the Lenders  pursuant hereto or pursuant to the
Final  Order  or any  order  entered  by the  Court  approving  the  use of cash
collateral  will be  modified,  altered  or  impaired  in any way by any Plan of
Reorganization,  confirmation  order or  otherwise  without  the  prior  written
consent of the Administrative Agent and each Lender.

     SECTION 11.3. Exit Facility.  In connection with the consummation of a Plan
of  Reorganization  for the Debtors,  and subject to the satisfaction of each of
the conditions set forth on Schedule 4 hereto, the Administrative Agent and each
Lender will agree to extend the Termination  Date with respect to the Term Loans
on the terms set forth on Schedule 5 hereto.

     SECTION 11.4.  Governing Law; Submission to Jurisdiction;  Venue; Waiver of
Jury  Trial.  THIS  AGREEMENT  AND  THE  TERM  LOAN  NOTES  AND THE  RIGHTS  AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER WILL

                                       12

<PAGE>

BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. THE OBLIGORS,  THE ADMINISTRATIVE  AGENT AND THE LENDERS HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF
ANY KIND OR  NATURE  IN ANY  COURT IN WHICH AN  ACTION  MAY BE  COMMENCED  BY OR
AGAINST THE OBLIGORS (OR ANY OF THEM), THE  ADMINISTRATIVE  AGENT OR THE LENDERS
ARISING  OUT OF THIS  AGREEMENT,  THE TERM LOAN  NOTES,  THE  COLLATERAL  OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN
THE OBLIGORS (OR ANY OF THEM) AND THE ADMINISTRATIVE  AGENT OR ANY LENDER OF ANY
KIND OR NATURE. THE OBLIGORS,  THE  ADMINISTRATIVE  AGENT AND THE LENDERS HEREBY
AGREE THAT THE FEDERAL  COURT OF  DISTRICT OF DELAWARE  OR, AT THE OPTION OF THE
ADMINISTRATIVE  AGENT OR ANY LENDER, ANY COURT IN WHICH THE ADMINISTRATIVE AGENT
OR SUCH LENDER  SHALL  INITIATE  LEGAL OR  EQUITABLE  PROCEEDINGS  AND WHICH HAS
SUBJECT  MATTER  JURISDICTION  OVER  THE  MATTER  IN  CONTROVERSY,   SHALL  HAVE
NONEXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES  BETWEEN
THE  OBLIGORS  (OR ANY OF THEM)  AND THE  ADMINISTRATIVE  AGENT OR SUCH  LENDER,
PERTAINING  DIRECTLY OR INDIRECTLY TO THIS AGREEMENT,  THE TERM LOAN NOTES OR TO
ANY MATTER ARISING  THEREFROM.  EACH OBLIGOR  EXPRESSLY  SUBMITS AND CONSENTS IN
ADVANCE TO SUCH  JURISDICTION  IN ANY  ACTION OR  PROCEEDING  COMMENCED  IN SUCH
COURTS,  HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT,  OR OTHER
PROCESS OR PAPERS  ISSUED  THEREIN AND AGREEING THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED  TO THE  OBLIGORS  AT THE ADDRESS OF SAFETY  COMPONTENTS  SET FORTH IN
SECTION 11.7. THE  NONEXCLUSIVE  CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL
NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM
OR THE  TAKING  OF ANY  ACTION  UNDER  THIS  AGREEMENT  TO  ENFORCE  SAME IN ANY
APPROPRIATE JURISDICTION.

     SECTION 11.5. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute  one and the same  agreement.  A set of  counterparts
executed by all the parties  hereto  shall be lodged with the Safety  Components
and the Administrative Agent.

     SECTION 11.6.  Payment of Expenses etc. The Obligors  agree to: (a) whether
or not the transactions herein contemplated are consummated,  pay all reasonable
out-of-pocket costs and expenses of the Administrative  Agent in connection with
(i) the Chapter 11 Cases and (ii) the  negotiation,  preparation,  execution and
delivery of this Agreement and the documents and instruments  referred to herein
and any  amendment,  waiver or  consent  relating  thereto  (including,  without
limitation,  the reasonable fees and disbursements of Jones, Day, Reavis & Pogue
and Young  Conaway  Stargatt & Taylor,  special  counsels to the  Administrative
Agent and

                                       13

<PAGE>

the Lenders, and of Conway MacKenzie & Dunleavy,  advisors to Jones, Day, Reavis
& Pogue,  as counsel to the  Administrative  Agent and the Lenders),  and of the
Administrative  Agent in connection  with the  enforcement of this Agreement and
the documents and instruments referred to herein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative  Agent);
(b)  pay  on  demand  all  reasonable   costs  and  expenses   incurred  by  the
Administrative  Agent  and for  each of the  Lenders,  including  the  fees  and
disbursements of counsel,  experts and other  consultants to the  Administrative
Agent and each of the Lenders,  in  connection  with any actions taken after the
occurrence  of an  Event  of  Default  to  obtain  payment  of the  Postpetition
Obligations,  enforce the Liens and  security  interests  of the  Administrative
Agent and the  Lenders,  sell or  otherwise  realize  upon the  Collateral,  and
otherwise  enforce the provisions  hereof and of the Security  Documents,  or to
prosecute or defend any claim in any way arising out of, related to or connected
with, this Agreement or any of the Security Documents (except to the extent such
may be  prohibited  by the  terms  of the  Final  Order);  (c) pay and  hold the
Administrative  Agent and each of the Lenders  harmless from and against any and
all  present  and  future  stamp and other  similar  taxes  with  respect to the
foregoing  matters  and save the  Administrative  Agent and each of the  Lenders
harmless from and against any and all  liabilities  with respect to or resulting
from any  delay or  omission  (other  than to the  extent  attributable  to such
Lender) to pay such taxes; and (d) indemnify the  Administrative  Agent and each
Lender,  its  officers,   directors,   employees,   representatives  and  agents
(collectively,  the  "Indemnitees")  from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses reasonably incurred
by any of them as a result of, or arising  out of, or in any way  related to, or
by reason of (i) any investigation,  litigation or other proceeding  (whether or
not  any  Lender  is a  party  thereto)  related  to the  entering  into  and/or
performance  of this  Agreement  or the use of the proceeds of the Term Loans or
the consummation of any transactions contemplated in this Agreement,  other than
any such  investigation,  litigation or proceeding  arising out of  transactions
solely  between any of the  Lenders or the  Administrative  Agent,  transactions
solely  involving  the  assignment  by a Lender of all or a portion  of its Term
Loans, or the granting of participations therein, as provided in this Agreement,
or arising solely out of any examination of a Lender by any regulatory authority
having jurisdiction over it, or relating to the assertion of a Released Claim to
the extent permitted under Section 11.1(c),  or (ii) any Environmental  Claim in
respect  of any real  property  owned,  leased  or at any time  operated  by any
Obligor,  including,  in each case, without limitation,  the reasonable fees and
disbursements  of counsel  incurred in connection  with any such  investigation,
litigation or other  proceeding  (but  excluding  any such losses,  liabilities,
claims,  damages  or  expenses  to the  extent  incurred  by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee  who is such person or an  affiliate of such  person).  To the extent
that the undertaking to indemnify,  pay or hold harmless any person set forth in
the preceding  sentence may be unenforceable  because it is violative of any law
or public policy, the Obligors will make the maximum contribution to the payment
and  satisfaction  of each of the indemnified  liabilities  which is permissible
under applicable law. All costs and expenses payable by the Obligors pursuant to
this Section 11.6 will be paid on a monthly basis,  subject to compliance by the
Administrative Agent and the Lenders with any notice procedures set forth in any
administrative order entered by the Court.

     SECTION 11.7.  Notices.  Except as otherwise expressly provided herein, all
notices  and other  communications  provided  for  hereunder  will be in writing
(including  telegraphic,  telex,  facsimile transmission or cable communication)
and mailed, telegraphed,

                                       14

<PAGE>

telexed, transmitted, cabled or delivered, (a) if to any Obligor to such Obligor
at Safety  Components  International,  Inc.,  Corporate Center, 40 Emery Street,
Greenville,  South Carolina  29605,  attention:  Brian P. Menezes,  Telefax no.:
(864)  240-2726,  with a copy to  Milbank,  Tweed,  Hadley & McCloy LLP, 1 Chase
Manhattan Plaza, New York, New York 10005-1413, attention: Luc A. Despins, Esq.,
Telefax no.: (212) 530-5219;  (b) if to the  Administrative  Agent or KeyBank at
KeyBank National  Association,  66 S. Pearl Street, 5th Floor,  Albany, New York
12207,  attention:  Leslie A. Jones, Telefax no.: (518) 487-4247, with a copy to
Jones,  Day,  Reavis & Pogue,  599 Lexington  Avenue,  New York, New York 10022,
attention:  Cindy Tzerman and Michael R. Bassett,  Telefax no.: (212)  755-7306;
(c) if to Fleet, at Fleet Bank, 777 Main Street, CTMOH21, Hartford,  Connecticut
06115,  attention:  Scott A.  Lessne  and Andrew  Maidman,  Telefax  no.:  (860)
986-5076;  or (d) at such other address as shall be designated by any party in a
written notice to the other parties hereto.  All such notices and communications
shall  be  mailed,  telegraphed,  telexed,  telecopied,  or  cabled  or  sent by
overnight courier, and shall be effective when received.

     SECTION  11.8.  Agency.  The  provisions  set  forth in  Section  11 of the
Prepetition  Credit  Agreement  are hereby  incorporated  by  reference  in this
Agreement for the benefit of the  Administrative  Agent and the Lenders with the
same effect as if set forth herein in full.  Each reference in Section 11 of the
Prepetition  Credit  Agreement to  "Agreement"  will mean this  Agreement,  each
reference to "Credit  Documents" will mean this  Agreement,  the Term Loan Notes
and the Security Documents and each reference to "Default" or "Event of Default"
will mean "Event of Default" as defined in this Agreement.

     SECTION  11.9.  Amendment or Waiver.  Neither this  Agreement nor any terms
hereof may be changed,  waived,  discharged  or  terminated  unless such change,
waiver,  discharge or  termination  is in writing  signed by the  Obligors,  the
Administrative  Agent and the Required  Lenders,  provided  that no such change,
waiver,  discharge  or  termination  shall,  without  the consent of each Lender
affected thereby, (i) extend the Termination Date, reduce the rate or extend the
time of payment of interest,  or reduce the  principal  amount of such  Lender's
Term Loans, (ii) release any Obligor from its respective  obligations under this
Agreement, (iii) release all or substantially all of the Collateral, (iv) amend,
modify or waive any provision of this Section  11.9.,  (v) reduce the percentage
specified in, or otherwise  modify,  the  definition of Required  Lenders,  (vi)
consent to the  assignment  or  transfer by any Obligor of any of its rights and
obligations under this Agreement or (vii) modify the Superpriority  Claim status
of the Postpetition Obligations.  Section 11.8 hereof may not be amended without
the written consent of the Administrative Agent.

     SECTION  11.10.  Assignments  and  Participations.  The Term  Loans and the
rights and interests of the Lenders  hereunder will be freely assignable by each
Lender,  subject  to the  prior  written  consent  of the  Administrative  Agent
(provided  that any  assignment  by KeyBank  will require the consent of Fleet),
which consent will not be  unreasonably  withheld.  Each  assignment  will be by
novation.  Each  Lender will have the right to sell  participations  in its Term
Loans, subject to customary voting limitations.

                                       15

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their duly authorized officers in several counterparts all as of the
day and year first written above.

BORROWERS:                              SAFETY COMPONENTS INTERNATIONAL, INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        AUTOMOTIVE SAFETY COMPONENTS
                                        GMBH & CO. KG

                                        By:  __________________________________

                                        Its: __________________________________

                                        AUTOMOTIVE SAFETY COMPONENTS
                                        INTERNATIONAL LIMITED

                                        By:  __________________________________

                                        Its: __________________________________

GUARANTORS:                             AUTOMOTIVE SAFETY COMPONENTS
                                        INTERNATIONAL, INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        ASCI HOLDINGS GERMANY (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        ASCI HOLDINGS CZECH (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                       16

<PAGE>

                                        ASCI HOLDINGS MEXICO (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        ASCI HOLDINGS ASIA (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        ASCI HOLDINGS POLAND (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        VALENTEC SYSTEMS, INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        GALION, INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        VALENTEC INTERNATIONAL
                                        CORPORATION, LLC

                                        By:  __________________________________

                                        Its: __________________________________

                                        SAFETY COMPONENTS FABRIC
                                        TECHNOLOGIES, INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                        ASCI HOLDINGS UK (DE), INC.

                                        By:  __________________________________

                                        Its: __________________________________

                                       17

<PAGE>

ADMINISTRATIVE AGENT:                   KEYBANK NATIONAL ASSOCIATION

                                        By:  __________________________________

                                        Its: __________________________________

LENDERS:                                KEYBANK NATIONAL ASSOCIATION

                                        By:  __________________________________

                                        Its: __________________________________

                                        FLEET BANK

                                        By:  __________________________________

                                        Its: __________________________________

                                       18

<PAGE>

                                   Schedule 1
                                   Guarantors

Automotive Safety Components International, Inc.
ASCI Holdings Germany (DE), Inc.
ASCI Holdings Czech (DE), Inc.
ASCI Holdings Mexico (DE), Inc.
ASCI Holdings Asia (DE), Inc.
ASCI Holdings Poland (DE), Inc.
ASCI Holdings UK (DE), Inc.
Valentec Systems Inc.
Galion, Inc.
Valentec International Corporation, LLC
Safety Components Fabric Technologies, Inc.

<PAGE>

                                   Schedule 2
                                     Debtors

Safety Components International, Inc.
Safety Components Fabric Technologies, Inc.
Automotive Safety Components International, Inc.
ASCI Holdings UK (DE), Inc.
ASCI Holdings Mexico (DE), Inc.
ASCI Holdings Germany (DE), Inc.
ASCI Holdings Czech (DE), Inc.

<PAGE>

                                   Schedule 3
                                   Definitions

"Administrative Agent": as defined in the preamble hereto.

"Agreement": this Subordinated Secured Superpriority Debtor-in-Possession Credit
Agreement, including all Schedules hereto, as amended, supplemented or otherwise
modified from time to time.

"Appeal Period": as defined in Section 5.1(d).

"ASCL": as defined in the preamble hereto.

"Bankruptcy Code": as defined in Recital B.

"Borrowers": as defined in the preamble hereto.

"Carve-Out": as defined in Section 7.1(c).

"Chapter 11 Cases": as defined in Recital B.

"Claim Amount": as defined in Section 11.1.

"Closing Date": as defined in Section 5.1.

"Closing Date Repayment":  the permanent and indefeasible payment of $17,000,000
of the  Prepetition  Obligations  made by the  Obligors  to the  Lenders  on the
Closing  Date from the proceeds of the initial  borrowings  under the Senior DIP
Facility (to the extent such amount is not otherwise paid from funds held by the
Obligors on the Closing Date).

"Collateral":  as defined in the Prepetition Credit Documents; provided that the
Collateral  will  include  all  Collateral  acquired  by any  Obligor  after the
Petition  Date and all  additional  collateral  of each  Obligor  granted  to or
pledged  to or in favor of, or for the  benefit  of,  the  Administrative  Agent
and/or the Lenders to secure the Postpetition  Obligations.  Notwithstanding the
foregoing,  the Collateral will not include any avoidance  actions  available to
the bankruptcy  estates of the Debtors  pursuant to Sections 542, 544, 545, 547,
548, 549, 550, 551,  553(b) and/or 724(a) of the Bankruptcy Code or the proceeds
thereof.

"Consolidated EBITDA": as defined in Schedule 5.

"Consenting  Holders":  Noteholders  which are signatories to the  Restructuring
Agreement.

"Consenting   Holders  Termination  Event":  as  defined  in  the  Restructuring
Agreement.

<PAGE>

"Consummation  Date":  the  date  of  substantial  consummation  of  a  Plan  of
Reorganization  in the Chapter 11 Cases (which for  purposes  hereof will not be
later than the effective date of such Plan of Reorganization).

"Consummation Date Reduction Amount": as defined on Schedule 5.

"Court": as defined in Recital B.

"Creditors Committee": as defined in Section 9.2(b).

"Debtors": as defined in Recital B.

"Event of Default":  each "Event of Default"  under and as defined in the Senior
DIP Facility  Documents and each other event or occurrence  described in Section
10.1 hereof.

"Environmental Claim": as defined in the Prepetition Credit Agreement.

"Final Order": as defined in Section 5.1(d).

"Fleet": as defined in the preamble hereto.

"GmbH": as defined in the preamble hereto.

"Guaranteed Obligations": as defined in Section 10.1.

"Guarantors": as defined in the preamble hereto.

"Indemnities": as defined in Section 11.6.

"Intercreditor Agreement": the Intercreditor Subordination Agreement dated as of
April 7, 2000 by and between the Senior Agent and the Administrative Agent.

"Issuing Bank": KeyBank as issuer of the Prepetition Letters of Credit under the
Prepetition Credit Agreement.

"KeyBank": as defined in the preamble hereto.

"Lenders": as defined in the preamble hereto.

"Liens": as defined in the Prepetition Credit Agreement.

"Loan Amount": as defined in Section 2.1.

"Non-Surviving Letters of Credit": as defined in Section 3.1(b).

"Noteholders":  the holders  (including  investment  managers  or  advisors  for
certain  discretionary  accounts that are holders or  beneficial  owners) of the
Senior Notes.

"Obligors": the collective reference to the Borrowers and the Guarantors.

                                       2

<PAGE>

"Permitted Liens": as defined in the Senior DIP Facility Credit Agreement.

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

"Petition Date": as defined in Recital B.

"Plan of  Reorganization":  a confirmed plan of reorganization in the Chapter 11
Cases.

"Postpetition Obligations":  in each case, whether now in existence or hereafter
arising,  (a)  the  principal  of  and  interest  on the  Term  Loans,  (b)  the
obligations  of the Obligors to reimburse the Issuing Bank and/or the Lenders in
respect  of any draws  under the  Prepetition  Letters  of Credit  and all other
obligations of the Obligors in respect of the Prepetition Letters of Credit, and
(c) all  indebtedness,  liabilities,  obligations,  covenants  and duties of the
Obligors to the  Administrative  Agent and the Lenders of every kind, nature and
description  arising  under or in respect of this  Agreement  or the Term Notes,
whether direct or indirect,  absolute or contingent, due or not due, contractual
or tortious,  liquidated  or  unliquidated,  and whether or not evidenced by any
note, and whether or not for the payment of money,  including  expenses required
to be paid pursuant to Section 12.6.

"Prepetition Credit Agreement": as defined in Recital A.

"Prepetition Credit Documents":  collectively,  the Prepetition Credit Agreement
and the Security Documents.

"Prepetition Letters of Credit": as defined in Recital A.

"Prepetition Obligations": as defined in Recital A.

"Released Claims": as defined in Section 11.1(b).

"Required Lenders":  Lenders holding at least 51% of the principal amount of the
outstanding Term Loans.

"Required  Noteholder  Representatives":  Noteholders that  collectively hold in
excess of two thirds (66-2/3) in amount of the Senior Notes.

"Restructuring Agreement": the Restructuring Agreement dated as of April 6, 2000
by and among Safety  Components and its  subsidiaries  named therein,  Robert A.
Zummo and the Consenting Holders named therein in the form of Exhibit C hereto.

"Safety Components": as defined in the preamble hereto.

"Safety  Components   Termination   Event":  as  defined  in  the  Restructuring
Agreement.

                                       3

<PAGE>

"Security  Documents":  the  documents  listed on Schedule 7 hereto  pursuant to
which  the  Obligors  granted  certain  Liens  and  security  interests  to  the
Administrative  Agent for the  ratable  benefit  of the  Lenders  to secure  the
Prepetition Obligations.

"Senior Agent": as defined in Recital C.

"Senior DIP Facility": as defined in Recital C.

"Senior DIP Facility Borrowers": as defined in Recital C.

"Senior DIP Facility Credit Agreement": as defined in Recital C.

"Senior DIP Facility Documents": as defined in Recital C.

"Senior DIP Facility Guarantors": as defined in Recital C.

"Senior Exit Facility": as defined on Schedule 4.

"Senior Lenders": as defined in Recital C.

"Senior Notes":  Safety Components'  10-1/8% Senior Subordinated Notes due 2007,
Series B.

"Subordinated  DIP  Facility":  the  term  loan  facility  provided  under  this
Agreement.

"Subordinated DIP Facility Documents": collectively, this Agreement and the Term
Loan Notes.

"Subordinated Exit Facility Term Loans": as defined on Schedule 5.

"Superpriority Claim": as defined in Section 4.4.

"Surviving Letter of Credit": as defined in Section 3.1(a).

"Term Loans": as defined in Section 2.1.

"Term Loan Note": as defined in Section 2.4.

"Termination Date": as defined in Section 2.2.

"Uniform Commercial Code": the Uniform Commercial Code as in effect from time to
time in the  State  of New York or in any  other  state  the  laws of which  are
required by Section 9-103 thereof to be applied in connection  with the issue of
perfection of security interests.

                                       4

<PAGE>

                                   Schedule 4
                           Conditions to Exit Facility

Each  of the  following  conditions  must be  satisfied,  unless  waived  by the
Administrative  Agent and the Lenders:  (i) Safety Components shall have entered
into a senior  credit  facility  (the  "Senior  Exit  Facility")  providing  for
extensions of credit in an amount not less than the amount required to repay all
indebtedness  under the Senior DIP Facility and  otherwise in form and substance
reasonably  satisfactory  to the  Administrative  Agent and the  Lenders  in all
material  respects  customary  for  facilities  of this  type,  (ii) none of the
Obligors,  any creditor of any Obligor or any other party in interest shall have
(a) challenged the validity,  enforceability,  allowance, perfection or priority
of any of the claims and security interests of the Lenders under the Prepetition
Credit Documents or the Subordinated DIP Facility  Documents or the Closing Date
Repayment  (unless  such  challenge  has been  withdrawn  or  dismissed)  or (b)
otherwise  asserted any Released  Claim (unless such claim or assertion  thereof
has been  withdrawn  or  dismissed),  (iii) the absence of any Event of Default,
(iv) the Administrative Agent and the Lenders shall have received payment of all
accrued and unpaid interest,  fees and reasonable  expenses  (including  without
limitation,  reasonable  attorneys' and other  professionals' fees and expenses)
under the Subordinated DIP Facility Documents, including without limitation, all
accrued  interest  under Section 2.3, and (v) the Plan of  Reorganization  shall
provide for (a) the  conversion to equity of all  indebtedness  under the Senior
Notes as provided in the  Restructuring  Agreement,  (b) the complete release by
each Obligor,  each creditor of each Obligor and each other party in interest of
all  Released  Claims and all claims of any type or nature  that arise out of or
relate  to the  financial  accommodations  extended  by the  Lenders  under  the
Subordinated DIP Facility  Documents and (c) treatment of the Term Loans and the
Subordinated  Exit  Facility  Term  Loans  consistent  with  the  terms  of this
Agreement (including as specified on Schedule 5) and the Final Order.

<PAGE>

                                   Schedule 5
                 Subordinated Exit Facility Terms and Conditions

Subject to the  satisfaction of the terms and conditions set forth on Schedule 4
and the other terms and conditions set forth below,  the Lenders will agree that
the  Term  Loans  may  remain  outstanding  after  consummation  of  a  Plan  of
Reorganization  as  term  loans   ("Subordinated   Exit  Facility  Term  Loans")
subordinated  to the Senior Exit  Facility on  substantially  the same terms and
conditions as provided in this Agreement and the Intercreditor  Agreement,  with
the following modifications and additional terms:

Type and Amount:    Subordinated  Exit Facility Term Loans in a principal amount
                    equal to the principal amount of the Term Loans  outstanding
                    on the Consummation  Date less an amount equal to 50% of the
                    amount  by which the  availability  under  the  Senior  Exit
                    Facility on the Consummation  Date exceeds  $35,000,000 (the
                    "Consummation Date Reduction  Amount").  On the Consummation
                    Date,  the Term Loans  outstanding on such date will be paid
                    in an  amount  equal  to  the  Consummation  Date  Reduction
                    Amount.

Maturity Date:      The earlier of (i) the third anniversary of the Closing Date
                    of  the  Subordinated  DIP  Facility  and  (ii)  the  second
                    anniversary of the Consummation Date.

Interest:           Interest will be paid in cash on a monthly basis.

Prepayments:        At the end of each of Safety Component's fiscal quarters, to
                    the extent  Consolidated  EBITDA  exceeds  (i) for the first
                    full fiscal quarter after the Consummation Date,  $4,000,000
                    or (ii) for each fiscal quarter thereafter,  $3,750,000, the
                    Subordinated Exit Facility Term Loans shall be prepaid in an
                    amount equal to 65% of the amount in excess of $4,000,000 or
                    $3,750,000,  as  the  case  may  be.  For  purposes  hereof,
                    "Consolidated   EBITDA"   means   with   respect  to  Safety
                    Components on a consolidated basis with its subsidiaries for
                    any  period,  net income for such  period (a) plus,  without
                    duplication  and to the extent  deducted  in  computing  net
                    income for such period,  the sum of (i) income  taxes,  (ii)
                    interest  expense,   (iii)   depreciation  and  amortization
                    expense   and  (iv)  other   non-cash   charges   reasonably
                    acceptable to the  Administrative  Agent,  (b) minus, to the
                    extent included in net income for such period, extraordinary
                    gains (all such amounts to be determined in accordance  with
                    GAAP).

Collateral and
Subordination:      The Subordinated Exit Facility Term Loans will be secured by
                    the Collateral on  substantially  the same terms as provided
                    herein and such security  interests will be  subordinated to
                    the  security  interests  granted to secure the Senior  Exit
                    Facility on  substantially  the same terms and conditions as
                    provided in the  Intercreditor  Agreement.  In addition,  if
                    required  by the  terms of the  Senior  Exit  Facility,  the
                    security interest in any assets of the

<PAGE>

                    Obligors  securing the Subordinated Exit Facility Term Loans
                    which are not included in the  collateral for the Senior DIP
                    Facility will be subordinated to the security  interest,  if
                    any, in such assets  granted in favor of such  providers  of
                    the Senior Exit Facility on substantially the same terms and
                    conditions as provided in the  Intercreditor  Agreement with
                    respect to the other Collateral.

Conditions
Precedent:          Safety  Components  shall have  entered  into a Senior  Exit
                    Facility  satisfactory to the  Administrative  Agent and the
                    Lenders (i) satisfying the conditions  specified on Schedule
                    4, (ii) having  subordination  terms similar to those in the
                    Intercreditor  Agreement,   except  that  the  payments  and
                    prepayments described herein, including, without limitation,
                    interest,  costs,  expenses,  required  prepayments  and the
                    payment  in full of the  outstanding  Subordinated  Facility
                    Term Loans on the Maturity Date will be permitted whether or
                    not any  amounts  remain  outstanding  under the Senior Exit
                    Facility at the time of such payment,  and (iv) having other
                    terms and conditions customarily found in loan documents for
                    financings of this type. No Obligor shall be obligated  with
                    respect  to  any   indebtedness   which  is  senior  to  the
                    Subordinated   Exit  Facility  Term  Loans  other  than  the
                    indebtedness under the Senior Exit Facility.

Covenants:          The  covenants  incorporated  by  reference  herein from the
                    Senior DIP Facility Documents will be modified to conform to
                    those  contained  in the  documentation  for the Senior Exit
                    Facility,  subject to the Lenders'  reasonable  satisfaction
                    therewith.

Other Terms:        Such other  modifications to this Agreement,  and such other
                    terms and  conditions,  as may be appropriate for facilities
                    of this type.

                                       2

<PAGE>

                                   Schedule 6
                               Security Documents

1.   Mortgages:

     A.   Open End Mortgage,  Assignment of Leases and Security  Agreement  from
          Galion, Inc. to KeyBank, as Collateral Agent, dated as of May 21, 1997
          and recorded in Crawford County, Ohio at book 524, page 470.

     B.   Open End Mortgage,  Assignment of Leases and Security  Agreement  from
          Safety Components Fabric  Technologies,  Inc. ("SCFTI") to KeyBank, as
          Collateral  Agent,  dated as of July 15, 1997 and  recorded in the RMC
          Office for Greenville County,  South Carolina on July 31, 1997 at 2:23
          p.m. in Mortgage Book 2898 at Page 227.

2.   Security  Agreement  among  SCI,  the other  Assignors  named  therein  and
     KeyBank, dated as of May 21, 1997.

3.   Amendment No. 1 to Security Agreement, dated as of June 2, 1997.

4.   Amendment No. 2 to Security Agreement, dated as of July 15, 1997.

5.   Amendment No. 3 to Security Agreement, dated as of July 30, 1998.

6.   Amendment No. 4 to Security Agreement, dated as of February 9, 1999.

7.   Agreement of Creation of Security  Interest on  Receivables,  Inventory and
     Equipment  between  KeyBank and Phoenix  Airbag GmbH & Co., dated as of May
     21, 1997.

8.   Mortgage  between ASCI Holdings UK (DE), Inc. and KeyBank,  dated as of May
     21, 1997.  (Pledge by ASCI Holdings UK (DE), Inc. of the shares of stock of
     ASCI Ltd.)

9.   Pledge Agreement between SCI, the other Pledgors named therein and KeyBank,
     dated as of May 21, 1997.

10.  Amendment No. 1 to Pledge Agreement, dated as of June 2, 1997.

11.  Amendment No. 2 to Pledge Agreement, dated as of July 15, 1997.

12.  Amendment No. 3 to Pledge Agreement, dated as of July 30, 1998.

13.  Amendment No. 4 to Pledge Agreement, dated as of February 9, 1999.

<PAGE>

14.  Assignment of Life Insurance Policy by SCI to KeyBank,  dated as of May 21,
     1997.

15.  Collateral of Assignment  of Patents and Security  Agreement  between SCFTI
     and KeyBank, dated as of July 15, 1997.

16.  Collateral of Assignment of Trademarks and Security Agreement between SCFTI
     and KeyBank, dated as of July 15, 1997.

17.  Patent Assignments:

     A.   Assignment from Valentec International to KeyBank (09/303238)

     B.   Assignment from SCI to KeyBank (74/735020)

     C.   Assignment from SCI to KeyBank (08/787743, 08/656661, 08/683758)

     D.   Assignment from SCI to KeyBank (09/016097, 09/298085, 588176)

18.  Cash Collateral  Agreement  between KeyBank and McDonald  Investments Inc.,
     dated as of February 7, 2000.

19.  UCC-1  Financing  Statements with KeyBank  National  Association as Secured
     Party

                                       2

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