Document:

EXHIBIT 10.2

                               SERVICES AGREEMENT

     This Agreement, effective this 26th day of May, 2000, is entered into by
and between WCM Capital, Inc., a Delaware corporation ("Client"), having an
address at 76 Beaver Street, Suite 500, New York, NY 10005 and Joseph Laura,
Esq. ("Consultant"), having an address at c/o Laura & Matarrese, 707 Annandale
Road, Staten Island, New York 10312

     WHEREAS, Consultant has been consulting with and advising the Company with
respect to certain matters; and

     WHEREAS, Consultant has committed time and incurred significant expenses in
rendering services to the Company; and

     WHEREAS, Consultant and Client wish to formalize their agreement with
respect to the duties of Consultant and the compensation to be provided to
Consultant, in accordance with the terms and conditions hereinafter set forth.

     NOW THEREFORE, the parties agree as follows.

1. SERVICES. Client desires, and Consultant has provided and will continue to
provide services for WCM Capital, Inc. of the nature and type requested by
Client in the areas of Consultant's practice and expertise, during the term
described below (the "Services"). Upon the reasonable request of Client,
Consultant shall provide Client with future Services pursuant to the terms and
conditions of this Agreement. The Services of the Consultant shall include, but
not be limited to, providing general and specialized consulting and act as an
advisor to the Company with respect to certain joint venture and/or strategic
partners in the mining and milling or in the technology sector and any advisory
or other services incidental thereto.

2. INDEPENDENT CONTRACTOR. Individuals who perform Services for or on behalf of
Consultant to Client, shall be considered the agents, consultants, contractors
or employees of Consultant. The relationship between Consultant and Client is
solely one of independent contractor. Consultant is entitled to perform the
Services required herein through the use of his own personnel. Nothing herein
shall be construed or interpreted to deem the relationship between Client and
Consultant to be an employer/employee relationship. Consultant shall be
responsible for all contract obligations he may have with his personnel with any
fringe benefits to which they may be entitled by reason of being personnel of
Consultant. Consultant shall also be responsible for withholding payroll taxes
from the wages and salaries paid to his personnel and the payment of all payroll
taxes relating to their employment to government agencies and shall provide
workman's compensation insurance, unemployment insurance and any other insurance
required by statute.

                                       13

<PAGE>

3. CHARGES FOR SERVICES. In consideration for the Services previously rendered
and invoiced to Client on the date hereof in the aggregate amount of $ 614,760
by Consultant, Client agrees to issue to Consultant and Consultant agrees to
accept, in lieu of a cash payment, the sum of Two Hundred Thirty Three Thousand
Six Hundred Ninety (153,690) shares of the common stock of Client, which shall
be issued to Consultant immediately following execution hereof, free and clear
of all liens, encumbrances and restrictions as provided in Section 4 hereof. Any
future services of Consultant shall be billed to the Company at Consultant's
hourly rate of $500.00 per hour, plus expenses, on a quarterly basis.

4. S-8 REGISTRATION. Client agrees to file a registration statement on Form S-8
with the Securities & Exchange Commission, registering all shares payable
hereunder to Consultant. Said filling shall occur as soon as practical after the
shares have been issued to Consultant, and Consultant agrees to cooperate in
full with Client in making such filing.

5. INABILITY TO PERFORM. Consultant and Client shall not be required to perform
their respective obligations under this Agreement, or be liable for their
failure to perform for delay in performance of their obligations hereunder if
such performance is prevented, hindered, or delayed by reason of any cause
beyond the reasonable control of the other party, including, without limitation,
any labor dispute, personal illness or injury, act of God, or regulation or
order of any government authority. If performance is not possible for thirty
(30) consecutive days, either party can terminate and the verifiable fees and
costs owed Consultant by Client shall become a lien against the assets of
Client.

6. TERM AND TERMINATION. This Agreement shall be effective upon the date first
written above and shall continue in effect for six (6) months thereafter unless
otherwise extended or until terminated by either party upon giving the other
party not less than thirty (30) days prior written notice of termination;
provided, however, Services being provided at the time of termination shall
continue pursuant to the terms of this Agreement until completed. This Agreement
may be terminated by either party in the event of the refusal or inability of
the other party to perform hereunder as provided in Section 5, or in the event
of the breach of any obligation under this Agreement by the other party. Such
termination upon breach shall be made by written notice to the other party and
shall become effective ten (10) days after delivery of such notice, provided the
defaulting party has not cured any such default to the satisfaction of the other
party within said ten (10) day period.

7.   MISCELLANEOUS.

(a) Unless otherwise stated, all notices, demands, payments and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been given on the date delivery is acknowledged, and
shall be made only by recognized

                                       14

<PAGE>

courier service, or by U.S. Mail, registered or certified, postage, prepaid,
return receipt requested, to the address of each party set forth in the heading
of the agreement, or to such other address as either party may substitute by
written notice to the other party.

(b) This Agreement shall be binding on, and inure to the benefit of, the parties
hereto and heir respective heirs, legal representatives, successors or assigns.
Neither party shall assign its obligations hereunder without the express written
consent of the other party.

(c) The captions used in this Agreement are for purposes of identification only
and are not to be used to construe any of the terms of the Agreement.

(d) This Agreement may be executed as a single document bearing all necessary
signatures or may be executed simultaneously in two (2) or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.

(e) This Agreement constitutes the entire Agreement and understanding between
the parties hereto and integrates all prior negotiations, discussions and
agreements between them. No modifications of the terms of this Agreement shall
be valid unless in writing and signed by an authorized representative of each
party hereto (or their successors).

(f) If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provision shall not in any way be affected or impaired thereby.

(g) This Agreement shall be governed by and interpreted under the laws of the
State of New York..

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on
the day and year first above written.

CLIENT:                                             CONSULTANT:

WCM Capital Inc.                                    Joseph Laura

By:  /s/  Robert Waligunda                          /s/  Joseph Laura
     -------------------------                      -----------------------
Its: President

                                       15<PAGE>   1

                                                                     EXHIBIT 4.1
<PAGE>   2
                                                          EXECUTION COPY

                    POOLING AND SERVICING AGREEMENT

                              Relating to

                   ADVANTA MORTGAGE LOAN TRUST 2000-1

                                 Among

                   ADVANTA CONDUIT RECEIVABLES, INC.,
                              as Sponsor,

                      ADVANTA MORTGAGE CORP. USA,
                          as Master Servicer,

                                  and

               BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
                               as Trustee

                        Dated as of May 1, 2000
<PAGE>   3
                           TABLE OF CONTENTS
                     (Not a Part of this Agreement)

<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
<S>                                                                               <C>
Parties .....................................................................        1

Recitals ....................................................................        1

ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION ................................        1

SECTION 1.01 Definitions ....................................................        1
SECTION 1.02 Use of Words and Phrases .......................................       36
SECTION 1.03 Captions; Table of Contents ....................................       37
SECTION 1.04 Opinions .......................................................       37

ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST ......................       37

SECTION 2.01 Establishment of the Trust .....................................       37
SECTION 2.02 Office .........................................................       37
SECTION 2.03 Purposes and Powers ............................................       37
SECTION 2.04 Appointment of the Trustee;  Declaration of Trust ..............       37
SECTION 2.05 Expenses of the Trust ..........................................       38
SECTION 2.06 Ownership of the Trust .........................................       38
SECTION 2.07 Situs of the Trust .............................................       38
SECTION 2.08 Miscellaneous REMIC Provisions .................................       38

ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPONSOR AND THE
            MASTER SERVICER; COVENANT OF SPONSOR TO CONVEY MORTGAGE LOANS ...       42

SECTION 3.01 Representations and Warranties of the Sponsor ..................       42
SECTION 3.02 Representations and Warranties of the Master Servicer ..........       44
SECTION 3.03 Representations and Warranties of the Sponsor with
             Respect to the Mortgage Loans ..................................       47
SECTION 3.04 Covenants of Sponsor to Take Certain Actions with
             Respect to the Mortgage Loans in Certain Situations ............       48
SECTION 3.05 Conveyance of the Mortgage Loans ...............................       51
SECTION 3.06 Acceptance by Trustee; Certain Substitutions of Mortgage
             Loans; Certification by Trustee ................................       54
SECTION 3.07 Cooperation Procedures .........................................       56
SECTION 3.08 Conveyance of the Subsequent Mortgage Loans ....................       56

ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES ................................       60

SECTION 4.01 Issuance of Certificates .......................................       60
SECTION 4.02 Sale of Certificates ...........................................       60

ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS ............................       61

SECTION 5.01 Terms ..........................................................       61
SECTION 5.02 Forms ..........................................................       61
SECTION 5.03 Execution, Authentication and Delivery .........................       61
</TABLE>

                                       i
<PAGE>   4
<TABLE>
<S>                                                                                 <C>
SECTION 5.04 Registration and Transfer of Certificates ...........................   62
SECTION 5.05 Mutilated, Destroyed, Lost or Stolen Certificates ...................   64
SECTION 5.06 Persons Deemed Owners ...............................................   65
SECTION 5.07 Cancellation ........................................................   65
SECTION 5.08 Limitation on Transfer of Ownership Rights ..........................   65
SECTION 5.09 Assignment of Rights ................................................   66

ARTICLE VI COVENANTS .............................................................   66

SECTION 6.01 Distributions .......................................................   66
SECTION 6.02 Money for Distributions to be Held in Trust; Withholding ............   66
SECTION 6.03 Protection of Trust Estate ..........................................   67
SECTION 6.04 Performance of Obligations ..........................................   68
SECTION 6.05 Negative Covenants ..................................................   68
SECTION 6.06 No Other Powers .....................................................   69
SECTION 6.07 Limitation of Suits .................................................   69
SECTION 6.08 Unconditional Rights of Owners to Receive Distributions .............   70
SECTION 6.09 Rights and Remedies Cumulative ......................................   70
SECTION 6.10 Delay or Omission Not Waiver ........................................   70
SECTION 6.11 Control by Owners ...................................................   70

ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES .................................   71

SECTION 7.01 Collection of Money .................................................   71
SECTION 7.02 Establishment of Accounts ...........................................   71
SECTION 7.03 The Certificate Insurance Policy ....................................   71
SECTION 7.04 Pre-Funding Account and Capitalized Interest Account ................   73
SECTION 7.05 Flow of Funds .......................................................   74
SECTION 7.06 Investment of Accounts ..............................................   78
SECTION 7.07 Eligible Investments ................................................   79
SECTION 7.08 Reports by Trustee ..................................................   80
SECTION 7.09 Additional Reports by Trustee .......................................   83
SECTION 7.10 Supplemental Interest Payment Account and Supplemental Interest
             Payments ............................................................   84

ARTICLE VIII SERVICING AND ADMINISTRATION OF MORTGAGE LOANS ......................   85

SECTION 8.01 Master Servicer and Sub-Servicers ...................................   85
SECTION 8.02 Collection of Certain Mortgage Loan Payments ........................   87
SECTION 8.03 Sub-Servicing Agreements Between Master Servicer and Sub-Servicers ..   87
SECTION 8.04 Successor Sub-Servicers .............................................   88
SECTION 8.05 Liability of Master Servicer ........................................   88
SECTION 8.06 No Contractual Relationship Between Sub-Servicer and Trustee or
             the Owners...........................................................   88
SECTION 8.07 Assumption or Termination of Sub-Servicing Agreement by Trustee .....   88
SECTION 8.08 Principal and Interest Account ......................................   89
</TABLE>

                                       ii
<PAGE>   5
<TABLE>
<S>                                                                         <C>
SECTION 8.09 Delinquency Advances, Compensating Interest
             and Servicing Advances ..................................        91
SECTION 8.10 Purchase of Mortgage Loans ..............................        92
SECTION 8.11 Maintenance of Insurance ................................        93
SECTION 8.12 Due-on-Sale Clauses; Assumption and
             Substitution Agreements .................................        94
SECTION 8.13 Realization Upon Defaulted Mortgage Loans ...............        95
SECTION 8.14 Trustee to Cooperate; Release of Mortgage Files .........        96
SECTION 8.15 Servicing Compensation ..................................        97
SECTION 8.16 Annual Statement as to Compliance .......................        97
SECTION 8.17 Annual Independent Certified Public
             Accountants' Reports ....................................        98
SECTION 8.18 Access to Certain Documentation and
             Information Regarding the Mortgage Loans ................        98
SECTION 8.19 Assignment of Agreement .................................        98
SECTION 8.20 Removal of Master Servicer; Resignation
             of Master Servicer ......................................        98
SECTION 8.21 Inspections by the Certificate Insurer
             and the Trustee; Errors and Omissions Insurance .........       103
SECTION 8.22 Merger, Conversion, Consolidation or
             Succession to Business of Master Servicer ...............       103
SECTION 8.23 Notices of Material Events ..............................       103

ARTICLE IX TERMINATION OF TRUST ......................................       104

SECTION 9.01 Termination of Trust ....................................       104
SECTION 9.02 Clean-Up Call Termination ...............................       105
SECTION 9.03 Termination Upon Loss of REMIC Status ...................       106
SECTION 9.04 Disposition of Proceeds .................................       107
SECTION 9.05 Netting of Amounts ......................................       107

ARTICLE X THE TRUSTEE ................................................       108

SECTION 10.01 Certain Duties and Responsibilities .....................      108
SECTION 10.02 Removal of Trustee for Cause ............................      109
SECTION 10.03 Certain Rights of the Trustee ...........................      110
SECTION 10.04 Not Responsible for Recitals or Issuance
              of Certificates .........................................      111
SECTION 10.05 May Hold Certificates ...................................      111
SECTION 10.06 Money Held in Trust .....................................      112
SECTION 10.07 No Lien for Fees ........................................      112
SECTION 10.08 Corporate Trustee Required; Eligibility .................      112
SECTION 10.09 Resignation and Removal; Appointment of Successor .......      112
SECTION 10.10 Acceptance of Appointment by Successor Trustee ..........      114
SECTION 10.11 Merger, Conversion, Consolidation or
              Succession to Business of the Trustee ...................      114
SECTION 10.12 Reporting; Withholding ..................................      115
SECTION 10.13 Liability of the Trustee ................................      115
SECTION 10.14 Appointment of Co-Trustee or Separate Trustee ...........      115
</TABLE>

                                      iii
<PAGE>   6
<TABLE>
<S>                                                                         <C>
ARTICLE XI MISCELLANEOUS .............................................       117

SECTION 11.01 Compliance Certificates and Opinions ...................       117
SECTION 11.02 Form of Documents Delivered to the Trustee .............       117
SECTION 11.03 Acts of Owners .........................................       118
SECTION 11.04 Notices, etc., to Trustee ..............................       118
SECTION 11.05 Notices and Reports to Owners; Waiver of Notices .......       119
SECTION 11.06 Rules by Trustee and Sponsor ...........................       119
SECTION 11.07 Successors and Assigns .................................       119
SECTION 11.08 Severability ...........................................       119
SECTION 11.09 Benefits of Agreement ..................................       119
SECTION 11.10 Legal Holidays .........................................       120
SECTION 11.11 Governing Law ..........................................       120
SECTION 11.12 Counterparts ...........................................       120
SECTION 11.13 Usury ..................................................       120
SECTION 11.14 Amendment ..............................................       120
SECTION 11.15 REMIC Status; Taxes ....................................       122
SECTION 11.16 Additional Limitation on Action and Imposition of Tax ..       123
SECTION 11.17 Appointment of Tax Matters Person ......................       125
SECTION 11.18 The Certificate Insurer ................................       125
SECTION 11.19 Maintenance of Records .................................       125
SECTION 11.20 Notices ................................................       125
</TABLE>

SCHEDULES AND EXHIBITS

SCHEDULE I -- Schedule of Mortgage Loans

EXHIBIT A -- Forms of Class A Certificates

EXHIBIT B -- Forms of Class B, Class BS, Class R-I, Class R-II and Supplemental
             Interest Right Certificates

EXHIBIT C -- Form of Notice of Establishment of Principal and Interest Account

EXHIBIT D -- Form of Trustee's Acknowledgement of Receipt

EXHIBIT E -- Form of Certification

EXHIBIT F -- Form of Delivery Order

EXHIBIT G -- Form of Class R-I and Class R-II Tax Matters Transfer Certificate

EXHIBIT H -- Power of Attorney

EXHIBIT I -- Form of Monthly Report

EXHIBIT J -- Form of Master Servicer's Trust Receipt

EXHIBIT K -- Form of Subsequent Transfer Agreement

EXHIBIT L -- Form of Lost Note Affidavit

                                       iv
<PAGE>   7
            POOLING AND SERVICING AGREEMENT, relating to ADVANTA MORTGAGE LOAN
TRUST 2000-1, dated as of May 1, 2000, by and among ADVANTA CONDUIT RECEIVABLES,
INC., a Nevada corporation, in its capacity as sponsor of the trust created
pursuant to this Agreement (the "Sponsor"), ADVANTA MORTGAGE CORP. USA, a
Delaware corporation, in its capacity as master servicer (the "Master
Servicer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association, in its capacity as trustee (the "Trustee").

                              W I T N E S S E T H :

            WHEREAS, the Sponsor wishes to establish a trust, and to provide for
the allocation and sale of the beneficial interests therein and the maintenance
and distribution of the trust estate;

            WHEREAS, the Master Servicer has agreed to service the Mortgage
Loans, which constitute the principal assets of the trust estate;

            WHEREAS, all things necessary to make the Certificates (as defined
herein), when executed and authenticated by the Trustee, valid instruments, and
to make this Agreement a valid agreement, in accordance with their and its
terms, have been done;

            WHEREAS, Bankers Trust Company of California, N.A. is willing to
serve in the capacity of Trustee hereunder; and

            WHEREAS, Ambac Assurance Corporation (the "Certificate Insurer") is
intended to be a third-party beneficiary of this Agreement and is hereby
recognized by the parties hereto to be a third-party beneficiary of this
Agreement.

            NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Sponsor, the Master Servicer and the Trustee
hereby agree as follows:

                                    ARTICLE I

                       DEFINITIONS; RULES OF CONSTRUCTION

            SECTION 1.01 Definitions. For all purposes of this Agreement, the
following terms shall have the meanings set forth below, unless the context
clearly indicates otherwise:

            "Accepted Servicing Practices": The Master Servicer's normal
servicing practices in servicing and administering mortgage loans for its own
account, which in general will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service for their own account
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Properties are located.

<PAGE>   8
            "Account": Any account established in accordance with Sections 7.02,
7.04, 7.10 or 8.08 hereof, each of which shall be established at a Designated
Depository Institution.

            "Accrual Period": On any Payment Date, (x) with respect to the Group
I Certificates (other than the Class A-1 Certificates), the immediately
preceding calendar month and (y) with respect to the Class A-1 Certificates and
the Group II Certificates, the period commencing on the immediately preceding
Payment Date (or the Startup Day in the case of the first Payment Date) to and
including the day prior to the current Payment Date. Calculations of interest on
the Group I Certificates (other than the Class A-1 Certificates) will be made on
the basis of a 360-day year consisting of twelve thirty-day months and
calculations of interest on the Class A-1 Certificates and the Group II
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period in a year of 360 days.

            "Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust pursuant to Section 3.08(b) of this Agreement,
notice, which shall be given not later than two (2) Business Days prior to the
related Subsequent Transfer Date, of the Sponsor's designation of Subsequent
Mortgage Loans to be sold to the Trust, such notice shall include the
approximate aggregate Loan Balance and the approximate weighted average Coupon
Rate of such Subsequent Mortgage Loans, and whether such Subsequent Mortgage
Loans are designated for assignment to Group I or to Group II.

            "Aggregate Certificate Principal Balance": As of any date of
determination thereof, the sum of the outstanding Certificate Principal Balance
of the Class A Certificates.

            "Agreement": This Pooling and Servicing Agreement, as it may be
amended from time to time, and including the Exhibits hereto.

            "AMHC": Advanta Mortgage Holding Company, a Delaware corporation and
the corporate parent of Advanta Mortgage Corp. USA, and the indirect corporate
parent of Advanta Conduit Receivables, Inc.

            "Appraised Value": The appraised value of any Property based upon
the appraisal or other valuation made at the time of the origination of the
related Mortgage Loan, or, in the case of a Mortgage Loan which is a purchase
money mortgage purchased within the immediately preceding twelve month period,
the sales price of the Property at such time of origination, if such sales price
is less than such appraised value.

            "ARM Group Available Funds Cap Rate": As of any Payment Date, an
amount, expressed as a per annum rate, and calculated on the basis of a 360-day
year and the actual number of days elapsed in the related Accrual Period for the
Group II Certificates, equal to (a) the sum of (i) the aggregate amount of
interest accrued and collected (or advanced) at the Coupon Rates on all of the
Mortgage Loans in the Group II Pool for the related Remittance Period net of
Civil Relief Act Shortfalls minus (ii) the aggregate of the Servicing Fee, the
Premium Amount and the Trustee's Fee, in each case

                                       2
<PAGE>   9
relating to the Group II Pool, on such Payment Date and minus (iii) commencing
on the seventh Payment Date following the Startup Day, an amount equal to 0.75%
per annum times the aggregate principal balance of the Mortgage Loans in Group
II as of the beginning of such related Remittance Period, divided by (b) the
aggregate principal balance of the Mortgage Loans in Group II as of the
beginning of the related Remittance Period.

            "Authorized Officer": (A) With respect to any Person, any person who
is authorized to act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person and (B) with respect to the Trustee,
the Sponsor and the Master Servicer, those individuals whose names appear on the
lists of Authorized Officers delivered on the Startup Day, which lists may be
amended or supplemented from time to time.

            "Available Funds": The Group I Available Funds or Group II Available
Funds, as applicable.

            "Available Funds Cap Rate": The Fixed Rate Group Available Funds Cap
Rate or the ARM Group Available Funds Cap Rate, as applicable.

            "Balance Ratio": As defined in Section 2.08(b) hereof.

            "Balloon Loan": Any Mortgage Loan which has an amortization schedule
which extends beyond its maturity date, resulting in a relatively large
unamortized principal balance due in a single payment at maturity.

            "Base Principal Distribution Amount": The Group I Base Principal
Distribution Amount or the Group II Base Principal Distribution Amount, as
applicable.

            "Benefit Plan Entity": As defined in Section 5.08(c) hereof.

            "Business Day": Any day that is not a Saturday, Sunday or other day
on which the Certificate Insurer, the Master Servicer, the Sponsor or the
Trustee is closed or commercial banking institutions in the States of New York,
Delaware or California are authorized or obligated by law or executive order to
be closed.

            "Capitalized Interest Account": The capitalized interest account
established in accordance with Section 7.02 hereof and maintained by the
Trustee.

            "Certificate": Any one of the Class A Certificates, the Class B
Certificates, the Class BS Certificates, the Class R-I Certificates and the
Class R-II Certificates, each representing the interests and the rights
described in this Agreement.

            "Certificate Account": The certificate account established in
accordance with Section 7.02 hereof and maintained by the Trustee.

                                       3
<PAGE>   10
            "Certificate Insurance Policy": The Certificate Guaranty Insurance
Policy No. AB0363BE dated May 24, 2000 issued by the Certificate Insurer to the
Trustee for the benefit of the Owners of the Class A Certificates.

            "Certificate Insurer": Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance corporation, or any successor thereto.

            "Certificate Insurer Default": Any one of the following events shall
have occurred and be continuing:

            (a) the Certificate Insurer shall have failed to make a payment
      required under the Certificate Insurance Policy;

            (b) the Certificate Insurer shall have (i) filed a petition or
      commenced any case or proceeding under any provision or chapter of the
      United States Bankruptcy Code or any other similar Federal or state law
      relating to insolvency, bankruptcy, rehabilitation, liquidation or
      reorganization, (ii) made a general assignment for the benefit of its
      creditors, or (iii) had an order for relief entered against it under the
      United States Bankruptcy Code or any other similar Federal or state law
      relating to insolvency, bankruptcy, rehabilitation, liquidation or
      reorganization which is final and nonappealable; or

            (c) a court of competent jurisdiction, the New York Department of
      Insurance, or other competent regulatory authority shall have entered a
      final and nonappealable order, judgment or decree (i) appointing a
      custodian, trustee, agent or receiver for the Certificate Insurer or for
      all or any material portion of its property or (ii) authorizing the taking
      of possession by a custodian, trustee, agent or receiver of the
      Certificate Insurer (or the taking of possession of all or any material
      portion of the property of the Certificate Insurer).

            "Certificate Principal Balance": With respect to any Class A
Certificate as of any date of determination, the Original Certificate Principal
Balance therefor less any principal amounts actually distributed on such Class A
Certificates pursuant to Section 7.05(d) hereof on all prior Payment Dates;
provided, however, that solely for the purposes of determining the Certificate
Insurer's rights, as subrogee, the Certificate Principal Balance of the Class A
Certificates shall not be reduced by any principal amounts paid to the Owners
thereof from Insured Payments. The Class B Certificates, the Class BS
Certificates, the Class R-I Certificates, the Class R-II Certificates and each
Supplemental Interest Right do not have a Certificate Principal Balance.

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

            "Civil Relief Act Shortfalls": Interest shortfalls resulting from
the application of the Civil Relief Act.

            "Class": Any Class of the Class A Certificates, the Class B
Certificates, the Class BS Certificates, the Class R-I Certificates or the Class
R-II Certificates.

                                       4
<PAGE>   11
            "Class A Certificate": Any one of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates,
the Class A-5 Certificates, the Class A-6 Certificates or the Class A-7
Certificates.

            "Class A Current Interest": With respect to any Payment Date, the
Class A-1 Current Interest, the Class A-2 Current Interest, the Class A-3
Current Interest, the Class A-4 Current Interest, the Class A-5 Current
Interest, the Class A-6 Current Interest or the Class A-7 Current Interest, as
applicable.

            "Class A Distribution Amount": The sum of the Class A-1 Distribution
Amount, the Class A-2 Distribution Amount, the Class A-3 Distribution Amount,
the Class A-4 Distribution Amount, the Class A-5 Distribution Amount, the Class
A-6 Distribution Amount and the Class A-7 Distribution Amount.

            "Class A Interest Carry Forward Amount": With respect to any Payment
Date, the Class A-1 Interest Carry Forward Amount, the Class A-2 Interest Carry
Forward Amount, the Class A-3 Interest Carry Forward Amount, the Class A-4
Interest Carry Forward Amount, the Class A-5 Interest Carry Forward Amount, the
Class A-6 Interest Carry Forward Amount or the Class A-7 Interest Carry Forward
Amount, as applicable.

            "Class A Principal Distribution Amount": With respect to any Payment
Date, 100% of the Group I Principal Distribution Amount or the Group II
Principal Distribution Amount, as applicable.

            "Class A-1 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-1 Certificate, substantially in the form annexed
hereto as Exhibit A-1, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-1 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-1
Certificates less any principal amounts actually distributed with respect to the
Class A-1 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-1 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-1 Certificate Principal Balance during
the related Accrual Period at the Class A-1 Pass-Through Rate.

            "Class A-1 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-1 Current Interest, (y) the Class A-1 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-1 Certificates pursuant to Section 7.05(d)(i)
hereof.

            "Class A-1 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-1 Current Interest as of the immediately preceding Payment Date and (B)
any

                                       5
<PAGE>   12
unpaid Class A-1 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-1 Certificates on the immediately
preceding Payment Date and (y) interest on such amount at the Class A-1
Pass-Through Rate calculated on the basis of the actual number of days in the
related Accrual Period and a year of 360 days.

            "Class A-1 Pass-Through Rate": With respect to any Payment Date, the
Class A-1 Pass-Through Rate will be equal to the lesser of (x) LIBOR plus 0.10%
per annum and (y) the Fixed Rate Group Available Funds Cap Rate for such Payment
Date.

            "Class A-2 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-2 Certificate, substantially in the form annexed
hereto as Exhibit A-2, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-2 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-2
Certificates less any principal amounts actually distributed with respect to the
Class A-2 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-2 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-2 Certificate Principal Balance during
the related Accrual Period at the Class A-2 Pass-Through Rate.

            "Class A-2 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-2 Current Interest, (y) the Class A-2 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-2 Certificates pursuant to Section 7.05(d)(i)
hereof.

            "Class A-2 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-2 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-2 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-2 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-2
Pass-Through Rate.

            "Class A-2 Pass-Through Rate": With respect to any Payment Date, the
Class A-2 Pass-Through Rate will be equal to 8.16% per annum.

            "Class A-3 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-3 Certificate, substantially in the form annexed
hereto as Exhibit A-3, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

                                       6
<PAGE>   13
            "Class A-3 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-3
Certificates less any principal amounts actually distributed with respect to the
Class A-3 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-3 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-3 Certificate Principal Balance during
the related Accrual Period at the Class A-3 Pass-Through Rate.

            "Class A-3 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-3 Current Interest, (y) the Class A-3 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-3 Certificates pursuant to Section 7.05(d)(i)
hereof.

            "Class A-3 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-3 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-3 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-3 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-3
Pass-Through Rate.

            "Class A-3 Pass-Through Rate": With respect to any Payment Date, the
Class A-3 Pass-Through Rate will be equal to 8.37% per annum.

            "Class A-4 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-4 Certificate, substantially in the form annexed
hereto as Exhibit A-4, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-4 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-4
Certificates less any principal amounts actually distributed with respect to the
Class A-4 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-4 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-4 Certificate Principal Balance during
the related Accrual Period at the Class A-4 Pass-Through Rate.

            "Class A-4 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-4 Current Interest, (y) the Class A-4 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-4 Certificates pursuant to Section 7.05(d)(i)
hereof.

            "Class A-4 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the

                                       7
<PAGE>   14
Class A-4 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-4 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-4 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-4
Pass-Through Rate.

            "Class A-4 Pass-Through Rate": The Class A-4 Pass-Through Rate will
be equal to (x) with respect to any Payment Date which occurs on or prior to the
Step-Up Payment Date, 8.61% per annum, or (y) with respect to any Payment Date
thereafter, 9.36% per annum.

            "Class A-5 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-5 Certificate, substantially in the form annexed
hereto as Exhibit A-5, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-5 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-5
Certificates less any principal amounts actually distributed with respect to the
Class A-5 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-5 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-5 Certificate Principal Balance during
the related Accrual Period at the Class A-5 Pass-Through Rate.

            "Class A-5 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-5 Current Interest, (y) the Class A-5 Interest Carry
Forward Amount, if any, and (z) the Group I Principal Distribution Amount
payable to the Owners of Class A-5 Certificates pursuant to Section 7.05(d)(i)
hereof.

            "Class A-5 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-5 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-5 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-5 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-5
Pass-Through Rate.

            "Class A-5 Pass-Through Rate": The Class A-5 Pass-Through Rate will
be equal to the lesser of (x)(i) with respect to any Payment Date which occurs
on or prior to the Step-Up Payment Date, 8.90% per annum, or (ii) with respect
to any Payment Date thereafter, 9.65% per annum and (y) the Fixed Rate Group
Available Funds Cap Rate for such Payment Date.

                                       8
<PAGE>   15
            "Class A-6 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-6 Certificate, substantially in the form annexed
hereto as Exhibit A-6, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-6 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-6
Certificates less any principal amounts actually distributed with respect to the
Class A-6 Certificates pursuant to Section 7.05(d)(i) hereof on all prior
Payment Dates.

            "Class A-6 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-6 Certificate Principal Balance during
the related Accrual Period at the Class A-6 Pass-Through Rate.

            "Class A-6 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-6 Current Interest, (y) the Class A-6 Interest Carry
Forward Amount, if any, and (z) Class A-6 Principal Distribution Amount payable
to the Owners of the Class A-6 Certificates pursuant to Section 7.05(c)(i)
hereof.

            "Class A-6 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-6 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-6 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest made to the Owners of the Class A-6 Certificates on such immediately
preceding Payment Date and (y) 30 days' interest on such amount at the Class A-6
Pass-Through Rate.

            "Class A-6 Pass-Through Rate": The Class A-6 Pass-Through Rate will
be equal to the lesser of (x) (i) with respect to any Payment Date which occurs
on or prior to the Step-Up Payment Date, 8.30% per annum or (ii) with respect to
any Payment Date thereafter, 9.05% per annum and (y) the Fixed Rate Group
Available Funds Cap Rate for such Payment Date.

            "Class A-6 Principal Distribution Amount": With respect to any
Payment Date will be the "applicable percentage" set forth below of the Class
A-6 Pro Rata Principal Distribution Amount:

                                       9
<PAGE>   16
<TABLE>
                                                            APPLICABLE
                    PERIOD                                  PERCENTAGE
                    ------                                  ----------
<S>                                                         <C>
          June 2000 - May 2003                                  0.00%
          June 2003 - May 2005                                 45.00%
          June 2005 - May 2006                                 80.00%
          June 2006 - May 2007                                100.00%
          June 2007 - and thereafter                          300.00%
</TABLE>

            "Class A-6 Pro Rata Principal Distribution Amount": With respect to
any Payment Date, an amount equal to the product of (x) the Group I Principal
Distribution Amount for such Payment Date and (y) a fraction, the numerator of
which is the Class A-6 Certificate Principal Balance immediately prior to such
Payment Date and the denominator of which is the aggregate Certificate Principal
Balance of the Group I Certificates immediately prior to such Payment Date.

            "Class A-7 Certificate": Any one of the Certificates designated on
the face thereof as a Class A-7 Certificate, substantially in the form annexed
hereto as Exhibit A-7, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing a Regular Interest
in the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class A-7 Certificate Principal Balance": As of any date of
determination, the Original Certificate Principal Balance of all Class A-7
Certificates less any principal amounts actually distributed with respect to the
Class A-7 Certificates pursuant to Section 7.05(d)(ii) hereof on all prior
Payment Dates.

            "Class A-7 Current Interest": With respect to any Payment Date, the
amount of interest accrued on the Class A-7 Certificate Principal Balance during
the related Accrual Period at the Class A-7 Pass-Through Rate.

            "Class A-7 Distribution Amount": With respect to any Payment Date,
the sum of (x) the Class A-7 Current Interest, (y) the Class A-7 Interest Carry
Forward Amount, if any, and (z) the Group II Principal Distribution Amount
payable to the Owners of Class A-7 Certificates pursuant to Section 7.05(d)(ii)
hereof.

            "Class A-7 Interest Carry Forward Amount": With respect to any
Payment Date, the sum of (x) the amount, if any, by which (i) the sum of (A) the
Class A-7 Current Interest as of the immediately preceding Payment Date and (B)
any unpaid Class A-7 Interest Carry Forward Amount, as calculated up through the
previous Payment Date and outstanding on such immediately preceding Payment
Date, exceeds (ii) the amount of the actual distribution with respect to
interest, including the payment of any related Supplemental Interest Amount,
made to the Owners of the Class A-7 Certificates on such immediately preceding
Payment Date and (y) interest on such amount at the Class A-7 Pass-Through Rate
calculated on the basis of the actual number of days in the related Accrual
Period and a year of 360 days.

                                       10
<PAGE>   17
            "Class A-7 Pass-Through Rate": The Class A-7 Pass-Through Rate will
be equal to the lesser of (x)(i) with respect to any Payment Date which occurs
on or prior to the Step-Up Payment Date, LIBOR plus 0.23% per annum or (ii) with
respect to any Payment Date thereafter, LIBOR plus 0.46% per annum and (y) the
ARM Group Available Funds Cap Rate for such Payment Date.

            "Class B Certificate": Any one of the Certificates designated on the
face thereof as a Class B Certificate, substantially in the form annexed hereto
as Exhibit B-1, authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and evidencing a Regular Interest in
the Upper-Tier REMIC for purposes of the REMIC Provisions.

            "Class B Distribution Amount": With respect to any Payment Date, the
amount payable to the Owners of the Class B Certificates pursuant to footnotes 4
and 5 of Section 2.08(b) hereof.

            "Class B Pass-Through Rate": With respect to any Payment Date, the
interest payable at the Group I Net Weighted Average Coupon Rate and the Group
II Net Weighted Average Coupon Rate on the Group I and Group II Mortgage Loans
in excess of the interest payable on the Class A Certificates, expressed as a
per annum rate on the aggregate Loan Balance of the Mortgage Loans in Group I
and Group II, respectively.

            "Class BS Certificate": Any one of the Certificates designated on
the face thereof as a Class BS Certificate, substantially in the form annexed
hereto as Exhibit B-3, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein.

            "Class R-I Certificate": Any one of the Certificates designated on
the face thereof as a Class R-I Certificate, substantially in the form annexed
hereto as Exhibit B-5, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein, and evidencing an interest
designated as the "residual interest" in the Lower-Tier REMIC for the purposes
of the REMIC Provisions.

            "Class R-II Certificate": Any one of the Certificates designated on
the face thereof as a Class R-II Certificate, substantially in the form annexed
hereto as Exhibit B-6, authenticated and delivered by the Trustee, representing
the right to receive distributions as set forth herein, and evidencing an
interest designated as the "residual interest" in the Upper-Tier REMIC for the
purposes of the REMIC Provisions.

            "Clean-Up Call Date": The Payment Date on which the Redeeming Party
elects to exercise its right to purchase all of the Mortgage Loans pursuant to
Section 9.02 hereof.

            "Clearstream": Clearstream Banking, societe anonyme.

            "Code": The Internal Revenue Code of 1986, as amended and any
successor statute.

                                       11
<PAGE>   18
            "Combined Loan-to-Value Ratio": (A) With respect to any First
Mortgage Loan, the percentage equal to the Original Principal Amount of the
related Note divided by the Appraised Value of the related Property and (B) with
respect to any Junior Mortgage Loan, the percentage equal to the sum of (i) the
remaining principal balance of the Senior Lien note(s), as of the date of
origination of the Junior Mortgage Loan, as appropriate, and (ii) the Original
Principal Amount of the Note of such Junior Mortgage Loan, as appropriate,
divided by the Appraised Value of the related Property.

            "Commitment": The Commitment to issue a Certificate Guaranty
Insurance Policy dated May 24, 2000 and issued by the Certificate Insurer.

            "Compensating Interest": The amount defined in Section 8.09(b)
hereof.

            "Control Party": Until the last sentence of Section 11.18 hereof is
applicable and so long as no Certificate Insurer Default has occurred and is
continuing, the Certificate Insurer, and thereafter, the Trustee.

            "Coupon Rate": The rate of interest borne by each Note.

            "Current Interest": With respect to any Payment Date, the sum of the
Class A-1 Current Interest, the Class A-2 Current Interest, the Class A-3
Current Interest, the Class A-4 Current Interest, the Class A-5 Current
Interest, the Class A-6 Current Interest and the Class A-7 Current Interest.

            "Date of Payment Loan": Any Mortgage Loan as to which, pursuant to
the Note relating thereto, interest is computed and charged to the Mortgagor at
the Coupon Rate on the outstanding principal balance of such Note based on the
number of days elapsed between receipt of the Mortgagor's last payment through
receipt of the Mortgagor's most current payment.

            "Deficiency Amount": As defined in the Policy.

            "Definitive Certificate": Certificates issued in definitive form
without coupons.

            "Delinquency Advance": The amount defined in Section 8.09(a) hereof.

            "Delinquent": A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.

                                       12
<PAGE>   19
            "Delivery Order": The delivery order in the form set forth as
Exhibit F hereto and delivered by the Sponsor to the Trustee on the Startup Day
pursuant to Section 4.01 hereof.

            "Depository": The Depository Trust Company, 7 Hanover Square, New
York, New York 10004 and any successor Depository hereafter named.

            "Designated Depository Institution": With respect to each Account,
an institution whose deposits are insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC, the long-term deposits of which
shall be rated A2 or better by Moody's or A or better by Standard & Poor's and
the short-term deposits of which shall be rated P-1 or better by Moody's and A-1
or better by Standard & Poor's, unless otherwise approved in writing by the
Trustee, the Certificate Insurer, Moody's and Standard & Poor's, and which is
any of the following: (i) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (ii) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (iii) a national banking association duly
organized, validly existing and in good standing under the federal banking laws,
(iv) a principal subsidiary of a bank holding company, or (v) approved in
writing by the Trustee, the Certificate Insurer, Moody's and Standard & Poor's;
provided, however, that any such institution or association shall have combined
capital, surplus and undivided profits of at least $100,000,000. Notwithstanding
the foregoing, an Account may be held by an institution otherwise meeting the
preceding requirements except that the only applicable rating requirement shall
be that the unsecured and uncollateralized debt obligations thereof shall be
rated Baa3 or better by Moody's or BBB or better by Standard & Poor's if such
institution has trust powers and such Account is held by such institution in its
corporate trust department.

            "Designated Residual Owner": Advanta Finance Residual Corporation.

            "Determination Date": As to each Payment Date, the third Business
Day preceding such Payment Date or such earlier day as shall be agreed to by the
Certificate Insurer and the Trustee.

            "Direct Participant" or "DTC Participant": Any broker-dealer, bank
or other financial institution for which the Depository holds Class A
Certificates from time to time as a securities depository.

            "Disqualified Organization": Shall have the meaning set forth from
time to time in the definition thereof at Section 860E(e)(5) of the Code (or any
successor statute thereto) and applicable to the Trust.

            "Document Delivery Requirements": The Sponsor's obligations to
deliver certain legal documents, to prepare and record certain Mortgage
assignments or to deliver certain opinions relating to Mortgage assignments, in
each case with respect to the Mortgage Loans and as set forth in Section 3.05(c)
hereof.

            "DTC": The Depository Trust Company.

                                       13
<PAGE>   20
            "Eligible Investments": Those investments so designated pursuant to
Section 7.07 hereof.

            "Euroclear": The Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.

            "Event of Default": Any event described in Sections 8.20(a) or (b)
hereof.

            "Fannie Mae": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor thereof.

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

            "Final Determination": As defined in Section 9.03(a) hereof.

            "First Mortgage Loan": A Mortgage Loan which constitutes a first
priority mortgage lien with respect to any Property.

            "Fixed Rate Group Available Funds Cap Rate": As of any Payment Date,
an amount, expressed as a per annum rate and calculated on the basis of a
360-day year consisting of twelve thirty-day months, equal to (A)(i) the
aggregate amount of interest accrued and collected (or advanced) at the Coupon
Rates on all of the Mortgage Loans in the Group I Pool for the related
Remittance Period net of Civil Relief Act Shortfalls minus (ii) the aggregate of
the Servicing Fee, the Premium Amount and the Trustee's Fee, in each case
relating to Group I, divided by (B) the aggregate outstanding principal balance
of the Mortgage Loans in Group I as of the beginning of the related Remittance
Period.

            "Formula Pass-Through Rate": With respect to the Class A-7
Certificates, the interest rate resulting from the calculation set forth in
clause (x) in the definition of the Class A-7 Pass-Through Rate.

            "Freddie Mac": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created pursuant to the Emergency
Home Finance Act of 1970, as amended, or any successor thereof.

            "Gross Margin": With respect to each Mortgage Loan with an
adjustable Coupon Rate, the fixed percentage amount set forth in the related
Note which amount is added to the Index in accordance with the terms of the
related Note to determine, on each Interest Rate Adjustment Date, the Coupon
Rate for such Mortgage Loan, subject to any minimum or maximum.

            "Group": Group I or Group II.

            "Group I" or "Group I Pool": The pool of Mortgage Loans which have
fixed Coupon Rates and are identified in the related Schedule of Mortgage Loans
as

                                       14
<PAGE>   21
having been assigned to Group I, including any Qualified Replacement Mortgages
and Subsequent Mortgage Loans assigned to Group I.

            "Group I Available Funds": As defined in Section 7.03(a) hereof.

            "Group I Base Principal Distribution Amount": With respect to the
Group I Certificates, as of any Payment Date, the lesser of:

            (a) the Group I Available Funds, plus any Insured Payment relating
      to Group I and minus the Group I Interest Distribution Amount, and

            (b)   (i)   the sum, without duplication of:

                  (A)   the principal actually collected by the Master Servicer
                        with respect to the Mortgage Loans in Group I during the
                        related Remittance Period;

                  (B)   the Loan Balance of each Mortgage Loan in Group I that
                        either was repurchased by the Sponsor or an Originator
                        or purchased by the Master Servicer or any Sub-Servicer
                        on the related Remittance Date, to the extent such Loan
                        Balance is actually received by the Trustee;

                  (C)   any Substitution Amounts delivered by the Sponsor or an
                        Originator on the related Remittance Date in connection
                        with a substitution of a Mortgage Loan in Group I, to
                        the extent such Substitution Amounts are actually
                        received by the Trustee;

                  (D)   all Net Liquidation Proceeds related to principal and
                        actually collected by the Master Servicer with respect
                        to the Mortgage Loans in Group I during the related
                        Remittance Period;

                  (E)   the proceeds related to principal received by the
                        Trustee from any termination of Group I;

                  minus

                  (ii) the amount of any Group I Overcollateralization Reduction
            Amount.

            "Group I Capitalized Interest Deposit":  $420,514.44

            "Group I Capitalized Interest Requirement": As of any Payment Date
occurring during the Pre-Funding Period and the Payment Date immediately
following the Pre-Funding Period, the difference, if any, between (x) the sum of
(i) the Group I Interest Distribution Amount for such Payment Date, (ii) the
Premium Amount relating to

                                       15
<PAGE>   22
the Group I Certificates and (iii) the Trustee's Fee relating to the Group I
Certificates and (y) the sum of (i) the Group I Interest Remittance Amount as of
such Payment Date, and (ii) any Pre-Funding Earnings related to the Group I
Pre-Funded Amount to be transferred to the Certificate Account on such Payment
Date pursuant to Section 7.04 hereof.

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

            "Group I Interest Distribution Amount": As of any Payment Date, the
sum of (i) the Class A-1 Current Interest, Class A-2 Current Interest, Class A-3
Current Interest, Class A-4 Current Interest, Class A-5 Current Interest and
Class A-6 Current Interest and (ii) any Class A-1 Interest Carry Forward Amount,
Class A-2 Interest Carry Forward Amount, Class A-3 Interest Carry Forward
Amount, Class A-4 Interest Carry Forward Amount, Class A-5 Interest Carry
Forward Amount and Class A-6 Interest Carry Forward Amount.

            "Group I Interest Remittance Amount": As of any Remittance Date with
respect to the Mortgage Loans in Group I, the sum, without duplication, of (i)
all interest accrued during the related Remittance Period (less the Servicing
Fee with respect to such Mortgage Loans) and actually collected prior to such
Remittance Date, (ii) all Delinquency Advances and all Special Advances made by
the Master Servicer on such Remittance Date, (iii) all Compensating Interest
paid by the Master Servicer on such Remittance Date, net of amounts allowed to
be retained pursuant to Section 8.08(c), (iv) the portion of the Loan Purchase
Price and the Substitution Amount relating to accrued interest on the Mortgage
Loans in Group I, (v) the portion of any Net Liquidation Proceeds relating to
accrued and unpaid interest with respect to Group I and (vi) the proceeds of any
liquidation of the Trust Estate related to Group I (to the extent such proceeds
relate to interest).

            "Group I Monthly Remittance Amount": As of any Remittance Date, the
sum of (i) the Group I Interest Remittance Amount and (ii) the Group I Principal
Remittance Amount.

            "Group I Net Monthly Excess Cashflow": As of any Payment Date, the
Group I Available Funds, if any, remaining after application of the items listed
in clauses (i) through (xiii) of Section 7.05(c) hereof on such Payment Date.

            "Group I Net Weighted Average Coupon Rate": With respect to any
Payment Date, the weighted average of the Coupon Rates of the Mortgage Loans in
Group I (weighted by the Loan Balances of the Mortgage Loans in Group I), less
the sum of (A) 0.75% per annum, (B) the Trustee Fee Rate related to Group I, and
(C) the fraction, expressed as a percentage, (i) the numerator of which is equal
to the product of (x) twelve and (y) the Premium Amount for the related Payment
Date with respect to the Class A-1, A-2, A-3, A-4, A-5, and A-6 Certificates and
(ii) the denominator of which is equal to the aggregate Loan Balances of the
Mortgage Loans in Group I.

                                       16
<PAGE>   23
            "Group I Original Balance": The sum of (x) the aggregate principal
balances of the Initial Mortgage Loans in Group I as of the Initial Cut-Off
Date, which equals $297,166,303.74 and (y) the Group I Original Pre-Funded
Amount, which sum is $326,797,385.62.

            "Group I Original Pre-Funded Amount": The amount deposited in the
Pre-Funding Account on the Startup Day from the proceeds of the sale of the
Group I Certificates, which amount is $29,631,081.88.

            "Group I Overcollateralization Amount": As of any Payment Date, the
amount, if any, by which (x) the aggregate Loan Balance of the Mortgage Loans in
Group I as of the close of business on the last day of the immediately preceding
Remittance Period plus amount on deposit in the Pre-Funding Account as of the
close of business on the last day of the immediately preceding Remittance Period
exceeds (y) the aggregate Certificate Principal Balance of the Group I
Certificates after taking into account all distributions of principal on such
Group I Certificates as of such Payment Date (except for any payment to be made
as to principal from the proceeds of the Certificate Insurance Policy).

            "Group I Overcollateralization Deficiency Amount": With respect to
any Payment Date, the excess, if any, of (x) the Specified Overcollateralization
Amount for Group I over (y) the Group I Overcollateralization Amount.

            "Group I Overcollateralization Deficit": With respect to any Payment
Date, the amount, if any, by which (x) the aggregate Certificate Principal
Balance of the Group I Certificates, after taking into account all distributions
to be made on such Payment Date (except for any payment to be made as to
principal from the proceeds of the Certificate Insurance Policy), exceeds (y)
the sum of (i) aggregate principal balance of the Mortgage Loans in Group I as
of the close of business on the last day of the preceding Remittance Period,
plus (ii) any amounts remaining in the Pre-Funding Account as of the close of
business on the last day of the related Remittance Period.

            "Group I Overcollateralization Increase Amount": As of any Payment
Date, the lesser of (x) the Group I Overcollateralization Deficiency Amount and
(y) the sum of (i) the Group I Net Monthly Excess Cashflow plus (ii) any Group
II Net Monthly Excess Cashflow remaining after funding in full the Group II
Overcollateralization Deficiency Amount.

            "Group I Overcollateralization Reduction Amount": As of any Payment
Date, the lesser of (x) the Group I Principal Remittance Amount for such Payment
Date and (y) the excess of (i) the Group I Overcollateralization Amount for such
Payment Date, over (ii) the Specified Overcollateralization Amount for Group I
for such Payment Date.

            "Group I Pre-Funded Amount": With respect to any Determination Date,
the amount on deposit in the Pre-Funding Account relating to Group I and
available for the purchase of the Subsequent Mortgage Loans to be conveyed to
Group I.

                                       17
<PAGE>   24
            "Group I Principal Distribution Amount": With respect to the Group I
Certificates, as of any Payment Date, the sum of (i) the Group I Base Principal
Distribution Amount, (ii) the amount of any Group I Overcollateralization
Increase Amount, (iii) the amount of any Group I Overcollateralization Deficit
and (iv) with respect to the Payment Date following the end of the Pre-Funding
Period only, any Group I Pre-Funded Amounts released from the Pre-Funding
Account.

            "Group I Principal Remittance Amount": As of any Remittance Date,
the sum, without duplication, of (i) the principal actually collected by the
Master Servicer with respect to Mortgage Loans in Group I during the related
Remittance Period, (ii) the Loan Balance of each Mortgage Loan in Group I that
was purchased from the Trust on or prior to such Remittance Date, to the extent
such Loan Balance was actually deposited in the Principal and Interest Account,
(iii) any Substitution Amounts relating to principal delivered by the Sponsor
and deposited in the Principal and Interest Account in connection with a
substitution of a Mortgage Loan in Group I, (iv) any Net Liquidation Proceeds
relating to principal actually collected by the Master Servicer with respect to
such Mortgage Loans in Group I during the related Remittance Period net of
amounts allowed to be retained pursuant to Section 8.08(c), and (v) the proceeds
of any liquidation of the Trust Estate related to Group I (to the extent such
proceeds related to principal).

            "Group II" or "Group II Pool": The pool of adjustable rate Mortgage
Loans identified in the related Schedule of Mortgage Loans as having been
assigned to Group II, including any Qualified Replacement Mortgages and any
Subsequent Mortgage Loans assigned to Group II.

            "Group II Available Funds": As defined in Section 7.03(a) hereof.

            "Group II Base Principal Distribution Amount": With respect to the
Group II Certificates, as of any Payment Date, the lesser of:

            (a) the Group II Available Funds, plus any Insured Payment relating
      to Group II and minus the Group II Interest Distribution Amount, and

            (b)   (i)   the sum, without duplication of:

                  (A)   the principal actually collected by the Master Servicer
                        with respect to the Mortgage Loans in Group II during
                        the related Remittance Period;

                  (B)   the Loan Balance of each Mortgage Loan in Group II that
                        either was repurchased by the Sponsor or an Originator
                        or purchased by the Master Servicer or any Sub-Servicer
                        on the related Remittance Date, to the extent such Loan
                        Balance is actually received by the Trustee;

                  (C)   any Substitution Amounts delivered by the Sponsor or an
                        Originator on the related Remittance Date in connection
                        with a substitution of a Mortgage Loan in Group II, to
                        the

                                       18
<PAGE>   25
                        extent such Substitution Amounts are actually received
                        by the Trustee;

                  (D)   all Net Liquidation Proceeds related to principal and
                        actually collected by the Master Servicer with respect
                        to the Mortgage Loans in Group II during the related
                        Remittance Period;

                  (E)   the proceeds related to principal received by the
                        Trustee from any termination of Group II;

                  minus

                  (ii) the amount of any Group II Overcollateralization
            Reduction Amount.

            "Group II Capitalized Interest Deposit": $153,061.37.

            "Group II Capitalized Interest Requirement": As of any Payment Date
occurring during the Pre-Funding Period and the Payment Date immediately
following the Pre-Funding Period, the difference, if any, between (x) the sum of
(i) the Group II Interest Distribution Amount on such Payment Date, (ii) the
Premium Amount relating to the Group II Certificates and (iii) the Trustee's Fee
relating to the Group II Certificates and (y) the sum of (i) the Group II
Interest Remittance Amount for such Payment Date and (ii) any Pre-Funding
Earnings relating to the Group II Pre-Funded Amount to be transferred to the
Certificate Account on such Payment Date pursuant to Section 7.04 hereof.

            "Group II Certificates": The Class A-7 Certificates.

            "Group II Interest Distribution Amount": As of any Payment Date, the
sum of (i) the Class A-7 Current Interest and (ii) any Class A-7 Interest Carry
Forward Amount.

            "Group II Interest Remittance Amount": As of any Remittance Date
with respect to the Mortgage Loans in Group II, the sum, without duplication, of
(i) interest accrued during the related Remittance Period (less the Servicing
Fee with respect to such Mortgage Loans) and actually collected prior to such
Remittance Date, (ii) all Delinquency Advances and all Special Advances made by
the Master Servicer on such Remittance Date, (iii) all Compensating Interest
paid by the Master Servicer on such Remittance Date, net of amounts allowed to
be retained pursuant to Section 8.08(c), (iv) the portion of the Loan Purchase
Price and the Substitution Amount relating to interest accrued on the Mortgage
Loans in Group II and (v) the portion of any Net Liquidation Proceeds relating
to accrued and unpaid interest with respect to Group II and (vi) the proceeds of
any liquidation of the Trust Estate related to Group II (to the extent such
proceeds relate to interest).

                                       19
<PAGE>   26
            "Group II Monthly Remittance Amount": As of any Remittance Date, the
sum of (i) the Group II Interest Remittance Amount and (ii) the Group II
Principal Remittance Amount.

            "Group II Net Monthly Excess Cashflow": As of any Payment Date, the
Group II Available Funds, if any, remaining after application of the items
listed in clauses (i) through (xiii) of Section 7.05(c) hereof on such Payment
Date.

            "Group II Net Weighted Average Coupon Rate": With respect to any
Payment Date, the weighted average of the Coupon Rates of the Mortgage Loans in
Group II (weighted by the Loan Balances of the Mortgage Loans in Group II), less
the sum of (A) 0.75% per annum, (B) the Trustee Fee Rate related to Group II and
(C) the fraction, expressed as a percentage, (i) the numerator of which is equal
to the product of (x) twelve and (y) the Premium Amount for the related Payment
Date with respect to the Class A-7 Certificates and (ii) the denominator of
which is equal to the aggregate Loan Balances of the Mortgage Loans in Group II.

            "Group II Original Balance": The sum of the aggregate principal
balances of the Mortgage Loans in Group II as of the Initial Cut-Off-Date which
equals $63,861,425.87 and (y) the Group II Original Pre-Funded Amount, which sum
equals $76,530,612.24.

            "Group II Original Pre-Funded Amount": The amount deposited in the
Pre-Funding Account on the Startup Day, from the proceeds of the sale of the
Group II Certificates, which amount is $12,669,186.37.

            "Group II Overcollateralization Amount": As of any Payment Date, the
difference between (x) the aggregate Loan Balance of the Mortgage Loans in Group
II as of the close of business on the last day of the immediately preceding
Remittance Period and (y) the aggregate Certificate Principal Balance of the
Group II Certificates after taking into account all distributions of principal
on such Group II Certificates as of such Payment Date (except for any payment to
be made as to principal from the proceeds of the Certificate Insurance Policy).

            "Group II Overcollateralization Deficiency Amount": With respect to
any Payment Date, the excess, if any, of (x) the Specified Overcollateralization
Amount for Group II over (y) the Group II Overcollateralization Amount.

            "Group II Overcollateralization Deficit": With respect to any
Payment Date, the amount, if any, by which (x) the aggregate Certificate
Principal Balance of the Group II Certificates, after taking into account all
distributions to be made on such Payment Date (except for any payment to be made
as to principal from the proceeds of the Certificate Insurance Policy), exceeds
(y) the sum of (i) the aggregate principal balance of the Mortgage Loans in
Group II as of the close of business on the last day of the preceding Remittance
Period plus (ii) any amounts remaining in the Pre-Funding Account as of the
close of business on the last day of the preceding Remittance Period.

                                       20
<PAGE>   27
            "Group II Overcollateralization Increase Amount": As of any Payment
Date, the lesser of (x) the Group II Overcollateralization Deficiency Amount and
(y) the sum of (i) the Group II Net Monthly Excess Cashflow plus (ii) any Group
I Net Monthly Excess Cashflow remaining after funding in full the Group I
Overcollateralization Deficiency Amount.

            "Group II Overcollateralization Reduction Amount": As of any Payment
Date, the lesser of (x) the Group II Principal Remittance Amount and (y) the
excess of (i) the Group II Overcollateralization Amount, over (ii) the Specified
Overcollateralization Amount for Group II.

            "Group II Pre-Funded Amount": With respect to any Determination
Date, the amount on deposit in the Pre-Funding Account and available for the
purchase of the Subsequent Mortgage Loans to be conveyed to Group II.

            "Group II Principal Distribution Amount": With respect to the Group
II Certificates, as of any Payment Date, the sum of (i) the Group II Base
Principal Distribution Amount, (ii) the amount of any Group II
Overcollateralization Increase Amount, (iii) the amount of any Group II
Overcollateralization Deficit and (iv) with respect to the Payment Date
following the end of the Pre-Funding Period only, any Group II Pre-Funded Amount
released from the Pre-Funding Account.

            "Group II Principal Remittance Amount": As of any Remittance Date,
the sum, without duplication, of (i) the principal actually collected by the
Master Servicer with respect to Mortgage Loans in Group II during the related
Remittance Period, (ii) the Loan Balance of each Mortgage Loan in Group II that
was purchased from the Trust on or prior to such Remittance Date, to the extent
such Loan Balance was actually deposited in the Principal and Interest Account,
(iii) any Substitution Amounts relating to principal delivered by the Sponsor
and actually deposited in the Principal and Interest Account in connection with
a substitution of a Mortgage Loan in Group II, (iv) any Net Liquidation Proceeds
relating to principal actually collected by the Master Servicer with respect to
such Mortgage Loans in Group II during the related Remittance Period net of
amounts allowed to be retained pursuant to Section 8.08(c), and (v) the proceeds
of any liquidation of the Trust Estate related to Group II (to the extent such
proceeds related to principal).

            "Indemnification Agreement": The Indemnification Agreement dated as
of May 19, 2000 among the Certificate Insurer and the Underwriters as may be
amended from time to time.

            "Index": With respect to any adjustable rate Mortgage Loan, the
applicable index set forth in the related Note.

            "Indirect Participant" shall mean any financial institution for whom
any Direct Participant holds an interest in a Class A Certificate.

            "Initial Clean-Up Call Date": The first Payment Date following the
date on which the aggregate Loan Balances of all Mortgage Loans has declined to
10% or less of the aggregate Original Certificate Principal Balance of the Class
A Certificates.

                                       21
<PAGE>   28
            "Initial Cut-Off Date": The date as of which Initial Mortgage Loans
are transferred and assigned to the Trust, which date shall be the opening of
business on May 1, 2000.

            "Initial Mortgage Loans" shall mean Mortgage Loans conveyed, or
caused to be conveyed, to the Trust by the Sponsor on the Startup Day.

            "Insurance Agreement": The Insurance and Indemnity Agreement dated
as of May 24, 2000 between the Sponsor, the Master Servicer, the Trustee and the
Certificate Insurer, as it may be amended from time to time.

            "Insured Amount": As defined in the Policy.

            "Insured Payment": As defined in the Policy.

            "Interest Determination Date": With respect to any Payment Date for
the Class A-1 and Class A-7 Certificates, the second London Business Day
preceding the Accrual Period relating to such Payment Date or with respect to
the June 2000 Payment Date, the second London Business Day preceding the Startup
Day.

            "Interest Rate Adjustment Date": The date on which an adjustment to
the Coupon Rate of an adjustable rate Note becomes effective.

            "Junior Mortgage Loan": A Mortgage Loan which constitutes a junior
priority mortgage lien with respect to the related Property.

            "Late Payment Rate": The rate defined in the Insurance Agreement.

            "LIBOR": With respect to any Accrual Period for the Class A-1 and
Class A-7 Certificates, the rate determined by the Trustee on the related
Interest Determination Date on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits, as they appear on the Telerate Screen
3750, as of 11:00 a.m., London time.

            On each Interest Determination Date, the Trustee will determine
LIBOR for the next Accrual Period for the Class A-1 and Class A-7 Certificates
as follows:

            first, on the basis of offered rates for one month United States
      dollar deposits, as this rate appears on Telerate Page 3750, as of 11:00
      a.m., London time;

            second, if such rate does not appear on Telerate Page 3750 as of
      11:00 a.m., London time, LIBOR will be the arithmetic mean of the offered
      quotations of two or more Reference Banks, rounded to the nearest whole
      multiple of 1/16%; and

            third, if fewer than two Reference Banks provide offered quotations,
      LIBOR for the Accrual Period for the Class A-1 and Class A-7 Certificates
      will

                                       22
<PAGE>   29
      be the higher of (x) LIBOR as determined on the previous Interest
      Determination Date and (y) the Reserve Interest Rate.

            The establishment of LIBOR on each Interest Determination Date by
the Trustee and the Trustee's calculation of the rate of interest applicable to
the Class A-1 and Class A-7 Certificates for the related Accrual Period will, in
the absence of manifest error, be final and binding.

            "Liquidated Loan": A Mortgage Loan with respect to which the related
Property has been acquired, liquidated or foreclosed and with respect to which
the Master Servicer determines that all Liquidation Proceeds which it expects to
recover from or on account of such Mortgage Loan have been recovered. A Mortgage
Loan which is purchased from the Trust pursuant to Section 3.03, 3.04, 3.06(b)
or 8.10 hereof is not a "Liquidated Loan".

            "Liquidation Expenses": Expenses which are incurred by the Master
Servicer or any Sub-Servicer in connection with the liquidation of any defaulted
Mortgage Loan, such expenses include, without limitation, legal fees and
expenses, and any unreimbursed Servicing Advances expended by the Master
Servicer or any Sub-Servicer pursuant to Section 8.09.

            "Liquidation Proceeds": With respect to any Liquidated Loan, any
amounts (including the proceeds of any Mortgage Insurance Policy) recovered by
the Master Servicer in connection with such Liquidated Loan, whether through
trustee's sale, foreclosure sale or otherwise, including payments in connection
with such Liquidated Loan received from the related Mortgagor, other than the
amounts required to be paid to the Mortgagor pursuant to the terms of the
applicable Mortgage or to be applied otherwise pursuant to law.

            "Loan Balance": With respect to each Mortgage Loan, the outstanding
principal balance thereof as of the Initial Cut-Off Date, Subsequent Cut-Off
Date or Replacement Cut-Off Date, as the case may be, less any principal amount
relating to such Mortgage Loan included in previous Monthly Remittance Amounts
that were transferred by the Master Servicer or any Sub-Servicer to the Trustee
for deposit in the Certificate Account; provided, however, that the Loan Balance
for any Mortgage Loan which has become a Liquidated Loan shall be zero as of the
first day of the Remittance Period following the Remittance Period in which such
Mortgage Loan becomes a Liquidated Loan, and at all times thereafter.

            "Loan Purchase Price": With respect to any Mortgage Loan purchased
from the Trust on a Remittance Date pursuant to Section 3.03, 3.04, 3.06(b) or
8.10 hereof and for which a Qualified Replacement Mortgage was included, an
amount equal to the Loan Balance of such Mortgage Loan as of such Remittance
Date, plus one month's accrued interest (if not already deposited in the
Principal and Interest Account) on the outstanding Loan Balance as of the
beginning of the related Remittance Period computed at the Coupon Rate less the
Servicing Fee (expressed as an annual percentage rate), together with, without
duplication, the aggregate amount of (i) all Delinquency

                                       23
<PAGE>   30
Advances which the Master Servicer or any Sub-Servicer has theretofore failed to
remit with respect to such Mortgage Loan and (ii) any Reimbursement Amount
relating to such Mortgage Loan.

            "London Business Day": A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.

            "Lower-Tier Balance": As to each Class of Lower-Tier Interests and
any Payment Date, the Initial Lower-Tier Balance as set forth in Section 2.08(a)
minus all amounts distributed as principal of such Class on previous Payment
Dates.

            "Lower-Tier Interest 1": The interest of that name established
pursuant to Section 2.08(a) hereof.

            "Lower-Tier Interest 2": The interest of that name established
pursuant to Section 2.08(a) hereof.

            "Lower-Tier Interest 3": The interest of that name established
pursuant to Section 2.08(a) hereof.

            "Lower-Tier Interest 4": The interest of that name established
pursuant to Section 2.08(a) hereof.

            "Lower-Tier Interest 5": The interest of that name established
pursuant to Section 2.08(a) hereof.

            "Lower-Tier Pass-Through Rate": As to each of the respective
Lower-Tier Interests, the applicable "Lower-Tier Pass-Through Rate" set forth in
Section 2.08 hereof.

            "Lower-Tier REMIC": The segregated pool of assets consisting of the
Mortgage Loans, the Accounts (except for the Non-REMIC Estate), any REO Property
and any proceeds of the foregoing.

            "Lower-Tier REMIC Interests": As defined in Section 2.08(b) hereof.

            "Lower-Tier REMIC Regular Interests": As defined in Section 2.08(b)
hereof.

            "Lower-Tier REMIC Residual Interest": The Class R-I Certificate.

            "Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.

            "Master Servicer Affiliate": A Person (i) controlling, controlled by
or under common control with the Master Servicer and (ii) which is qualified to
service residential mortgage loans and is acting as a Sub-Servicer pursuant to
Section 8.03 hereof.

                                       24
<PAGE>   31
            "Master Servicer's Trust Receipt": The Master Servicer's trust
receipt in the form set forth as Exhibit J hereto.

            "Maximum Collateral Amount": The sum of (i) the Group I Loan
Balances as of the Initial Cut-Off Date, (ii) the Group II Loan Balances as of
the Initial Cut-Off Date, and (iii) the aggregate Loan Balances of all
Subsequent Mortgage Loans acquired by the Trust, as of the respective Subsequent
Cut-Off Dates.

            "Monthly Remittance Amount": The Group I Monthly Remittance Amount
or the Group II Monthly Remittance Amount, as applicable.

            "Moody's": Moody's Investors Service, Inc.

            "Mortgage": The mortgage, deed of trust or other instrument creating
a first or junior lien on an interest in real property securing a Note.

            "Mortgage File": For each Mortgage Loan, the items listed below:

            (a) the original Note, or , if such Note is lost, a certified copy
      thereof along with a Lost Note Affidavit in the form of Exhibit L hereto,
      bearing all intervening endorsements, endorsed either (i) "Pay to the
      order of Bankers Trust Company of California, N.A., as custodian or
      trustee under the applicable custody or trust agreement, without recourse"
      or (ii) "Pay to the order of Bankers Trust Company of California, N.A., as
      custodian or trustee under the applicable custody or trust agreement,
      without recourse, Advanta Mortgage Corp. USA as Master Servicer," or (iii)
      "Pay to the order of Bankers Trust Company of California, N.A., as
      custodian or trustee" by [Seller, signature, name, title] and signed in
      the name of the previous owner by an authorized officer (in the event that
      the Mortgage Loan was acquired by the previous owner in a merger the
      signature must be in the following form: "[the previous owner], successor
      by merger to [name of predecessor]", in the event that the Mortgage Loan
      was acquired or originated while doing business under another name, the
      signature must be in the following form: "[the previous owner], formerly
      known as [previous name]" or (iv) "Pay to the order of Bankers Trust
      Company of California, N.A., without recourse" or (v) "Pay to the order of
      _______________, without recourse". The original Note should be
      accompanied by any rider made in connection with the origination of the
      related Mortgage Loan;

            (b) the original of any guarantee executed in connection with the
      Note (if any);

            (c) the original Mortgage with evidence of recording thereon or
      copies certified by the related recording office or, if the original
      Mortgage has not yet been returned from the recording office, a certified
      copy of the Mortgage;

            (d) the originals of any assumption, modification, consolidation or
      extension agreements;

                                       25
<PAGE>   32
            (e) the original assignment of Mortgage of each Mortgage Loan to
      "Bankers Trust Company of California, N.A., as custodian or trustee",
      "Bankers Trust Company of California, N.A. as trustee or custodian on
      behalf of Advanta Conduit Receivables, Inc.", "Bankers Trust Company of
      California, N.A., as trustee" or "____________________." In the event that
      the Mortgage Loan was acquired by the previous owner in a merger, the
      assignment of Mortgage must be by the "(previous owner), successor by
      merger to (names of predecessor)"; and in the event that the Mortgage Loan
      was acquired or originated by the previous owner while doing business
      under another name, the Assignment of Mortgage must be by the "(previous
      owner), formerly known as (previous name)";

            (f) the originals of all intervening assignments of Mortgage,
      showing a complete chain of assignment from origination to the related
      Originator, including warehousing assignments, with evidence of recording
      thereon (or, if an original intervening assignment has not been returned
      from the recording office, a certified copy thereof); and

            (g) any assignment of Mortgages required to be delivered under
      Section 3.05(c)(i) or 3.05(c)(ii) hereunder.

            "Mortgage Insurance Policy": Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan, but excluding any non-mortgage
related or credit life insurance policy. The term "Mortgage Insurance Policy"
shall not include the Certificate Insurance Policy.

            "Mortgage Loan Group": Either Group I or Group II. References herein
to the related Class of Class A Certificates, when used with respect to a
Mortgage Loan Group, shall mean (A) in the case of Group I, the Group I
Certificates and (B) in the case of Group II, the Group II Certificates.

            "Mortgage Loan Transfer Agreement": The Mortgage Loan Transfer
Agreement dated as of May 1, 2000 among the Sponsor, the Trustee and the
Originators named therein together with any related Conveyance Agreements (as
defined therein).

            "Mortgage Loans": The mortgage loans transferred and assigned to the
Trust pursuant to Section 3.05(a) hereof including any Subsequent Mortgage
Loans, together with any Qualified Replacement Mortgages substituted therefor in
accordance with this Agreement, identified in the Schedule of Mortgage Loans.
The term "Mortgage Loan" includes the terms "First Mortgage Loan" and "Junior
Mortgage Loan". The term "Mortgage Loan" includes any Mortgage Loan which is
Delinquent, which relates to a foreclosure or which relates to a Property which
is an REO Property prior to such Property's disposition by the Trust. Any
mortgage loan which, although intended by the parties hereto to have been, and
which purportedly was, transferred and assigned to the Trust by the Sponsor, in
fact was not transferred and assigned to the Trust for any reason whatsoever
shall nevertheless be considered a "Mortgage Loan" for all purposes of this
Agreement. The term "Mortgage Loan" includes the terms "Initial Mortgage Loan",
"Subsequent Mortgage Loan" and "Qualified Replacement Mortgage".

                                       26
<PAGE>   33
            "Mortgagor":  The obligor on a Note.

            "Net Liquidation Proceeds": As to any Liquidated Loan, Liquidation
Proceeds net of, without duplication, Liquidation Expenses, unreimbursed
Servicing Advances, unreimbursed Delinquency Advances and accrued and unpaid
Servicing Fees through the date of liquidation. In no event shall Net
Liquidation Proceeds with respect to any Liquidated Loan be less than zero.

            "Net Monthly Excess Cash Flow": With respect to any Payment Date,
the Group I Net Monthly Excess Cashflow or Group II Net Monthly Excess Cashflow,
as applicable.

            "Nonrecoverable Advances": With respect to any Mortgage Loan, (i)
any Delinquency Advance or Servicing Advance previously made and not reimbursed
pursuant to Sections 7.05(b)(xiv) or 8.09, (ii) a Delinquency Advance or
Servicing Advance proposed to be made in respect of a Mortgage Loan or REO
Property either of which, in the good faith business judgment of the Master
Servicer, as evidenced by an Officer's Certificate delivered no later than one
Business Day prior to the related Determination Date to the Certificate Insurer
and the Trustee, would not be ultimately recoverable pursuant to Sections
7.05(b)(xiv) or 8.09 or (iii) any other advance identified as a Nonrecoverable
Advance in Section 8.09(d).

            "Non-REMIC Estate": Collectively, the Supplemental Interest Trust,
the Supplemental Interest Payment Account, the Capitalized Interest Account and
the Pre-Funding Account.

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

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

            "Offered Certificates": The Class A Certificates.

            "Officer's Certificate": A certificate signed by any Authorized
Officer of any Person delivering such certificate.

            "Operative Documents": Collectively, this Agreement, the Mortgage
Loan Transfer Agreement, each Subsequent Transfer Agreement, the Certificate
Insurance Policy, the Insurance Agreement, the Indemnification Agreement and the
Certificates.

            "Original Certificate Principal Balance": The Certificate Principal
Balances as of the Startup Day of each of the following Classes of Certificates:

<TABLE>
<S>                                    <C>     <C>
            Class A-1 Certificates      =      $107,764,000
            Class A-2 Certificates      =      $ 57,801,000
            Class A-3 Certificates      =      $ 40,179,000
</TABLE>

                                       27
<PAGE>   34
<TABLE>
<S>                                    <C>     <C>
            Class A-4 Certificates      =       $62,429,000
            Class A-5 Certificates      =       $24,327,000
            Class A-6 Certificates      =       $32,500,000
            Class A-7 Certificates      =       $75,000,000
</TABLE>

            "Original Principal Amount": With respect to each Note, the
principal amount of such Note on the date of origination thereof.

            "Originator": Any entity from which the Sponsor has purchased (or,
in the case of Subsequent Mortgage Loans, will purchase) Mortgage Loans,
including Advanta Mortgage Corp. USA, a Delaware corporation, Advanta National
Bank, a national banking association, Advanta Bank Corp., a Utah industrial loan
corporation, and Advanta Finance Corp., a Nevada corporation.

            "Outstanding": With respect to all Certificates of a Class, as of
any date of determination, all such Certificates theretofore executed and
delivered hereunder except:

            (i)   Certificates  theretofore  cancelled by the Trustee or
      delivered to the Trustee for cancellation;

            (ii) Certificates or portions thereof for which full and final
      payment money in the necessary amount has been theretofore deposited with
      the Trustee in trust for the Owners of such Certificates;

            (iii) Certificates in exchange for or in lieu of which other
      Certificates have been executed and delivered pursuant to this Agreement,
      unless proof satisfactory to the Trustee is presented that any such
      Certificates are held by a bona fide purchaser; and

            (iv) Certificates alleged to have been destroyed, lost or stolen for
      which replacement Certificates have been issued as provided for in Section
      5.05 hereof.

            "Overcollateralization Deficit": The Group I Overcollateralization
Deficit or the Group II Overcollateralization Deficit, as applicable.

            "Overcollateralization Increase Amount": The Group I
Overcollateralization Increase Amount or the Group II Overcollateralization
Increase Amount, as applicable.

            "Overcollateralization Reduction Amount": The Group I
Overcollateralization Reduction Amount or the Group II Overcollateralization
Reduction Amount, as applicable.

            "Owner": The Person in whose name a Certificate is registered in the
Register, to the extent described in Section 5.06.

                                       28
<PAGE>   35
            "Pass-Through Rate": The Class A-1 Pass-Through Rate, the Class A-2
Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4 Pass-Through
Rate, the Class A-5 Pass-Through Rate, the Class A-6 Pass-Through Rate, the
Class A-7 Pass-Through Rate or the Class B Pass-Through Rate, as applicable.

            "Payment Date": Any date on which the Trustee is required to make
distributions to the Owners, which shall be the 25th day of each calendar month,
or if the 25th day is not a Business Day, then the next succeeding Business Day,
commencing June 26, 2000.

            "Percentage Interest": As to any Class A Certificate, that
percentage, expressed as a fraction, the numerator of which is the Original
Certificate Principal Balance of such Certificate and the denominator of which
is the Original Certificate Principal Balance of all Certificates of the same
Class; and as to any Class B, Class BS, Class R-I or Class R-II Certificate,
that percentage interest set forth on such Class B, Class BS, Class R-I or Class
R-II Certificate, respectively.

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

            "Pool Cumulative Realized Losses": With respect to any period, the
sum of all Realized Losses with respect to the Mortgage Loans experienced during
such period.

            "Pool Factor": As defined in Section 7.08(a)(xvi) hereof.

            "Pool Principal Balance": The aggregate Loan Balances of all
Mortgage Loans.

            "Preference Amount": As defined in the Policy.

            "Pre-Funding Account": The Pre-Funding Account established in
accordance with Section 7.02 hereof and maintained by the Trustee.

            "Pre-Funded Amount": The Group I Pre-Funded Amount and/or the Group
II Pre-Funded Amount, as applicable.

            "Pre-Funding Earnings": With respect to any Payment Date, the actual
investment earnings earned during the period from the prior Payment Date (or
with respect to the initial Payment Date, from the Startup Day) through but not
including such Payment Date (inclusive) on the Pre-Funding Amount during such
period, as calculated by the Trustee pursuant to Section 7.06 hereof.

            "Pre-Funding Period": The period commencing on the Startup Day and
ending on the earliest to occur of (i) the date on which the Pre-Funded Amount
(exclusive of any investment earnings) is less than $100,000, (ii) the date on
which any Event of Default occurs and (iii) July 31, 2000.

                                       29
<PAGE>   36
            "Premium Amount": With respect to each Group of Mortgage Loans and,
as to any Payment Date, the product of (x) one-twelfth of the Premium Percentage
applicable to such Group and (y) the Certificate Principal Balance of such Group
of Class A Certificates on such Payment Date (after taking into account any
distributions of principal for such Group on such Payment Date).

            "Premium Percentage": The percentage defined as such in the
Insurance Agreement with respect to the related Group.

            "Prepaid Installment": With respect to any Mortgage Loan, any
payment of principal and accrued interest thereon received prior to the
scheduled due date for such payment, intended by the Mortgagor as an early
payment thereof and not as a Prepayment.

            "Prepayment": Any payment of principal of a Mortgage Loan which is
received by the Master Servicer in advance of the scheduled due date for such
payment (other than the principal portion of any Prepaid Installment). The
proceeds of any Mortgage Insurance Policy which are to be applied as a payment
of principal on the related Mortgage Loan shall be deemed to be Prepayments for
all purposes of this Agreement.

            "Prepayment Interest Shortfall": The amount defined in Section
8.09(b) hereof.

            "Preservation Expenses": Expenditures made by the Master Servicer or
any Sub-Servicer in connection with a foreclosed Mortgage Loan prior to the
liquidation thereof, including, without limitation, expenditures for real estate
property taxes, hazard insurance premiums, flood insurance premiums and property
restoration or preservation.

            "Principal and Interest Account": Collectively, each principal and
interest account created by the Master Servicer or any Sub-Servicer pursuant to
Section 8.08(a) hereof, or pursuant to any Sub-Servicing Agreement.

            "Prohibited Transaction": "Prohibited transaction" shall have the
meaning set forth from time to time in the definition thereof contained in
Section 860F(a)(2) of the Code (or any successor statute thereto) and applicable
to the Trust.

            "Property": The underlying property securing a Mortgage Loan.

            "Prospectus": Such final prospectus dated December 28, 1999, as
supplemented by a prospectus supplement dated May 19, 2000 relating to the
Offered Certificates.

            "Purchase Option Period": As defined in Section 9.03(b) hereof.

            "Qualified Liquidation": "Qualified Liquidation" shall have the
meaning set forth from time to time in the definition thereof at Section
860F(a)(4) of the Code (or any successor statute thereto) and applicable to the
Trust.

                                       30
<PAGE>   37
            "Qualified Mortgage": "Qualified Mortgage" shall have the meaning
set forth from time to time in the definition thereof at Section 860G(a)(3) of
the Code (or any successor statute thereto) and applicable to the Trust and the
Mortgage Loan.

            "Qualified Replacement Mortgage": A Mortgage Loan substituted for
another pursuant to Section 3.03, 3.04 or 3.06(b) hereof.

            "Rating Agency": Each of Standard & Poor's and Moody's.

            "Realized Loss": As to any Liquidated Loan, the amount, if any, by
which the Loan Balance thereof as of the date of liquidation exceeds the Net
Liquidation Proceeds realized thereon.

            "Record Date": With respect to each Payment Date and (x) with
respect to the Group I Certificates (other than the Class A-1 Certificates), the
last Business Day of the calendar month immediately preceding the calendar month
in which such Payment Date occurs and (y) with respect to the Class A-1
Certificates and the Group II Certificates, the Business Day immediately
preceding such Payment Date (unless the Certificates become definitive, in which
event the Record Date shall be the last Business Day of the calendar month
immediately preceding the calendar month in which such Payment Date occurs).

            "Redeeming Party": As defined in Section 9.02(a) hereof.

            "Reference Banks": Leading banks, selected by the Trustee after
consultation with the Master Servicer, which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (1) with an
established place of business in London and (2) which are not controlling,
controlled by, or under common control with, the Sponsor.

            "Register": The register maintained by the Trustee in accordance
with Section 5.04 hereof, in which the names of the Owners are set forth.

            "Registrar": The Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.04 hereof, or any duly appointed and eligible
successor thereto.

            "Registration Statement": The Registration Statement (No. 333-92669)
filed by the Sponsor with the Securities and Exchange Commission, including all
amendments thereto and including the Prospectus relating to the Offered
Certificates constituting a part thereof.

            "Reimbursement Amount":  As defined in the Policy.

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

            "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G

                                       31
<PAGE>   38
of the Code, and related provisions, and regulations and rulings promulgated
thereunder, as the foregoing may be in effect from time to time.

            "REMIC Trust": The segregated pool of assets consisting of the Trust
Estate, but excluding the Non-REMIC Estate.

            "Remittance Date": Any date on which the Master Servicer is required
to remit monies on deposit in the Principal and Interest Account to the Trustee,
which shall be no later than the 18th day of each month, or, if such day is not
a Business Day, the immediately succeeding Business Day, commencing in the month
following the month in which the Startup Day occurs.

            "Remittance Period": The period beginning on the first day of the
calendar month immediately preceding the month in which a Remittance Date occurs
and ending on the last day of such immediately preceding calendar month.

            "REO Property": A Property acquired by the Master Servicer or any
Sub-Servicer on behalf of the Trust through foreclosure or grant of a
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

            "Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is transferred and assigned to the Trust.

            "Representation Letter": The letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Class A
Certificates registered in the Register under the nominee name of the
Depository.

            "Representative": Morgan Stanley & Co. Incorporated, as
representative of the Underwriters.

            "Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trustee determines to be either the arithmetic
mean, rounded 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 Interest Determination Date to the principal London offices of
leading banks in the London interbank market or, in the event that the Trustee
cannot determine the arithmetic mean, the lowest one-month U.S. dollar lending
rate which New York City banks selected by the Trustee are quoting on the
Interest Determination Date to leading European banks.

            "SAS 70": Means the "Statement on Auditing Standards No. 70 Reports
on the Processing of Transactions by Service Organizations" as in effect as of
the date hereof, which may be amended from time to time.

            "Schedule of Mortgage Loans": The schedule of Mortgage Loans,
attached hereto as Schedule I as may be further supplemented to include
Subsequent Mortgage Loans or Qualified Replacement Mortgages. The information
contained on

                                       32
<PAGE>   39
each Schedule of Mortgage Loans shall be delivered to the Trustee in an
electronic media satisfactory to the Trustee.

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

            "Senior Lien": With respect to any Junior Mortgage Loan, the
mortgage loan relating to the corresponding Property having a priority lien.

            "Servicing Advance": As defined in Section 8.09(c) and Section 8.13
hereof.

            "Servicing Fee": As to any Payment Date the product of (x)
one-twelfth of 0.75% and (y) the aggregate Loan Balances of the Mortgage Loans
as of the opening of business on the first day of the Remittance Period
preceding such Payment Date.

            "Servicer Termination Loss Trigger": As defined in the Insurance
Agreement.

            "Special Advance": Any advance made by the Master Servicer pursuant
to Section 8.09(d) hereof.

            "Specified Overcollateralization Amount": As defined in the
Insurance Agreement.

            "Sponsor": Advanta Conduit Receivables, Inc., a Nevada corporation.

            "Standard & Poor's": Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc.

            "Startup Day": With respect to each of the Upper-Tier REMIC and the
Lower-Tier REMIC, May 24, 2000.

            "Step-Up Payment Date": The Payment Date following the calendar
month in which the Initial Clean-Up Call Date occurs.

            "Subsequent Cut-Off Date": With respect to any Subsequent Mortgage
Loans, the opening of business on the first day of the calendar month in which
such Subsequent Mortgage Loans are transferred and assigned to the Trust.

            "Subsequent Mortgage Loans": The Mortgage Loans sold to the Trust
pursuant to Section 3.08 hereof, which shall be listed on the Schedule of
Mortgage Loans attached to the Subsequent Transfer Agreement.

            "Subsequent Transfer Agreement": Each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date executed by the Trustee and the Sponsor
substantially in the form of Exhibit K hereto, by which Subsequent Mortgage
Loans are transferred and assigned to the Trust.

                                       33
<PAGE>   40
            "Subsequent Transfer Date": The date specified in each Subsequent
Transfer Agreement.

            "Substitution Amount": In connection with the delivery of any
Qualified Replacement Mortgage, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date is
less than the Loan Balance of the Mortgage Loan being replaced as of such
Replacement Cut-Off Date, an amount equal to such difference together with
accrued and unpaid interest on such amount calculated at the Coupon Rate (net of
the Servicing Fee) of the Mortgage Loan being replaced.

            "Sub-Servicer": Any Person with whom the Master Servicer has entered
into a Sub-Servicing Agreement and who is either a Master Servicer Affiliate or
satisfies any requirements set forth in Section 8.03 hereof in respect of the
qualification of a Sub-Servicer.

            "Sub-Servicing Agreement": The written contract between the Master
Servicer and any Sub-Servicer (other than a Master Servicer Affiliate) relating
to servicing and/or administration of certain Mortgage Loans as permitted by
Section 8.03 hereof.

            "Supplemental Interest Amount": With respect to any Payment Date and
the Class A-7 Certificates, the excess, if any, of (x) Current Interest due on
such Certificates calculated using the Formula Pass-Through Rate applicable to
such Payment Date over (y) the interest due on such Class calculated using at
the ARM Group Available Funds Cap Rate applicable to such Payment Date.

            "Supplemental Interest Payment Account": The account established in
accordance with Section 7.10(a) hereof and maintained by the Trustee.

            "Supplemental Interest Payment Amount Available": As defined in
Section 7.10(b) hereof.

            "Supplemental Interest Right": As defined in Section 7.10(e) hereof.

            "Supplemental Interest Shortfall Amount": As defined in Section
7.10(b) hereof.

            "Supplemental Interest Shortfall Carry-Forward Amount": With respect
to any Payment Date and the Class A-7 Certificates, the sum of (x) the amount,
if any, by which (i) the sum of (A) the Supplemental Interest Shortfall Amount
as of the immediately preceding Payment Date and (B) any unpaid Supplemental
Interest Shortfalls, as calculated up through the previous Payment Date and
outstanding on such immediately preceding Payment Date, exceeds (ii) the amount
of the actual distributions made on account of each Supplemental Interest Right
on such immediately preceding Payment Date and (y) interest on such amount at
the related Formula Pass-Through Rate calculated on the basis of the actual
number of days in the related Accrual Period.

                                       34
<PAGE>   41
            "Supplemental Interest Trust": The Advanta Supplemental Interest
Trust 2000-1 created pursuant to Section 7.10(a) hereof.

            "Tax Matters Person": The Tax Matters Person appointed pursuant to
Section 11.17 hereof.

            "Tax Matters Person Residual Interest": The 100% interest in the
Class R-I Certificate and the Class R-II Certificate, each of which shall be
issued to and held by the Designated Residual Owner or certain affiliates
throughout the term hereof unless another person that is not a Disqualified
Organization shall accept an assignment of such interest and the designation of
Tax Matters Person pursuant to Section 11.17 hereof.

            "Termination Notice": As defined in Section 9.03(b) hereof.

            "Termination Price": As defined in Section 9.02(a) hereof.

            "Total Available Funds": With respect to any Payment Date, the sum
of the Group I Available Funds and the Group II Available Funds.

            "Transaction Documents": Collectively this Agreement, the Insurance
Agreement, the Underwriting Agreement relating to the Offered Certificates, the
Mortgage Loan Transfer Agreement, any Sub-Servicing Agreement, the
Indemnification Agreement, any Subsequent Transfer Agreements, the Registration
Statement relating to the Offered Certificates and the Certificates.

            "Trust": Advanta Mortgage Loan Trust 2000-1, the trust created under
this Agreement.

            "Trust Estate": Collectively, all money, instruments and other
property, to the extent such money, instruments and other property are subject
or intended to be held in trust, and in the subtrusts, for the benefit of the
Owners, including all proceeds thereof, including, without limitation, (i) the
Mortgage Loans, (ii) such amounts in all Accounts including principal collected
and interest accrued in respect of the related Mortgage Loans on or after the
Initial Cut-Off Date, each Subsequent Cut-Off date and each Replacement Cut-Off
Date, as applicable, including Eligible Investments, as may from time to time
may be held in such Accounts (except any premium recapture and interest accrued
prior to the Initial Cut-Off Date, each Subsequent Cut-Off Date and each
Replacement Cut-Off Date, as applicable and except for net investment earnings
on the Principal and Interest Account, the Capitalized Interest Account and the
Certificate Account), (iii) any Property, the ownership of which has been
effected on behalf of the Trust as a result of foreclosure or acceptance by the
Master Servicer of a deed in lieu of foreclosure and that has not been withdrawn
from the Trust, (iv) any Mortgage Insurance Policies relating to the Mortgage
Loans and any rights of the Sponsor or any Originator under any Mortgage
Insurance Policies, (v) Net Liquidation Proceeds with respect to any Liquidated
Loan, (vi) the rights of the Trustee under the Certificate Insurance Policy, and
(vii) the rights of the Sponsor against any Originator pursuant to the related
Mortgage Loan Transfer Agreement.

                                       35
<PAGE>   42
            "Trustee": Bankers Trust Company of California, N.A., located on the
date of execution of this Agreement at 1761 East St. Andrew Place, Santa Ana,
California 92705, a national banking association, not in its individual capacity
but solely as Trustee under this Agreement, and any successor hereunder.

            "Trustee's Fees": With respect to any Payment Date and Mortgage Loan
Group, the product of (x) one-twelfth of the Trustee Fee Rate and (y) the sum of
(i) the aggregate Loan Balance of the Mortgage Loans in the related Mortgage
Loan Group as of the beginning of the related Remittance Period and (ii) the
Pre-Funded Amount for the related Mortgage Loan Group as of the beginning of the
related Remittance Period.

            "Trustee Fee Rate": 0.90 bps per annum.

            "Uncertificated Interest": As defined in Section 2.08(b) hereof.

            "Underwriters": Morgan Stanley & Co. Incorporated, Bear, Stearns &
Co. Inc., Salomon Smith Barney Inc. and Prudential Securities Incorporated.

            "Upper-Tier REMIC": The REMIC established pursuant to Section 2.08
hereof. The assets of the Upper-Tier REMIC shall be the Lower-Tier REMIC Regular
Interests.

            "Upper-Tier REMIC Regular Interests": As defined in Section 2.08(c)
hereof.

            "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 or any political subdivision thereof (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.

            SECTION 1.02 Use of Words and Phrases. "Herein", "hereby",
"hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words
refer to this Agreement as a whole and not solely to the particular section of
this Agreement in which any such word is used. The definitions set forth in
Section 1.01 hereof include both the singular and the plural. Whenever used in
this Agreement, any pronoun shall be deemed to include both singular and plural
and to cover all genders.

                                       36
<PAGE>   43
         SECTION 1.03 Captions; Table of Contents. The captions or headings in
this Agreement and the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions of this
Agreement.

         SECTION 1.04 Opinions. Each opinion with respect to the validity,
binding nature and enforceability of documents or Certificates may be qualified
to the extent that the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law) and may state that no
opinion is expressed on the availability of the remedy of specific enforcement,
injunctive relief or any other equitable remedy. Any opinion required to be
furnished by any Person hereunder must be delivered by counsel upon whose
opinion the addressee of such opinion may reasonably rely, and such opinion may
state that it is given in reasonable reliance upon an opinion of another, a copy
of which must be attached, concerning the laws of a foreign jurisdiction.

                                   ARTICLE II

                  ESTABLISHMENT AND ORGANIZATION OF THE TRUST

         SECTION 2.01 Establishment of the Trust. The parties hereto do hereby
create and establish, pursuant to the laws of the State of New York and this
Agreement, the Trust, which, for convenience, shall be known as "Advanta
Mortgage Loan Trust 2000-1". Each Mortgage Loan Group shall constitute a
subtrust of the Trust.

         SECTION 2.02 Office. The office of the Trust shall be in care of the
Trustee, addressed to Bankers Trust Company of California, N.A., 1761 East St.
Andrew Place, Santa Ana, California 92705, or at such other address as the
Trustee may designate by notice to the Sponsor, the Master Servicer, the Owners
and the Certificate Insurer.

         SECTION 2.03 Purposes and Powers. The purpose of the Trust is to engage
in the following activities, and only such activities: (i) the issuance of the
Certificates and the acquiring, owning and holding of Mortgage Loans and the
Trust Estate in connection therewith; (ii) activities that are necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto or
connected therewith, including the investment of monies in accordance with this
Agreement; and (iii) such other activities as may be required in connection with
conservation of the Trust Estate and distributions to the Owners; provided,
however, that nothing contained herein shall permit the Trustee to take any
action which would result in the loss of REMIC status for the REMIC Trust.

         SECTION 2.04 Appointment of the Trustee; Declaration of Trust. The
Sponsor hereby appoints the Trustee as trustee of the Trust effective as of the
Startup Day, to have all the rights, powers and duties set forth herein. The
Trustee hereby acknowledges and accepts such appointment, represents and
warrants its eligibility as of the Startup Day to serve as Trustee pursuant to
Section 10.08 hereof and declares that it will hold the Trust Estate in trust
upon and subject to the conditions set forth herein for the benefit of the
Owners and the Certificate Insurer, as their interests may appear.

                                       37
<PAGE>   44
         SECTION 2.05 Expenses of the Trust. Any expenses of the Trust that have
been reviewed and approved by the Sponsor (which approval shall not be
unreasonably withheld), including the reasonable expenses of the Trustee shall
be paid by the Sponsor to the Trustee or to such other Person to whom such
amounts may be due. Failure by the Sponsor to pay any such fees or other
expenses shall not relieve the Trustee of its obligations hereunder. The Trustee
hereby covenants with the Owners that every material contract or other material
agreement entered into by the Trustee on behalf of the Trust shall expressly
state therein that no Owner shall be personally liable in connection with such
contract or agreement.

         SECTION 2.06 Ownership of the Trust. On the Startup Day the ownership
interests in the Trust and the subtrusts shall be transferred as set forth in
Section 4.02 hereof, such transfer to be evidenced by sale of the Certificates
as described therein. Thereafter, transfer of any ownership interest shall be
governed by Sections 5.04 and 5.08 hereof.

         SECTION 2.07 Situs of the Trust. It is the intention of the parties
hereto that the Trust constitute a trust under the laws of the State of New
York. The Trust will be created in, and all Accounts maintained by the Trustee
on behalf of the Trust will be located in, the State of New York. The Trust will
not have any employees and will not have any real or personal property (other
than property acquired pursuant to Section 8.13 hereof) located in any state
other than in the State of New York and payments will be received by the Trust
only in the State of New York and payments from the Trust will be made only from
the State of New York. The Trust's only office will be at the office of the
Trustee as set forth in Section 2.02 hereof.

         SECTION 2.08 Miscellaneous REMIC Provisions. (a) The Trustee shall
elect that each of the Lower-Tier REMIC and the Upper-Tier REMIC shall be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of this Agreement shall
be resolved in a manner that preserves the validity of such REMIC elections. The
assets of the Lower-Tier REMIC shall include the Mortgage Loans, the Accounts
(except for the Non-REMIC Estate), any REO Property, and any proceeds of the
foregoing. The Lower-Tier REMIC Regular Interests (as defined below) shall
constitute the assets of the Upper-Tier REMIC.

         (b) The Lower-Tier REMIC will be evidenced by (x) Lower-Tier Interest
1, Lower-Tier Interest 2, Lower-Tier Interest 3, Lower-Tier Interest 4, and
Lower-Tier Interest 5 (the "Lower-Tier REMIC Regular Interests"), which will be
uncertificated and non-transferable and are hereby designated as the "regular
interests" in the Lower-Tier REMIC and (y) the Lower-Tier REMIC Residual
Interest, which is hereby designated as the single "residual interest" in the
Lower-Tier REMIC (the Lower-Tier REMIC Regular Interests, together with the
Lower-Tier REMIC Residual Interest, the "Lower-Tier REMIC Interests"). The
Lower-Tier REMIC Regular Interests shall be recorded on the records of the
Lower-Tier REMIC as being issued to and held by the Trustee on behalf of the
Upper-Tier REMIC.

                                       38
<PAGE>   45
            Lower-Tier Interest 1 shall have an initial principal balance equal
to one percent of the sum of the initial principal balances of the Group I
Certificates (that is, $3,250,000). Lower-Tier Interest 2 shall have an initial
principal balance equal to one percent of the Group I Original Balance (that is,
$3,267,973). Lower-Tier Interest 3 shall have an initial principal balance equal
to one percent of the initial principal balance of the Class A-7 Certificates
(that is, $750,000). Lower-Tier Interest 4 shall have an initial principal
balance equal to one percent of the Group II Original Balance (that is,
$765,306). Lower-Tier Interest 5 shall have an initial principal balance equal
to the excess of (i) the sum of the Group I Original Balance and the Group II
Original Balance over (ii) the sum of the initial principal balances of
Lower-Tier Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3, and
Lower-Tier Interest 4 (that is, $395,294,718).

            On each Payment Date, principal payments on the Mortgage Loans shall
be allocated 99% to Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier
Interest 5, and 1% to Lower-Tier Interest 1 and Lower-Tier Interest 3 until paid
in full. The aggregate amount of principal allocated to the Lower-Tier Interest
1 and Lower-Tier Interest 3 shall be apportioned between such Interests in the
same manner in which principal on the Mortgage Loans is payable with respect to
the Group I Certificates and the Group II Certificates, respectively. The
aggregate amount of principal allocated to Lower-Tier Interest 2, Lower-Tier
Interest 4 and Lower-Tier Interest 5 shall be allocated and apportioned among
such Interests first, to Lower-Tier Interest 2 and Lower-Tier Interest 4 the
least amount of principal necessary which when applied to such Interests can be
applied so that the ratio of the principal balance of Lower-Tier Interest 2 to
the principal balance of Lower-Tier Interest 4 equals the ratio of the sum of
Loan Balances of the Mortgage Loans in Group I to the sum of the Loan Balances
of the Mortgage Loans in Group II (the "Balance Ratio") and second, to
Lower-Tier Interest 5.

            Any Overcollateralization Increase Amount will not be paid as
interest to the Lower-Tier REMIC Regular Interests, but instead to the extent
available, a portion of the interest payable with respect to Lower-Tier Interest
5 which equals 1% of the Overcollateralization Increase Amount (and, to the
extent 1% of the Overcollateralization Increase Amount exceeds the interest
payable on Lower-Tier Interest 5, a pro rata portion of the interest payable on
the Lower-Tier Interest 2 and Lower-Tier Interest 4 equal to such excess) will
be payable as a reduction of the principal balances of Lower-Tier Interest 1 and
Lower-Tier Interest 3 in the same manner in which the Overcollateralization
Increase Amount is allocated among the Class A-1, A-2, A-3, A-4, A-5, A-6 and
Class A-7 Certificates, respectively (and will be accrued and added to principal
on Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier Interest 5 in the
same proportion as interest payable on such Interests is used to reduce
principal on other Interests as just described).

            Notwithstanding the above, principal payments on the Mortgage Loans
that are attributable to the Overcollateralization Reduction Amount shall be
allocated to Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier
Interest 5 (allocated first to Lower-Tier Interest 5 until such certificates are
paid in full, and second to Lower-Tier Interest 2 and Lower-Tier Interest 4 and
apportioned between Lower-Tier Interest 2 and

                                       39
<PAGE>   46
Lower-Tier Interest 4 in such a manner that the Balance Ratio is maintained
until paid in full).

            Realized Losses shall be applied such that after all distributions
have been made on such Payment Date the principal balances Lower-Tier Interest 1
and Lower-Tier Interest 3 are each 1% of the principal balances of the Group I
Certificates and Group II Certificates, respectively, and the aggregate
principal balance of Lower-Tier Interest 2, Lower-Tier Interest 4 and Lower-Tier
Interest 5 is equal to the sum of the Loan Balances of the Mortgage Loans less
an amount equal to the sum of the principal balances of Lower-Tier Interest 1
and Lower-Tier Interest 3 and is allocated and apportioned first, to Lower-Tier
Interest 2 and Lower-Tier Interest 4 the least amount of Realized Losses
necessary which when applied to such Interests can be applied in such a manner
that the Balance Ratio is maintained, and second, to Lower-Tier Interest 5.

            Lower-Tier Interest 1 and Lower-Tier Interest 2 shall each have
Pass-Through Rates equal to the Group I Net Weighted Average Coupon Rate
(expressed as a per annum rate on the sum of the Loan Balances for Mortgage
Loans in Group I). Lower-Tier Interest 3 and Lower-Tier Interest 4 shall each
have a Pass-Through Rate equal to the Group II Net Weighted Average Coupon Rate
(expressed as a per annum rate on the sum of the Loan Balances for the Mortgage
Loans in Group II). Lower-Tier Interest 5 shall have a Pass-Through Rate equal
to the weighted average of the Group I Net Weighted Average Coupon Rate and the
Group II Net Weighted Average Coupon Rate (expressed as a per annum rate on the
sum of Loan Balances of the Mortgage Loans). The Lower-Tier REMIC Residual
Interest shall have no principal balance and no Pass-Through Rate and shall be
entitled to only those distributable assets, if any, remaining in the Lower-Tier
REMIC on each Payment Date after all amounts required to be distributed to
Lower-Tier Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3, Lower-Tier
Interest 4, and Lower-Tier Interest 5 and applicable Trust expenses have been
paid.

            The Lower-Tier REMIC Interests will have the following designations
and Pass-Through Rates, and distributions of principal and interest thereon
shall be allocated to the Certificates in the following manner:

  Lower-Tier       Initial      Pass-Through  Allocation of   Allocation
REMIC Interests    Balance          Rate        Principal     of Interest
---------------    -------          ----        ---------     -----------
       1         $3,250,000         (1)            (4)            (5)
       2         $3,267,973         (1)            (4)            (5)
       3           $750,000         (2)            (4)            (5)
       4           $765,306         (2)            (4)            (5)
       5        $395,294,718        (3)            (4)            (5)
   Lower-Tier        (6)            (6)            (6)            (6)
   Residual
------------------------
(1)The Pass-Through Rate on these Lower-Tier REMIC Regular Interests shall at
   any time of determination equal the Group I Net Weighted Average Coupon Rate.

(2)The Pass-Through Rate on these Lower-Tier REMIC Regular Interest shall at
   any time of determination equal the Group II Net Weighted Average Coupon
   Rate.

                                       40
<PAGE>   47
(3)The Pass-Through Rate on this Lower-Tier REMIC Regular Interest shall at any
   time of determination equal the weighted average of the Group I Net Weighted
   Average Coupon Rate and the Group II Net Weighted Average Coupon Rate.

(4)Principal will be allocated to and apportioned among the Group I
   Certificates and the Group II Certificates in the same proportion as
   principal from the Mortgage Loans is payable with respect to such
   Certificates, except that a portion of such principal in an amount equal to
   the Overcollateralization Reduction Amount shall first be allocated as a
   payment of interest to the Class B Certificates, and all principal will be
   allocated as a payment of interest to the Class B Certificates after the
   principal balances of the Class A Certificates have been reduced to zero.

(5)Except as provided in the next sentence, interest will be allocated among
   the Group I Certificates and Group II Certificates in the same proportion as
   interest is payable on such Certificates.

   Any interest with respect to each Lower-Tier REMIC Regular Interest in excess
   of the product of (i) 100 times the weighted average coupon of Lower-Tier
   Interest 1, Lower-Tier Interest 2, Lower-Tier Interest 3, Lower-Tier Interest
   4 and Lower-Tier Interest 5, where Lower-Tier Interest 1 and Lower-Tier
   Interest 3 are first subject to a cap and floor equal to the weighted average
   of the Class A-1, A-2, A-3, A-4, A-5 and A-6 Pass-Through Rates and the Class
   A-7 Pass-Through Rate, respectively, and Lower-Tier Interest 2, Lower-Tier
   Interest 4 and Lower-Tier Interest 5 are each subject to a cap equal to 0%,
   and (ii) the principal balance of each such Lower-Tier Interest, shall not be
   allocated to the Class A Certificates but will be allocated to the Class B
   Certificates. However, the Class B Certificates shall be subordinated to the
   extent provided in Section 7.05. hereof.

(6)On each Distribution Date, available funds, if any, remaining in the
   Lower-Tier REMIC after payments of interest and principal, as designated
   above, will be distributed to the Lower-Tier Residual Interest. It is
   expected that there shall not be any distributions on the Lower-Tier Residual
   Interest.

         (c) The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7 and Class B Certificates are hereby designated as "regular
interests" with respect to the Upper-Tier REMIC (the "Upper-Tier REMIC Regular
Interests") and the Class R-II Certificate is hereby designated as the single
"residual interest" with respect to the Upper-Tier REMIC. On each Payment Date,
available funds, if any, remaining in the Upper-Tier REMIC after payments of
interest and principal as designated herein shall be distributed to the Class
R-II Certificates.

         (d) For federal income tax purposes, the "latest possible maturity
date" for each of the Lower-Tier REMIC Regular Interests and Upper-Tier REMIC
Regular Interests is hereby set to be the Payment Date of June 25, 2030.

         (e) The Trust and each REMIC shall, for federal income tax purposes,
maintain books on a calendar year basis and report income on an accrual basis.

         (f) The final scheduled Payment Date for any Class of Certificates is
hereby established as follows:

                                       41
<PAGE>   48
                       CLASS FINAL SCHEDULED PAYMENT DATES

                                     Final Scheduled
                        Class          Payment Date
                        -----          ------------
                         A-1        November 25, 2013
                         A-2        November 25, 2017
                         A-3        December 25, 2020
                         A-4          March 25, 2028
                         A-5           May 25, 2030
                         A-6        November 25, 2029
                         A-7          June 25, 2030
                          B           June 25, 2030

                                  ARTICLE III

                    REPRESENTATIONS, WARRANTIES AND COVENANTS
                     OF THE SPONSOR AND THE MASTER SERVICER;
                  COVENANT OF SPONSOR TO CONVEY MORTGAGE LOANS

         SECTION 3.01 Representations and Warranties of the Sponsor. The Sponsor
hereby represents, warrants and covenants to the Trustee, the Certificate
Insurer and to the Owners as of the Startup Day that:

                  (a) The Sponsor is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Nevada and
         is in good standing as a foreign corporation in each jurisdiction in
         which the nature of its business, or the properties owned or leased by
         it make such qualification necessary. The Sponsor has all requisite
         corporate power and authority to own and operate its properties, to
         carry out its business as presently conducted and as proposed to be
         conducted and to enter into and discharge its obligations under this
         Agreement and the other Operative Documents to which it is a party.

                  (b) The execution and delivery of this Agreement and the other
         Operative Documents to which the Sponsor is a party by the Sponsor and
         its performance and compliance with the terms of this Agreement and of
         the other Operative Documents to which it is a party have been duly
         authorized by all necessary corporate action on the part of the Sponsor
         and will not violate the Sponsor's Articles of Incorporation 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 contract, agreement or other instrument to
         which the Sponsor is a party or by which the Sponsor is bound, or
         violate any statute or any order, rule or regulation of any court,
         governmental agency or body or other tribunal having jurisdiction over
         the Sponsor or any of its properties.

                                       42
<PAGE>   49
                  (c) This Agreement and the other Operative Documents to which
         the Sponsor is a party, assuming due authorization, execution and
         delivery by the other parties hereto and thereto, each constitutes a
         valid, legal and binding obligation of the Sponsor, enforceable against
         it in accordance with the terms hereof and thereof, except as the
         enforcement hereof and thereof may be limited by applicable bankruptcy,
         insolvency, reorganization, moratorium or other similar laws affecting
         creditors' rights generally and by general principles of equity
         (whether considered in a proceeding or action in equity or at law).

                  (d) The Sponsor is not in default with respect to any order or
         decree of any court or any order, regulation or demand of any federal,
         state, municipal or governmental agency, which might have consequences
         that would materially and adversely affect the condition (financial or
         other) or operations of the Sponsor or its properties or might have
         consequences that would materially and adversely affect its performance
         hereunder and under the other Operative Documents to which it is a
         party.

                  (e) No litigation is pending or, to the best of the Sponsor's
         knowledge, threatened against the Sponsor which litigation might have
         consequences that would prohibit its entering into this Agreement or
         any other Operative Document to which it is a party or might have
         consequences that would materially and adversely affect its performance
         hereunder and under the other Operative Documents to which it is a
         party.

                  (f) No certificate of an officer, statement furnished in
         writing or report delivered pursuant to the terms hereof by the Sponsor
         contains any untrue statement of a material fact or omits to state any
         material fact necessary to make the certificate, statement or report
         not misleading.

                  (g) The statements contained in the Registration Statement
         which describe the Sponsor or matters or activities for which the
         Sponsor is responsible in accordance with the Operative Documents or
         which are attributed to the Sponsor therein are true and correct in all
         material respects, and the Registration Statement does not contain any
         untrue statement of a material fact with respect to the Sponsor or omit
         to state a material fact required to be stated therein or necessary in
         order to make the statements contained therein with respect to the
         Sponsor not misleading. To the best of the Sponsor's knowledge and
         belief, the Registration Statement does not contain any untrue
         statement of a material fact required to be stated therein or omit to
         state any material fact required to be stated therein or necessary to
         make the statements contained therein not misleading.

                  (h) All actions, approvals, consents, waivers, exemptions,
         variances, franchises, orders, permits, authorizations, rights and
         licenses required to be taken, given or obtained, as the case may be,
         by or from any federal, state or other governmental authority or agency
         (other than any such actions, approvals, etc. under any state
         securities laws, real estate syndication or "Blue Sky" statutes, as to
         which the Sponsor makes no such representation or warranty), that are

                                       43
<PAGE>   50
         necessary or advisable in connection with the purchase and sale of the
         Certificates and the execution and delivery by the Sponsor of the
         Operative Documents to which it is a party, have been duly taken, given
         or obtained, as the case may be, are in full force and effect on the
         date hereof, are not subject and are not reasonably expected to be
         subject to any pending proceedings or appeals (administrative, judicial
         or otherwise) and either the time within which any appeal therefrom may
         be taken or review thereof may be obtained has expired or no review
         thereof may be obtained or appeal therefrom taken, and are adequate to
         authorize the consummation of the transactions contemplated by this
         Agreement and the other Operative Documents on the part of the Sponsor
         and the performance by the Sponsor of its obligations under this
         Agreement and such of the other Operative Documents to which it is a
         party.

                  (i) The transactions contemplated by this Agreement are in the
         ordinary course of business of the Sponsor.

                  (j) The Sponsor received fair consideration and reasonably
         equivalent value in exchange for the sale of the interests in the
         Mortgage Loans evidenced by the Certificates.

                  (k) The Sponsor did not sell any interest in any Mortgage Loan
         evidenced by the Certificates with any intent to hinder, delay or
         defraud any of its respective creditors.

                  (l) The Sponsor is solvent and the Sponsor will not be
         rendered insolvent as a result of the sale of the Mortgage Loans to the
         Trust or the issuance of the Certificates.

                  (m) It is understood and agreed that the representations and
         warranties set forth in this Section 3.01 shall survive delivery of the
         Mortgage Loans to the Trust.

         SECTION 3.02 Representations and Warranties of the Master Servicer. The
Master Servicer hereby represents, warrants and covenants to the Trustee, the
Certificate Insurer and the Owners as of the Startup Day that:

                  (a) The Master Servicer is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware, is, and each Sub-Servicer is, in compliance with the laws of
         each state in which any Property is located to the extent necessary to
         enable it to perform its obligations hereunder and is in good standing
         as a foreign corporation in each jurisdiction in which the nature of
         its business, or the properties owned or leased by it make such
         qualification necessary. The Master Servicer and each Sub-Servicer has
         all requisite corporate power and authority to own and operate its
         properties, to carry out its business as presently conducted and as
         proposed to be conducted and to enter into and discharge its
         obligations under this Agreement and the other Operative Documents to
         which it is a party. The Master Servicer has, on a

                                       44
<PAGE>   51
         consolidated basis with its ultimate consolidating parent equity of at
         least $5,000,000, as determined in accordance with generally accepted
         accounting principles or Advanta National Bank has an amount of
         shareholder's equity of at least $25,000,000.

                  (b) The execution and delivery of this Agreement by the Master
         Servicer and its performance and compliance with the terms of this
         Agreement and the other Operative Documents to which it is a party have
         been duly authorized by all necessary corporate action on the part of
         the Master Servicer and will not violate the Master Servicer's Articles
         of Incorporation 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 contract, agreement or
         other instrument to which the Master Servicer is a party or by which
         the Master Servicer is bound or violate any statute or any order, rule
         or regulation of any court, governmental agency or body or other
         tribunal having jurisdiction over the Master Servicer or any of its
         properties.

                  (c) This Agreement and the other Operative Documents to which
         the Master Servicer is a party, assuming due authorization, execution
         and delivery by the other parties hereto and thereto, each constitutes
         a valid, legal and binding obligation of the Master Servicer,
         enforceable against it in accordance with the terms hereof, except as
         the enforcement hereof may be limited by applicable bankruptcy,
         insolvency, reorganization, moratorium or other similar laws affecting
         creditors' rights generally and by general principles of equity
         (whether considered in a proceeding or action in equity or at law).

                  (d) The Master Servicer is not in default with respect to any
         order or decree of any court or any order, regulation or demand of any
         federal, state, municipal or governmental agency, which might have
         consequences that would materially and adversely affect the condition
         (financial or other) or operations of the Master Servicer or its
         properties or might have consequences that would materially and
         adversely affect its performance hereunder and under the other
         Operative Documents to which the Master Servicer is a party.

                  (e) No litigation is pending or, to the best of the Master
         Servicer's knowledge, threatened against the Master Servicer which
         litigation might have consequences that would prohibit its entering
         into this Agreement or any other Operative Document to which it is a
         party or might have consequences that would materially and adversely
         affect its performance hereunder and under the other Operative
         Documents to which the Master Servicer is a party.

                  (f) No certificate of an officer, statement furnished in
         writing or report delivered pursuant to the terms hereof by the Master
         Servicer contains any untrue statement of a material fact or omits to
         state any material fact necessary to make the certificate, statement or
         report not misleading.

                                       45
<PAGE>   52
                  (g) The statements contained in the Registration Statement
         which describe the Master Servicer or matters or activities for which
         the Master Servicer is responsible in accordance with the Operative
         Documents or which are attributed to the Master Servicer therein are
         true and correct in all material respects, and the Registration
         Statement does not contain any untrue statement of a material fact with
         respect to the Master Servicer or omit to state a material fact
         required to be stated therein or necessary to make the statements
         contained therein with respect to the Master Servicer not misleading.
         To the best of the Master Servicer's knowledge and belief, the
         Registration Statement does not contain any untrue statement of a
         material fact or omit to state any material fact required to be stated
         therein or necessary to make the statements contained therein not
         misleading.

                  (h) All actions, approvals, consents, waivers, exemptions,
         variances, franchises, orders, permits, authorizations, rights and
         licenses required to be taken, given or obtained, as the case may be,
         by or from any federal, state or other governmental authority or agency
         (other than any such actions, approvals, etc. under any state
         securities laws, real estate syndication or "Blue Sky" statutes, as to
         which the Master Servicer makes no such representation or warranty),
         that are necessary or advisable in connection with the execution and
         delivery by the Master Servicer of the Operative Documents to which it
         is a party, have been duly taken, given or obtained, as the case may
         be, are in full force and effect on the date hereof, are not reasonably
         expected to be subject to any pending proceedings or appeals
         (administrative, judicial or otherwise) and either the time within
         which any appeal therefrom may be taken or review thereof may be
         obtained has expired or no review thereof may be obtained or appeal
         therefrom taken, and are adequate to authorize the consummation of the
         transactions contemplated by this Agreement and the other Operative
         Documents on the part of the Master Servicer and the performance by the
         Master Servicer of its obligations under this Agreement and such of the
         other Operative Documents to which it is a party.

                  (i) The collection practices used by the Master Servicer with
         respect to the Mortgage Loans directly serviced by it have been, in all
         material respects, legal, proper, prudent and customary in the mortgage
         loan servicing business.

                  (j) The transactions contemplated by this Agreement are in the
         ordinary course of business of the Master Servicer.

                  (k) The terms of each existing Sub-Servicing Agreement are
         acceptable to the Master Servicer and any new Sub-Servicing Agreements
         or Sub-Servicers will comply with the provisions of Section 8.03.

            It is understood and agreed that the representations and warranties
set forth in this Section 3.02 shall survive delivery of the Mortgage Loans to
the Trustee.

            Upon discovery by any of the Originators, the Master Servicer, the
Sponsor, any Sub-Servicer, the Certificate Insurer or the Trustee of a breach of
any of the

                                       46
<PAGE>   53
representations and warranties set forth in this Section 3.02 which materially
and adversely affects the interests of the Owners or of the Certificate Insurer,
the party discovering such breach shall give prompt written notice to the other
parties. Within 30 days of its discovery or its receipt of notice of breach, the
Master Servicer shall cure such breach in all material respects and, upon the
Master Servicer's continued failure to cure such breach, may thereafter be
removed by the Trustee or the Certificate Insurer pursuant to Section 8.20
hereof; provided, however, that if the Master Servicer can demonstrate to the
reasonable satisfaction of the Certificate Insurer and the Trustee that it is
diligently pursuing remedial action, then the cure period may be extended with
the written approval of the Certificate Insurer and the Trustee.

                  SECTION 3.03 Representations and Warranties of the Sponsor
with Respect to the Mortgage Loans. (a) The Sponsor makes the following
representations and warranties as to the Mortgage Loans on which the Certificate
Insurer relies and the Trustee relies in accepting the Mortgage Loans in trust
and executing and authenticating the Certificates. Such representations and
warranties speak as of the Startup Day with respect to the Initial Mortgage
Loans, as of the Subsequent Transfer Date with respect to any Subsequent
Mortgage Loan, or as of the date upon which any Qualified Replacement Mortgage
is added to the Trust, but shall survive the sale, transfer, and assignment of
the Mortgage Loans to the Trustee:

                  (i) The information with respect to each Mortgage Loan set
         forth in the Schedule of Mortgage Loans is true and correct as of the
         Initial Cut-Off Date, the Replacement Cut-Off Date or the Subsequent
         Cut-Off Date, as the case may be;

                  (ii) All of the original or certified documentation set forth
         in Section 3.05(c) (including all material documents related thereto)
         with respect to each Mortgage Loan has been or will be delivered to the
         Trustee no later than the Startup Day, the related Subsequent Transfer
         Date or the date upon which any Qualified Replacement Mortgage is added
         to the Trust, as the case may be, or as otherwise provided in Section
         3.05(c);

                  (iii) Each Mortgage Loan is being serviced by the Master
         Servicer or Master Servicer Affiliate;

                  (iv) As of the Initial Cut-Off Date, no more than 1.15% of the
         aggregate principal balances of the Initial Mortgage Loans are 30-59
         days Delinquent and no Initial Mortgage Loan is 60 or more days'
         Delinquent;

                  (v) All of the Mortgage Loans conform, in all material
         respects, to the description thereof set forth in the Registration
         Statement;

                  (vi) The credit underwriting guidelines applicable to each
         Mortgage Loan conform in all material respects to the description
         thereof set forth in the Prospectus; and

                  (vii) Each Mortgage Loan is a Qualified Mortgage.

                                       47
<PAGE>   54
                  (b) The Sponsor hereby assigns to the Trustee for the benefit
of the Owners of the Certificates and the Certificate Insurer (so long as a
Certificate Insurer Default had not occurred and is continuing) all of its
right, title and interest in respect of the Mortgage Loan Transfer Agreement.
Insofar as the Mortgage Loan Transfer Agreement provides for representations and
warranties made by the related Originator in respect of a Mortgage Loan and any
remedies provided thereunder for any breach of such representations and
warranties, such right, title and interest may be enforced by the Master
Servicer or by the Trustee on behalf of the Owners and the Certificate Insurer.
Upon the discovery by the Sponsor, the Master Servicer, the Certificate Insurer
or the Trustee of a breach of any of the representations and warranties made in
the Mortgage Loan Transfer Agreement in respect of any Mortgage Loan which
materially and adversely affects the interests of the Owners or of the
Certificate Insurer in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties. The Master Servicer shall
promptly notify the related Originator of such breach and request that such
Originator cure such breach or take the actions described in Section 3.04(b)
hereof within the time periods required thereby, and if such Originator does not
cure such breach in all material respects, the Sponsor shall cure such breach or
take such actions. The obligations of the Sponsor or Master Servicer, as the
case may be, set forth herein with respect to any Mortgage Loan as to which such
a breach has occurred and is continuing shall constitute the sole obligations of
the Master Servicer and of the Sponsor in respect of such breach.

                  SECTION 3.04 Covenants of Sponsor to Take Certain Actions with
Respect to the Mortgage Loans in Certain Situations. (a) With the provisos and
limitations as to remedies set forth in this Section 3.04, upon the discovery by
any Originator, the Sponsor, the Master Servicer, the Certificate Insurer, any
Sub-Servicer or the Trustee that the representations and warranties set forth in
Section 3.03 of this Agreement or in the Mortgage Loan Transfer Agreement were
untrue in any material respect as of the Startup Day (or the Subsequent Transfer
Date, as the case may be) and such breaches of the representations and
warranties materially and adversely affect the interests of the Owners or of the
Certificate Insurer, the party discovering such breach shall give prompt written
notice to the other parties.

            The Sponsor acknowledges that a breach of any representation or
warranty (x) relating to marketability of title sufficient to transfer
unencumbered title to a Mortgage Loan, (y) relating to enforceability of the
Mortgage Loan against the related Mortgagor or Property or (z) set forth in
clause (vii) of Section 3.03(a) above constitutes breach of a representation or
warranty which materially and adversely affects the interests of the Owners or
of the Certificate Insurer in such Mortgage Loan.

                  (b) Upon the earliest to occur of the Sponsor's discovery, its
receipt of notice of breach from any one of the other parties hereto or from the
Certificate Insurer or such time as a breach of any representation and warranty
materially and adversely affects the interests of the Owners or of the
Certificate Insurer as set forth above, the Sponsor hereby covenants and
warrants that it shall promptly cure such breach in all material respects or it
shall (or shall cause an affiliate of the Sponsor or an Originator to), subject
to the further requirements of this paragraph, on the second Remittance Date
next

                                       48
<PAGE>   55
succeeding such discovery or receipt of notice (i) substitute in lieu of each
Mortgage Loan in the related Mortgage Loan Group which has given rise to the
requirement for action by the Sponsor a Qualified Replacement Mortgage and
deliver the Substitution Amount applicable thereto, together with the aggregate
amount of all Delinquency Advances and Servicing Advances theretofore made with
respect to such Mortgage Loan and not previously reimbursed to the Master
Servicer for deposit in the Principal and Interest Account or (ii) purchase such
Mortgage Loan from the REMIC Trust at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be delivered to the Master
Servicer for deposit in the Principal and Interest Account. In connection with
any such proposed purchase or substitution, the Sponsor at its expense, shall
cause to be delivered to the Trustee and the Certificate Insurer an opinion of
counsel experienced in federal income tax matters stating whether or not such a
proposed purchase or substitution would constitute a Prohibited Transaction for
the REMIC Trust or would jeopardize the status of the REMIC Trust as a REMIC,
and the Sponsor shall only be required to take either such action to the extent
such action would not constitute a Prohibited Transaction for the REMIC Trust or
would not jeopardize the status of the REMIC Trust as a REMIC. Any required
purchase or substitution, if delayed by the absence of such opinion shall
nonetheless occur upon the earlier of (i) the occurrence of a default or
imminent default with respect to the Mortgage Loan, (ii) the delivery of such
opinion or (iii) at the direction of the Control Party. It is understood and
agreed that the obligation of the Sponsor to cure the defect, or substitute for,
or purchase any Mortgage Loan as to which a representation or warranty is untrue
in any material respect and has not been remedied shall constitute the sole
remedy available to the Owners, the Trustee and the Certificate Insurer.

                  (c) In the event that any Qualified Replacement Mortgage is
delivered by an Originator or by the Sponsor (or by an affiliate of the Sponsor,
as the case may be) to the Trust pursuant to Sections 3.03, 3.04 or 3.06 hereof,
the related Originator and the Sponsor shall be obligated to take the actions
described in Section 3.04(b) with respect to such Qualified Replacement Mortgage
upon the discovery by any of the Owners, the Sponsor, the Master Servicer, the
Certificate Insurer, any Sub-Servicer or the Trustee that the representations
and warranties set forth in the Mortgage Loan Transfer Agreement or in Section
3.03 above are untrue in any material respect on the date such Qualified
Replacement Mortgage is conveyed to the Trust such that the interests of the
Owners or the Certificate Insurer in the related Qualified Replacement Mortgage
are materially and adversely affected.

                  (d) In the event that any Qualified Replacement Mortgage is
delivered to the Trust, such Qualified Replacement Mortgage must be a Mortgage
Loan which: (i) bears a fixed rate of interest if the Mortgage Loan being
replaced is in Group I and bears an adjustable rate of interest if the Mortgage
Loan to be replaced is in Group II, (ii) has a Coupon Rate at least equal to the
Coupon Rate of the Mortgage Loan being replaced, (which, in the case of a
Mortgage Loan in Group II, shall mean a Mortgage Loan having the same interest
rate index, a margin over such index and a maximum interest rate equal to or
greater than those applicable to the Mortgage Loan being replaced), (iii) is of
the same or better property type and the same or better occupancy status as the
replaced Mortgage Loan, (iv) shall be of the same or better credit quality

                                       49
<PAGE>   56
classification (determined in accordance with the Originators' credit
underwriting guidelines) as the Mortgage Loan being replaced, (v) shall mature
no later than July 31, 2030, (vi) has a Combined Loan-to-Value Ratio as of the
Replacement Cut-Off Date no higher than the Combined Loan-to-Value Ratio of the
replaced Mortgage Loan at such time, (vii) has a Loan Balance as of the related
Replacement Cut-Off Date equal to or less than the Loan Balance of the replaced
Mortgage Loans as of such Replacement Cut-Off Date, (viii) satisfies all of the
representations and warranties set forth in Section 3.03 and the criteria set
forth from time to time in the definition thereof at Section 860G(a)(4) of the
Code (or any successor statute thereto) and applicable to the Trust, all as
evidenced by an Officer's Certificate of the Sponsor delivered to the
Certificate Insurer, the Sponsor and the Trustee prior to any such substitution
and (ix) is a valid First Mortgage Loan if the Mortgage Loan to be substituted
for is a valid First Mortgage Loan or, Junior Mortgage Loan of equal or better
priority if the Mortgage Loan to be substituted for is a Junior Mortgage Loan.
In the event that one or more mortgage loans are proposed to be substituted for
one or more mortgage loans, the Certificate Insurer may allow the foregoing
tests to be met on a weighted average basis with respect to the Mortgage Loans
only or other aggregate basis acceptable to the Certificate Insurer, as
evidenced by a written consent delivered to the Trustee by the Certificate
Insurer, except that the requirement of clause (viii) of this Section 3.04(d)
must be satisfied as to each Qualified Replacement Mortgage.

                  (e) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage therefor, the
Trustee will transfer, sell, assign, set over and otherwise convey without
recourse, all of its right, title and interest in and to such released Mortgage
Loan and all the Trust's right, title and interest to principal collected and
interest accruing on such released Mortgage Loan on and after the applicable
Replacement Cut-Off Date; provided, however, that the Trust shall reserve and
retain all right, title and interest in and to payments of principal collected
and accrued interest on such released Mortgage Loan prior to the applicable
Replacement Cut-Off Date.

                  (f) In connection with any transfer and assignment of a
Qualified Replacement Mortgage to the Trustee on behalf of the Trust, the
Sponsor agrees to cause to be delivered to the Trustee the items described in
Section 3.05(c) on the date of such transfer and assignment or, if a later
delivery time is permitted by Section 3.05(c), then no later than such later
delivery time.

                  (g) As to each Mortgage Loan released from the Trust in
connection with the conveyance of a Qualified Replacement Mortgage the Trustee
shall deliver, on the date of conveyance of such Qualified Replacement Mortgage,
on the order of the Sponsor (i) the original Note, or the certified copy,
relating thereto, endorsed without recourse, to the Sponsor and (ii) such other
documents as constituted the Mortgage File with respect thereto.

                  (h) The Sponsor shall, in connection with the delivery of each
Qualified Replacement Mortgage to the Trustee, provide the Trustee with the
information

                                       50
<PAGE>   57
set forth in the Schedules of Mortgage Loans with respect to such Qualified
Replacement Mortgage.

                  (i) It is understood and agreed that the covenants set forth
in this Section 3.04 shall survive delivery of the respective Mortgage Loans
(including Qualified Replacement Mortgages) to the Trustee.

                  SECTION 3.05 Conveyance of the Mortgage Loans. (a) The
Sponsor, concurrently with the execution and delivery hereof, hereby transfers,
sells, assigns, sets over and otherwise conveys, or shall request or cause to be
transferred, sold, assigned, set over and otherwise conveyed, without recourse,
for good and valuable consideration, to the Trustee, all right, title and
interest of the Sponsor in and to each Initial Mortgage Loan, including all
right, title and interest in and to principal collected and interest accruing on
each such Initial Mortgage Loan on and after the Initial Cut-Off Date and all
right, title and interest in and to all Mortgage Insurance Policies and any
other assets included or to be included in the Trust for the benefit of Owners
and the Certificate Insurer. The transfer of the Initial Mortgage Loans set
forth on the Schedule of Mortgage Loans to the Trustee is absolute and is
intended by the Owners and all parties hereto to be treated as a sale by the
Sponsor.

                  (b) The Sponsor agrees to take or cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Owners' and the Certificate Insurer's interests in each Mortgage Loan and the
proceeds thereof (including, without limitation, the filing of all necessary
continuation statements for the UCC-1 financing statements filed in the
appropriate jurisdictions (which shall have been filed within 90 days of the
Startup Day or the Subsequent Transfer Date, as the case may be)) and to file in
the appropriate jurisdictions any amendments to UCC-1 financing statements
required to reflect a change in the name or corporate structure of the debtor or
the filing of any additional UCC-1 financing statements due to a change in the
principal office of the debtor (within 90 days of any event necessitating such
filing).

                  (c) In connection with the transfer and assignment of the
Mortgage Loans, the Sponsor agrees to:

                  (i) cause to be delivered to the Trustee, without recourse, no
         later than the Startup Day or any Subsequent Transfer Date or date on
         which a Qualified Replacement Mortgage is transferred, as applicable,
         the items listed in the definition of "Mortgage Files"; provided, that
         the assignments of mortgage listed in such definition shall be
         delivered to the Trustee within 75 Business Days of the Startup Day,
         any Subsequent Transfer Date or date on which a Qualified Replacement
         Mortgage is transferred, as applicable.

                  (ii) cause, within 75 Business Days following the Startup Day,
         any Subsequent Transfer Date or date on which a Qualified Replacement
         Mortgage is transferred, as applicable, the assignments of Mortgage to
         be submitted for recording in the appropriate jurisdictions wherein
         such recordation is necessary to perfect the lien thereof as against
         creditors of or purchasers from the related

                                       51
<PAGE>   58
         Originator to the Trustee; provided, however, that, for administrative
         convenience and facilitation of servicing and to reduce closing costs,
         assignments of mortgage shall not be required to be submitted for
         recording with respect to any Mortgage Loan only if the Trustee, the
         Certificate Insurer and each Rating Agency has received an Opinion of
         Counsel, satisfactory in form and substance to the Certificate Insurer
         and 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.

                  All recording required pursuant to this Section 3.05 shall be
accomplished at the expense of the Originators or of the Sponsor.
Notwithstanding anything to the contrary contained in this Section 3.05, in
those instances where the public recording office retains the original Mortgage,
the assignment of a Mortgage or the intervening assignments of the Mortgage
after it has been recorded, the Sponsor shall be deemed to have satisfied its
obligations hereunder upon delivery to the Trustee of a copy of such Mortgage,
such assignment or assignments of Mortgage certified by the public recording
office to be a true copy of the recorded original thereof.

                  Copies of all Mortgage assignments received by the Trustee
shall be kept in the related Mortgage File.

                  Such assignments of mortgage shall, in addition to the
requirements specified in the definition of "Mortgage Files", be in recordable
form. On or before the Startup Day, any Subsequent Transfer Date or date on
which a Qualified Replacement Mortgage is transferred, as applicable, the
Sponsor shall deliver to the Trustee an original executed power of attorney,
from the current recordholders of the related Mortgage substantially in the form
of Exhibit H, authorizing the Master Servicer on behalf of the Trustee to record
the assignments of mortgage as provided in clause (ii) of this Section 3.05(c).
Pursuant to such power of attorney, the Trustee also may execute a new
assignment of mortgage for any Mortgage Loan if the original assignment of
mortgage delivered by the Sponsor to the Trustee is not in recordable form at
such time as the assignment of mortgage is to be recorded by the Trustee.

                  (d) [Reserved]

                  (e) The Sponsor (or any affiliate of the Sponsor) shall
transfer, sell, assign, set over and otherwise convey without recourse, to the
Trustee all right, title and interest of the Sponsor (or of such affiliate) in
and to any Qualified Replacement Mortgage delivered to the Trustee pursuant to
Sections 3.03, 3.04 or 3.06 hereof and all its right, title and interest to
principal collected and interest accruing on such Qualified Replacement Mortgage
on and after the applicable Replacement Cut-Off Date; provided, however, that
the Sponsor (or such affiliate) shall reserve and retain all right, title and
interest in and to payments of principal due and interest accrued on such
Qualified Replacement Mortgage prior to the applicable Replacement Cut-Off Date.

                  (f) If a Mortgage assignment is lost during the process of
recording, or is returned from the recorder's office unrecorded due to a defect
therein, the Sponsor shall

                                       52
<PAGE>   59
prepare a substitute assignment or cure such defect, as the case may be, and
thereafter cause each such assignment to be duly recorded.

                  (g) The Sponsor shall cause to be reflected on the applicable
records that the Mortgage Loans have been sold to the Trust.

                  To the extent that the ratings, if any, then assigned to the
unsecured debt of the Sponsor or of the Sponsor's ultimate corporate parent are
satisfactory to the Control Party, Standard & Poor's and Moody's, then any of
the Document Delivery Requirements described above may be waived by an
instrument signed by the Control Party, Standard & Poor's and Moody's (or any
documents theretofore delivered to the Trustee returned to the Sponsor) on such
terms and subject to such conditions as the Control Party, Standard & Poor's and
Moody's may permit.

                  (h) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans (including all other rights and properties
described in Section 3.05(a) above) to the Trust be construed as a sale of the
Mortgage Loans to the Trust. It is, further, not the intent of the parties that
such conveyance be deemed a pledge of the Mortgage Loans to the Trust to secure
a debt or other obligation of the Sponsor or any of its assignors. However, in
the event and to the extent that, notwithstanding the intent of the parties
hereto, any or all of the Mortgage Loans (including the other rights and
properties described in Section 3.05(a) above) are held to be property of the
Sponsor or any of its assignors, then

                  (i) this Agreement shall also be deemed to be a security
         agreement within the meaning of Article 9 of the New York UCC;

                  (ii) the conveyance provided for herein shall be deemed to be
         a grant by the Sponsor to the Trust of a first priority security
         interest in all of the Sponsor's right, title and interest in and to
         the Mortgage Loans (including the other rights and properties described
         in Section 3.05(a) above) and all amounts payable to the holder of the
         Mortgage Loans and/or such rights or properties 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 all amounts from time to time held or
         invested in any Account, whether in the form of cash, instruments,
         securities or other property;

                  (iii) the possession by the Trustee or its bailees or agents
         of 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 UCC;

                  (iv) 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; and

                                       53
<PAGE>   60
                  (v) the obligations secured by the first priority security
         interest described in clause (iii) above shall be deemed to include any
         and all obligations of the Trust to pay the principal of and interest
         on the Certificates to the Owners and to pay the fees, expenses and
         other amounts required to be paid to the Master Servicer, the Trustee,
         the Certificate Insurer and the Owners, all in accordance with and
         otherwise subject to the Operative Documents.

                  (i) Any assignment or other transfer of the interest of the
Trustee under any provision hereof shall also be deemed to be an assignment of
any security interest created hereby. Each of the Sponsor and the Master
Servicer 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
would be maintained as such throughout the terms of this Agreement. The Sponsor
also covenants not to pledge, assign or grant any security interest to any third
party in any Mortgage Loan conveyed to the Trustee hereunder.

                  (j) Upon the Trustee's or the Certificate Insurer's request,
the Sponsor shall perform (or cause to be performed) such further acts and
execute, acknowledge and deliver (or cause to be executed, acknowledged and
delivered) to the Trustee such further documents as the Trustee or the
Certificate Insurer shall deem necessary or advisable in order to evidence,
establish, maintain, protect, enforce or defend its rights in and to the
Mortgage Loans and other rights and properties transferred hereunder or
otherwise to carry out the intent and accomplish the purposes of this Agreement
(including UCC-1 financing statements naming the Sponsor as debtor and the
Trustee as secured party and any continuation statements relating thereto).

                  SECTION 3.06 Acceptance by Trustee; Certain Substitutions of
Mortgage Loans; Certification by Trustee. (a) The Trustee agrees to execute and
deliver on the Startup Day, on any Subsequent Transfer Date and any day on which
a Qualified Replacement Mortgage is conveyed to the Trust an acknowledgment of
receipt in the form attached as Exhibit D hereto of the Mortgage Files delivered
by the Sponsor, and declares that it will hold such documents and any
amendments, replacement or supplements thereto, as well as any other assets
included in the definition of Trust Estate and delivered to the Trustee, as
Trustee in trust upon and subject to the conditions set forth herein for the
benefit of the Owners and the Certificate Insurer. On or before the tenth
Business Day after the Startup Day, any Subsequent Transfer Date, and any day on
which a Qualified Replacement Mortgage is conveyed to the Trust, the Trustee
shall execute and deliver to the Certificate Insurer and the Master Servicer an
acknowledgment of receipt of the original Notes for each Mortgage Loan.

                  The Trustee further agrees to review any documents delivered
by the Sponsor within 90 days after the Startup Day (or within 90 days with
respect to any Subsequent Mortgage Loan or Qualified Replacement Mortgage after
the assignment thereof) and to deliver to the Sponsor, the Certificate Insurer
and the Master Servicer a Certification in the form attached as Exhibit E
hereto. The Trustee shall be under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates

                                       54
<PAGE>   61
or other papers to determine that they are genuine, enforceable, or appropriate
for the represented purpose or that they are other than what they purport to be
on their face, nor shall the Trustee be under any duty to determine
independently whether there are any intervening assignments or assumption or
modification agreements with respect to any Mortgage Loan.

                  (b) If the Trustee during such 90-day period finds any
document constituting a part of a Mortgage File which (i) is not properly
executed, (ii) has not been received within the specified period, (iii) is
unrelated to the Mortgage Loans identified in the Schedules of Mortgage Loans,
or (iv) that any Mortgage Loan does not conform in a material respect to the
description thereof as set forth in the Schedules of Mortgage Loans, the Trustee
shall promptly so notify the Sponsor and the Certificate Insurer. In performing
any such review, the Trustee may conclusively rely on the Sponsor as to the
purported genuineness of any such document and any signature thereon. The
Sponsor agrees to use reasonable efforts to remedy a material defect in a
document constituting part of a Mortgage File of which it is so notified by the
Trustee. If, however, within 60 days after the Trustee's notice respecting such
defect the Sponsor has not remedied or caused to be remedied the defect and the
defect materially and adversely affects the interest of the Owners or of the
Certificate Insurer in the related Mortgage Loan, the Sponsor will (or will
cause the related Originator or an affiliate of the Sponsor to) on the next
succeeding Remittance Date (i) substitute in lieu of such Mortgage Loan a
Qualified Replacement Mortgage and, deliver the Substitution Amount or (ii)
purchase such Mortgage Loan at a purchase price equal to the Loan Purchase Price
thereof, which purchase price shall be delivered to the Master Servicer for
deposit in the Principal and Interest Account. In connection with any such
proposed purchase or substitution the Sponsor shall cause at the Sponsor's
expense to be delivered to the Trustee and the Certificate Insurer an opinion of
counsel experienced in federal income tax matters stating whether or not such a
proposed purchase or substitution would constitute a Prohibited Transaction for
either the Upper-Tier REMIC or the Lower-Tier REMIC or would jeopardize the
status of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC, and
the Sponsor shall only be required to take either such action to the extent such
action would not constitute a Prohibited Transaction for either the Upper-Tier
REMIC or the Lower-Tier REMIC or would not jeopardize the status of either the
Upper-Tier REMIC or the Lower-Tier as a REMIC. Any required purchase or
substitution, if delayed by the absence of such opinion shall nonetheless occur
upon the earlier of (i) the occurrence of a default or imminent default with
respect to the Mortgage Loan or (ii) the delivery of such opinion or (iii) at
the direction of the Control Party.

                  Upon receipt of any Qualified Replacement Mortgage or of
written notification signed by a Servicing Officer to the effect that the Loan
Purchase Price in respect of such Mortgage Loan has been deposited into the
Principal and Interest Account, then as promptly as practicable, the Trustee
shall execute such documents and instruments of transfer presented by the
Sponsor, in each case without recourse, representation or warranty, and take
such other actions as shall reasonably be requested by the Sponsor to effect
such transfer by the Trust of such Mortgage Loan pursuant to this Section 3.06.
It is understood and agreed that the obligation of the Sponsor to accept a
transfer of a Mortgage Loan and to either convey a Qualified Replacement
Mortgage or

                                       55
<PAGE>   62
to make a deposit of any related Loan Purchase Price into the Principal and
Interest Account shall constitute the sole remedy respecting such defect
available to Owners, the Trustee and the Certificate Insurer against the
Sponsor.

                  The Sponsor, promptly following the transfer of a Mortgage
Loan from or to the Trust pursuant to this Section 3.06, shall deliver an
amended Schedule of Mortgage Loans to the Trustee and the Certificate Insurer
and shall make appropriate entries in its general account records to reflect
such transfer. The Master Servicer shall, following such retransfer,
appropriately mark its records to indicate that it is no longer servicing such
Mortgage Loan on behalf of the Trust.

                  (c) As to any Qualified Replacement Mortgage, the Sponsor
shall deliver to the Trustee with respect to such Qualified Replacement Mortgage
such documents and agreements as are required to be held by the Trustee in
accordance with this Section 3.06. For any Remittance Period during which the
Sponsor substitutes one or more Qualified Replacement Mortgages, the Master
Servicer shall determine the Substitution Amount, which amount shall be
deposited by the Sponsor in the Principal and Interest Account at the time of
substitution. All amounts received in respect of the Qualified Replacement
Mortgage during the Remittance Period in which the circumstances giving rise to
such substitution occur shall not be a part of the Trust Estate and shall not be
deposited by the Master Servicer in the Principal and Interest Account. All
amounts received by the Master Servicer during the Remittance Period in which
the circumstances giving rise to such substitution occur in respect of any
Mortgage Loan so removed by the Trust Estate shall be deposited by the Master
Servicer in the Principal and Interest Account. Upon such substitution, each
Qualified Replacement Mortgage shall be subject to the terms of this Agreement
in all respects, and the Sponsor shall be deemed (i) to have made with respect
to such Qualified Replacement Mortgage, as of the date of substitution, the
covenants, representations and warranties set forth in Section 3.03 and (ii) to
have certified that such Mortgage Loan(s) is/are Qualified Replacement
Mortgage(s).

                  SECTION 3.07 Cooperation Procedures. The Sponsor, the Master
Servicer and the Trustee covenant to provide each other and to the Certificate
Insurer with all data and information required to be provided by them hereunder
at the times required hereunder, and additionally covenant reasonably to
cooperate with each other in providing any additional information required by
any of them in connection with their respective duties hereunder.

                  SECTION 3.08 Conveyance of the Subsequent Mortgage Loans. (a)
On any Subsequent Transfer Date, subject to the conditions set forth in Section
3.08(b) in consideration of the Trustee's delivery of all or a portion of the
balance of funds in the Pre-Funding Account, the Sponsor shall sell, transfer,
assign, set over and otherwise convey, or shall request or cause the Trust to
acquire from the Sponsor all right, title and interest in and to each Subsequent
Mortgage Loan listed on the Schedule of Mortgage Loans delivered by the Sponsor
to the Trustee on such Subsequent Transfer Date, all right, title and interest
in and to principal collected and interest accrued on each such Subsequent
Mortgage Loan on and after the related Subsequent Cut-Off Date and all

                                       56
<PAGE>   63
right, title and interest in and to all Mortgage Insurance Policies; provided,
however, that the Sponsor reserves and retains all its right, title and interest
in and to principal collected and interest accrued on each such Subsequent
Mortgage Loan prior to the related Subsequent Cut-Off Date. The transfer to the
Trust of the Subsequent Mortgage Loans set forth on the Schedule of Mortgage
Loans shall be absolute and shall be intended by the Sponsor, the Owners and all
parties hereto to be treated as a sale.

                  The amount released from the Pre-Funding Account shall be
equal to the aggregate Loan Balances of the Subsequent Mortgage Loans so
transferred, and in no event shall the Sponsor transfer to the Trust (i) with
respect to Group I, Subsequent Mortgage Loans having an aggregate Loan Balance
in excess of the Group I Original Pre-Funded Amount and (ii) with respect to
Group II, Subsequent Mortgage Loans having an aggregate Loan Balance in excess
of the Group II Original Pre-Funded Amount.

                  (b) The Sponsor shall transfer or cause to be transferred to
the Trust the Subsequent Mortgage Loans and the other property and rights
related thereto described in Section 3.08(a) only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:

                  (i) the Sponsor shall have provided the Trustee, the
         Certificate Insurer, Moody's and Standard & Poor's with an Addition
         Notice and information in an electronic data file with respect to the
         Subsequent Mortgage Loans;

                  (ii) the Sponsor shall have delivered to the Trustee a duly
         executed written assignment (including an acceptance by the Trustee) in
         substantially the form of Exhibit K (the "Subsequent Transfer
         Agreement"), which shall include a Schedule of Mortgage Loans listing
         the Subsequent Mortgage Loans and any other exhibits listed thereon;

                  (iii) prior to the first Remittance Date following the related
         Subsequent Transfer Date, the Sponsor shall have deposited in the
         Principal and Interest Account all principal collected and interest
         accrued (excluding premium recapture and interest accrued prior to the
         related Subsequent Cut-Off Date) in respect of the Subsequent Mortgage
         Loans on or after the related Subsequent Cut-Off Date;

                  (iv) as of each Subsequent Transfer Date, none of the related
         Originators, the Master Servicer or the Sponsor was insolvent nor will
         any of them have been made insolvent by such transfer nor is any of
         them aware of any pending insolvency;

                  (v) such conveyance of Subsequent Mortgage Loans will not
         result in a material adverse tax consequence to the Trust or the Owners
         of the Certificates;

                  (vi) the Pre-Funding Period shall not have terminated;

                  (vii) the Sponsor shall have delivered to the Trustee an
         Officer's Certificate confirming (A) the satisfaction of each condition
         precedent specified in Section 3.08(b), (c) and (d), and in the related
         Subsequent Transfer Agreement

                                       57
<PAGE>   64
         and (B) confirming that (i) neither the sale of the Subsequent Mortgage
         Loans nor the purchase of the Subsequent Mortgage Loans by the Trust
         constitutes a "prohibited transaction", as defined in Section
         860F(a)(2) of the Code, and (ii) the Subsequent Mortgage Loans are
         Qualified Mortgages;

                  (viii) the Rating Agencies, the Certificate Insurer, and the
         Trustee shall have received, Opinions of Counsel with respect to
         certain tax, true sale, and bankruptcy matters related to the transfer
         of the Subsequent Mortgage Loans (which Opinions of Counsel may be
         delivered on the Startup Day); and

                  (ix) the Certificate Insurer shall have approved the
         Subsequent Mortgage Loans to be transferred.

                  (c) The obligation of the Trust to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the following
requirements;

                  (i) no Subsequent Mortgage Loan may be 30 or more days
         Delinquent;

                  (ii) for each Subsequent Mortgage Loan in Group I, as of the
         related Subsequent Transfer Date:

                           (A)      the Coupon Rate is not less than 7.50%;

                           (B)      the final maturity date is not later than
                                    July 31, 2030;

                           (C)      the Combined Loan-to-Value Ratio is not in
                                    excess of 100%; and

                           (D)      the Loan Balance is not in excess of
                                    $500,000;

                  (iii) for each Subsequent Mortgage Loan in Group II, as of the
         related Subsequent Transfer Date:

                           (A)      the applicable margin is not less than
                                    1.75%;

                           (B)      the Coupon Rate is not less than 7.75%;

                           (C)      the final maturity date is not later than
                                    July 31, 2030;

                           (D)      the Combined Loan-to-Value Ratio is not in
                                    excess of 100%; and

                           (E)      the Loan Balance is not in excess of
                                    $400,000;

                  (iv) following the purchase of such Subsequent Mortgage Loans
         by the Trust, the Mortgage Loans in Group I (by the aggregate Loan
         Balance) (including the Subsequent Mortgage Loans):

                                       58
<PAGE>   65
                           (A)      will have a weighted average Coupon Rate of
                                    at least 10.43%;

                           (B)      will have a weighted average Combined
                                    Loan-to-Value Ratio of not more than 77.25%;

                           (C)      will have not more than 0.50%, of Mortgage
                                    Loans that are secured by Properties in any
                                    single zip code;

                           (D)      will have not more than 9.50%, Mortgage
                                    Loans that are secured by Properties in any
                                    single state;

                           (E)      will have at least 92.50% Mortgage Loans
                                    which are First Mortgage Loans,

                           (F)      will have a weighted average FICO score
                                    (excluding Mortgage Loans without scores) of
                                    at least 620;

                           (G)      will have a weighted average remaining term
                                    to scheduled maturity of no more than 275
                                    months; and

                           (H)      will have not more than 42.50% Mortgage
                                    Loans with a Combined Loan-to-Value Ratio of
                                    greater than 80.00%; and

                  (v) following the purchase of the Mortgage Loans in Group II
         (by the aggregate Loan Balance) (including the Subsequent Mortgage
         Loans):

                           (A)      will have a weighted average Coupon Rate of
                                    at least 9.75%;

                           (B)      will have a weighted average margin of at
                                    least 5.45%;

                           (C)      will have a weighted average Loan-to-Value
                                    Ratio of no more than 78.70%;

                           (D)      will not have more than 0.80% by aggregate
                                    principal of Mortgage Loans that are secured
                                    by Properties in any single zip code;

                           (E)      will not have more than 8.00% of Mortgage
                                    Loans that are secured by Properties in a
                                    single state;

                           (F)      100.00% of Mortgage Loans will be First
                                    Mortgage Loans;

                           (G)      will have a weighted average FICO score
                                    (excluding Mortgage Loans without scores) of
                                    at least 610;

                                       59
<PAGE>   66
                           (H)      will have a weighted average remaining term
                                    to scheduled maturity of no more than 346
                                    months; and

                           (I)      will have not more than 45.00% Mortgage
                                    Loans with a Loan-to-Value Ratio of greater
                                    than 80.00%.

                  The Certificate Insurer may waive or modify any of the
requirements in this Section 3.08(c) or specify any additional criteria provided
that any such modification shall not materially and adversely affect the
Sponsor.

                  (d) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Sponsor agrees to satisfy the conditions set
forth in Sections 3.05(b) through (j), 3.06, 3.07 and 3.08(b) and (c).

                                   ARTICLE IV

                        ISSUANCE AND SALE OF CERTIFICATES

                  SECTION 4.01 Issuance of Certificates. On the Startup Day,
upon the Trustee's receipt from the Sponsor of an executed Delivery Order in the
form set forth as Exhibit F hereto, the Trustee shall execute, authenticate and
deliver the Certificates on behalf of the Trust in accordance with the
directions set forth in such Delivery Order.

                  SECTION 4.02 Sale of Certificates. At 11 a.m. New York City
time on the Startup Day, at the offices of Dewey Ballantine LLP, 1301 Avenue of
the Americas, New York, New York, the Sponsor will sell and convey the Initial
Mortgage Loans and the money, instruments and other property related thereto to
the Trustee on behalf of the Trust, and the Trustee will (i) deliver to the
Representative, the Offered Certificates with an aggregate Percentage Interest
in each Class equal to 100%, registered in the name of Cede & Co. or in such
other names as the Representative shall direct, against payment of the purchase
price thereof by wire transfer of immediately available funds to the Trustee;
(ii) deliver to the Trustee, the Class B Certificate with an aggregate
Percentage Interest equal to 100%, registered in the name of the Trustee on
behalf of the Supplemental Interest Trust; (iii) deliver to the Sponsor, the
Class BS Certificates, the Class R-I Certificates and the Class R-II
Certificates in each case with an aggregate Percentage Interest equal to 100%,
registered in such names as the Sponsor shall request; and (iv) deliver to the
Trustee on behalf of the Owners of the Supplemental Interest Right, the
certificate representing the Supplemental Interest Right. Upon receipt of the
proceeds of the sale of the Certificates, the Trustee shall, from the proceeds
of the sale of the Certificates, pay other fees and expenses identified by the
Sponsor, deposit the Group I Original Pre-Funded Amount and the Group II
Original Pre-Funded Amount into the Pre-Funding Account, deposit the Group I
Capitalized Interest Deposit and the Group II Capitalized Interest Deposit into
the Capitalized Interest Account and pay to the Sponsor the balance after
deducting such amounts.

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<PAGE>   67

                                    ARTICLE V

                     CERTIFICATES AND TRANSFER OF INTERESTS

         SECTION 5.01 Terms. (a) The Certificates are pass-through securities
having the rights described therein and herein. Notwithstanding references
herein or therein with respect to the Certificates as to "principal" and
"interest" no debt of any Person is represented thereby, nor are the
Certificates or the underlying Notes guaranteed by any Person (except that the
Notes may be recourse to the Mortgagors thereof to the extent permitted by law
and except for the rights of the Trustee with respect to the Certificate
Insurance Policy). Distributions on the Certificates are payable solely from
payments received on or with respect to the Mortgage Loans (other than the
Servicing Fees), monies in the Principal and Interest Account (net of investment
earnings), the Pre-Funding Account, the Capitalized Interest Account (net of
investment earnings) and, with respect to Group II Certificates, the
Supplemental Interest Payment Account, except as otherwise provided herein, from
earnings on monies and the proceeds of property held as a part of the Trust
Estate and from Insured Payments. Each Certificate entitles the Owner thereof to
receive monthly, on each Payment Date, in order of priority of distributions
with respect to such Class of Certificates, a specified portion of such payments
with respect to the Mortgage Loans in the related Mortgage Loan Group and
Insured Payments, pro rata in accordance with such Owner's Percentage Interest
and, with respect to the Group II Certificates, certain amounts payable from the
Supplemental Interest Payment Account.

                  (b)      Each Owner is required, and hereby agrees, to return
to the Trustee any Certificate with respect to which the Trustee has made the
final distribution due thereon. Any such Certificate as to which the Trustee has
made the final distribution thereon shall be deemed cancelled and shall no
longer be Outstanding for any purpose of this Agreement, whether or not such
Certificate is ever returned to the Trustee.

         SECTION 5.02 Forms. The Certificates shall be in substantially the
forms set forth in Exhibit A and Exhibit B hereof with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Agreement or as may in the Sponsor's judgment be necessary,
appropriate or convenient to comply, or facilitate compliance, with applicable
laws, and may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may be required to comply with
the rules of any applicable securities laws or as may, consistently herewith, be
determined by the Authorized Officer of the Sponsor executing such Delivery
Order, as evidenced by his execution thereof.

         SECTION 5.03 Execution, Authentication and Delivery. (a) Each
Certificate shall be executed on behalf of the Trust, by the manual signature of
one of the Trustee's Authorized Officers and shall be authenticated by the
manual signature of one of the Trustee's Authorized Officers.

                  (b)      Certificates bearing the manual signature of
individuals who were at any time the proper officers of the Trustee shall, upon
proper authentication by the

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<PAGE>   68
Trustee, bind the Trust, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the execution and delivery of such
Certificates or did not hold such offices at the date of authentication of such
Certificates.

                  (c)      The initial Certificates shall be dated as of the
Startup Day and delivered at the Closing to the parties specified in Section
4.02 hereof.

                  (d)      No Certificate shall be valid until executed and
authenticated as set forth above.

         SECTION 5.04 Registration and Transfer of Certificates. (a) The
Trustee, as registrar, shall cause to be kept a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and the registration of
transfer of Certificates. The Trustee is hereby appointed registrar for the
purpose of registering Certificates and transfers of Certificates as herein
provided. The Owners and the Certificate Insurer shall have the right to inspect
the Register at all reasonable times and to obtain copies thereof.

                  (b)      Subject to the provisions of Section 5.08 hereof,
upon surrender for registration of transfer of any Certificate at the office
designated as the location of the Register, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class And in the aggregate
principal amount of the Certificate so surrendered.

                  (c)      At the option of any Owner, Certificates of any Class
owned by such Owner may be exchanged for other Certificates authorized of like
Class, tenor and aggregate original principal amount and bearing numbers not
contemporaneously outstanding, upon surrender of the Certificates to be
exchanged at the office designated as the location of the Register. Whenever any
Certificate is so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificate or Certificates which the Owner making
the exchange is entitled to receive.

                  (d)      Certificates issued upon any registration of transfer
or exchange of Certificates shall be valid evidence of the same ownership
interests in the Trust and entitled to the same benefits under this Agreement as
the Certificates surrendered upon such registration of transfer or exchange.

                  (e)      Any Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Trustee duly
executed by the Owner thereof or his attorney duly authorized in writing.

                  (f)      No service charge shall be made to an Owner for any
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 registration of transfer or
exchange of Certificates; any other expenses in connection with such transfer or
exchange shall be an expense of the Trust.

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<PAGE>   69
                  (g)      It is intended that the Class A Certificates be
registered so as to participate in a global book-entry system with the
Depository, as set forth herein. Each Class of Class A Certificates shall,
except as otherwise provided in the next paragraph, be initially issued in the
form of a single fully registered Certificate with a denomination equal to the
Original Certificate Principal Balance for such Class. Upon initial issuance,
the ownership of each such Class A Certificate shall be registered in the
Register in the name of Cede & Co., or any successor thereto, as nominee for the
Depository.

                  The Sponsor and the Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.

                  With respect to Class A Certificates registered in the
Register in the name of Cede & Co., as nominee of the Depository, the Sponsor,
the Master Servicer, the Certificate Insurer and the Trustee shall have no
responsibility or obligation to Direct or Indirect Participants or beneficial
owners for which the Depository holds Class A Certificates from time to time as
a Depository. Without limiting the immediately preceding sentence, the Sponsor,
the Master Servicer, the Certificate Insurer and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of the records of
the Depository, Cede & Co., or any Direct or Indirect Participant with respect
to the ownership interest in the Class A Certificates, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a registered
Owner of a Class A Certificate as shown in the Register, of any notice with
respect to the Class A Certificates or (iii) the payment to any Direct or
Indirect Participant or any other Person, other than a registered Owner of a
Class A Certificate as shown in the Register, of any amount with respect to any
distribution of principal or interest on the Class A Certificates. No Person
other than a registered Owner of a Class A Certificate as shown in the Register
shall receive a certificate evidencing such Class A Certificate.

                  Upon delivery by the Depository to the Trustee of written
notice to the effect that the Depository has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions hereof with
respect to the payment of interest by the mailing of checks or drafts to the
registered Owners of Class A Certificates appearing as registered Owners in the
registration books maintained by the Trustee at the close of business on a
Record Date, the name "Cede & Co." in this Agreement shall refer to such new
nominee of the Depository.

                  (h)      In the event that (i) the Depository or the Sponsor
advises the Trustee and the Certificate Insurer in writing that the Depository
is no longer willing or able to discharge properly its responsibilities as
nominee and depository with respect to the Class A Certificates and the Sponsor
or the Trustee is unable to locate a qualified successor or (ii) the Sponsor at
its sole option elects to terminate the book-entry system through the
Depository, the Class A Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. At that time, the Sponsor may determine that the
Class A Certificates shall be registered in the name of and deposited with a
successor depository operating a global book-entry system, as may be acceptable
to the Sponsor, or such depository's agent or designee but, if the Sponsor does
not select such alternative global

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<PAGE>   70
book-entry system, then the Class A Certificates may be registered in whatever
name or names registered Owners of Class A Certificates transferring Class A
Certificates shall designate, in accordance with the provisions hereof;
provided, that the cost of any such re-registration shall be paid by the
Sponsor.

                  (i)      Notwithstanding any other provision of this Agreement
to the contrary, so long as any Class A Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Class A Certificates as the case may be and all notices with
respect to such Class A Certificates as the case may be shall be made and given,
respectively, in the manner provided in the Representation Letter.

                  (j)      None of the Sponsor, the Master Servicer, the
Certificate Insurer, or the Trustee will have any liability for any actions
taken by DTC or its nominee, Euroclear or Clearstream, including, without
limitation, actions for any aspect of the records relating to or payments made
on account of beneficial ownership interests in the Class A Certificates held by
Euroclear, Clearstream or Cede & Co., as nominee for DTC, or for maintaining
supervising or reviewing any records relating to such beneficial ownership
interests.

                  SECTION 5.05 Mutilated, Destroyed, Lost or Stolen
Certificates. If (i) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (ii) in the case of any mutilated Certificate,
such mutilated Certificate shall first be surrendered to the Trustee, and in the
case of any destroyed, lost or stolen Certificate, there shall be first
delivered to the Trustee such security or indemnity as may be reasonably
required by it to hold the Trustee harmless (provided, that with respect to an
Owner which is an insurance company, a letter of indemnity furnished by it shall
be sufficient for this purpose; provided, further, that such insurance company
possesses at least an investment grade rating from any of the Rating Agencies),
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and aggregate
principal amount, bearing a number not contemporaneously outstanding.

                  Upon the issuance of any new Certificate under this Section
5.05, 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; any other
expenses in connection with such issuance shall be an expense of the Trust.

                  Every new Certificate issued pursuant to this Section 5.05 in
exchange for or in lieu of any mutilated, destroyed, lost or stolen Certificate
shall constitute evidence of a substitute interest in the Trust, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Certificates of the same Class duly issued hereunder and such
mutilated, destroyed, lost or stolen Certificate shall not be valid for any
purpose.

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<PAGE>   71
                  The provisions of this Section 5.05 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.

                  SECTION 5.06 Persons Deemed Owners. The Trustee and any agent
of the Trustee may treat the Person in whose name any Certificate is registered
as the Owner of such Certificate for the purpose of receiving distributions with
respect to such Certificate and for all other purposes whatsoever, and neither
the Trustee nor any agent of the Trustee shall be affected by notice to the
contrary.

                  SECTION 5.07 Cancellation. All Certificates surrendered for
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. No Certificate shall be authenticated in lieu of or in exchange for any
Certificate cancelled as provided in this Section 5.07, except as expressly
permitted by this Agreement. All cancelled Certificates may be held by the
Trustee in accordance with its standard retention policy.

                  SECTION 5.08 Limitation on Transfer of Ownership Rights. (a)
No sale or other transfer of any Class A Certificate shall be made to the
Sponsor, any Originator or any of their respective affiliates, other than
Advanta National Bank or Advanta Bank Corp.

                  (b)      No sale or other transfer of record or beneficial
ownership of a Class R-I or Class R-II Certificate (whether pursuant to a
purchase, a transfer resulting from a default under a secured lending agreement
or otherwise) shall be made to a Disqualified Organization or an agent of a
Disqualified Organization. The transfer, sale or other disposition of a Class
R-I or Class R-II Certificate (whether pursuant to a purchase, a transfer
resulting from a default under a secured lending agreement or otherwise) to a
Disqualified Organization shall be deemed to be of no legal force or effect
whatsoever and such transferee shall not be deemed to be an Owner for any
purpose hereunder, including, but not limited to, the receipt of distributions
on such Class R-I or Class R-II Certificate. Furthermore, in no event shall the
Trustee accept surrender for transfer, registration of transfer, or register the
transfer, of any Class R-I or Class R-II Certificate nor authenticate and make
available any new Class R-I or Class R-II Certificate unless the Trustee has
received an affidavit from the proposed transferee in the form attached hereto
as Exhibit I. Each holder of a Class R-I or Class R-II Certificate by his
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 5.08(b).

                  (c)      No sale or other transfer of record or beneficial
ownership of a Class B, Class BS, Class R-I or Class R-II Certificate shall be
made unless such transfer is exempt from the registration requirements of the
Securities Act, and any applicable state securities laws or is made in
accordance with the Securities Act and laws. In the event such a transfer is to
be made within two years from the Startup Day, (i) the Trustee or the Sponsor
shall require a written opinion of counsel acceptable to and in form and
substance satisfactory to the Sponsor that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor, from
the

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<PAGE>   72
Securities Act and laws or is being made pursuant to the Securities Act and
laws, which opinion of counsel shall not be an expense of the Trustee or the
Sponsor, and (ii) the Trustee shall require the Transferee to execute an
investment letter acceptable to and in form and substance satisfactory to the
Sponsor certifying to the Trustee and the Sponsor the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Sponsor. The Owner of a Class B, Class BS, Class R-I or Class R-II Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Sponsor 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
Class B, Class BS, Class R-I or Class R-II Certificate shall be acquired by or
transferred to (i) an employee benefit plan (as defined in section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) subject
to the provisions of Title I of ERISA, (ii) a plan (as defined in Section
4975(e)(1) of the Code) subject to Section 4975 of the Code, or (iii) an entity
whose underlying assets are deemed to be assets of a plan described in (i) or
(ii) above by reason of such plan's investment in the entity (each, a "Benefit
Plan Entity"). Any transferee of a Class B, Class BS, Class R-I or Class R-II
Certificate shall deliver to the Trustee a certificate to the effect that it is
not a Benefit Plan Entity.

                  SECTION 5.09 Assignment of Rights. An Owner may pledge,
encumber, hypothecate or assign all or any part of its right to receive
distributions hereunder, but such pledge, encumbrance, hypothecation or
assignment shall not constitute a transfer of an ownership interest sufficient
to render the transferee an Owner of the Trust without compliance with the
provisions of Sections 5.04 and 5.08 hereof.

                                   ARTICLE VI

                                    COVENANTS

                  SECTION 6.01 Distributions. The Trustee will duly and
punctually pay distributions with respect to the Certificates in accordance with
the terms of the Certificates and this Agreement. Such distributions shall be
made (i) by check mailed on each Payment Date or (ii) if requested by any Owner,
to such Owner by wire transfer to an account within the United States designated
no later than five Business Days prior to the related Record Date, made on each
Payment Date, in each case to each Owner of record on the immediately preceding
Record Date; provided, however, that an Owner of a Class A Certificate shall
only be entitled to payment by wire transfer if such Owner owns Class A
Certificates in the aggregate denomination of at least $5,000,000. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the location specified in the
notice to Certificateholders of the final distribution.

                  SECTION 6.02 Money for Distributions to be Held in Trust;
Withholding. (a) All payments of amounts due and payable with respect to any
Certificate that are to be made from amounts withdrawn from the Certificate
Account pursuant to Section 7.05 hereof or from Insured Payments shall be made
by and on behalf

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<PAGE>   73
of the Trustee, and no amounts so withdrawn from the Certificate Account for
payments of the Certificates and no Insured Payment shall be paid over to the
Trustee except as provided in this Section 6.02.

                  (b)      The Trustee on behalf of the Trust shall comply with
all requirements of the Code and applicable state and local law with respect to
the withholding from any distributions made by it to any Owner of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.

                  (c)      Any money held by the Trustee in trust for the
payment of any amount due with respect to any Class A or Class B Certificate and
remaining unclaimed by the Owner of such Class A or Class B Certificate for the
period then specified in the escheat laws of the State of New York after such
amount has become due and payable shall be discharged from such trust and be
paid first, to the Certificate Insurer on account of any Reimbursement Amount,
and second to the Owners of the Class R-II Certificates; and the Owner of such
Class A or Class B Certificate shall thereafter, as an unsecured general
creditor, look only to the Owners of the Class R-II Certificates, or the
Certificate Insurer for payment thereof (but only to the extent of the amounts
so paid to the Certificate Insurer or the Owners of the Class R-II
Certificates), and all liability of the Trustee with respect to such trust money
shall thereupon cease; provided, however, that the Trustee, before being
required to make any such payment, shall at the expense of the Sponsor cause to
be published once, in the eastern edition of The Wall Street Journal, notice
that such money remains unclaimed and that, after a date specified therein,
which shall be not fewer than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be paid to the Certificate
Insurer or the Owners of the Class R-II Certificates as provided above. The
Trustee shall, at the direction of the Sponsor, also adopt and employ, at the
expense of the Sponsor, any other reasonable means of notification of such
payment (including, but not limited to, mailing notice of such payment to Owners
whose right to or interest in monies due and payable but not claimed is
determinable from the Register at the last address of record for each such
Owner).

                  SECTION 6.03 Protection of Trust Estate. (a) The Trustee will
hold the Trust Estate in trust for the benefit of the Owners and the Certificate
Insurer as their interests may appear, and, upon request of the Certificate
Insurer, or with the consent of the Certificate Insurer, at the request and
expense of the Sponsor, will from time to time execute and deliver all such
supplements and amendments hereto pursuant to Section 11.14 hereof and all
instruments of further assurance and other instruments, and will take such other
action upon such request as it deems reasonably necessary or advisable, to:

                  (i)      more effectively hold in trust all or any portion of
         the Trust Estate;

                  (ii)     perfect, publish notice of, or protect the validity
         of any grant made or to be made by this Agreement;

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<PAGE>   74
                  (iii)    enforce any of the Mortgage Loans; or

                  (iv)     preserve and defend title to the Trust Estate and the
         rights of the Trustee, and the ownership interests of the Owners
         represented thereby, in such Trust Estate against the claims of all
         Persons and parties.

                  The Trustee shall send copies of any request received from the
Certificate Insurer or the Sponsor to take any action pursuant to this Section
6.03 to the other party.

                  (b)      The Trustee shall have the power to enforce, and
shall enforce the obligations of the other parties to this Agreement and of the
Certificate Insurer by action, suit or proceeding at law or equity, and shall
also have the power to enjoin, by action or suit in equity, any acts or
occurrences which may be unlawful or in violation of the rights of the Owners;
provided, however, that nothing in this Section 6.03 shall require any action by
the Trustee unless the Trustee shall first (i) have been furnished indemnity
satisfactory to it and (ii) when required by this Agreement, have been requested
to take such action by a majority of the Percentage Interests represented by the
affected Class or Classes of Class A Certificates then Outstanding or, if there
are no longer any affected Class A Certificates then outstanding, by such
majority of the Percentage Interests represented by the Class R-II Certificates.

                  (c)      The Trustee shall execute any instrument required
pursuant to this Section so long as such instrument does not conflict with this
Agreement or with the Trustee's fiduciary duties.

                  SECTION 6.04 Performance of Obligations. (a) The Trustee will
not take any action that would release the Sponsor or the Certificate Insurer
from any of their respective covenants or obligations under any instrument or
document relating to the Trust Estate or the Certificates or which would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or document, except
as expressly provided in this Agreement or such other instrument or document.

                  (b)      The Trustee may contract with other Persons to assist
it in performing its duties hereunder.

                  SECTION 6.05 Negative Covenants. The Trustee will not, to the
extent within the control of the Trustee, take any of the following actions:

                  (i)      sell, transfer, exchange or otherwise dispose of any
         of the Trust Estate except as expressly permitted by this Agreement;

                  (ii)     claim any credit on or make any deduction from the
         distributions payable in respect of, the Certificates (other than
         amounts properly withheld from such payments under the Code) or assert
         any claim against any present or former Owner by reason of the payment
         of any taxes levied or assessed upon any of the Trust Estate;

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<PAGE>   75
                  (iii)    incur, assume or guaranty on behalf of the Trust any
         indebtedness of any Person except pursuant to this Agreement;

                  (iv)     dissolve or liquidate the Trust Estate in whole or in
         part, except pursuant to Article IX hereof; or

                  (v)      (A) impair the validity or effectiveness of this
         Agreement, or release any Person from any covenants or obligations with
         respect to the Trust or to the Certificates under this Agreement,
         except as may be expressly permitted hereby or (B) create or extend any
         lien, charge, adverse claim, security interest, mortgage or other
         encumbrance to or upon the Trust Estate or any part thereof or any
         interest therein or the proceeds thereof.

                  SECTION 6.06 No Other Powers. The Trustee will not, to the
extent within the control of the Trustee, permit the Trust to engage in any
business activity or transaction other than those activities permitted by
Section 2.03 hereof.

                  SECTION 6.07 Limitation of Suits. No Owner shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Agreement or the Certificate Insurance Policy or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:

                  (a)      such Owner has previously given written notice to the
         Sponsor, the Certificate Insurer, and the Trustee of such Owner's
         intention to institute such proceeding;

                  (b)      the Owners of not less than 25% of the Percentage
         Interests represented by the affected Class or Classes of Certificates
         then Outstanding or, if there are no affected Classes of Class A or
         Class B Certificates then Outstanding, by such percentage of the
         Percentage Interests represented by the Class R-II Certificates, shall
         have made written request to the Trustee to institute such proceeding
         in respect of such Event of Default;

                  (c)      such Owner or Owners have offered to the Trustee
         reasonable indemnity against the costs, expenses and liabilities to be
         incurred in compliance with such request;

                  (d)      the Trustee for 60 days after its receipt of such
         notice, request and offer of indemnity has failed to institute such
         proceeding;

                  (e)      as long as any Class A Certificate or any
         Reimbursement Amount is outstanding, the Certificate Insurer consented
         in writing thereto; and

                  (f)      no direction inconsistent with such written request
         has been given to the Trustee during such 60-day period by the
         Certificate Insurer or by the Owners of a majority of the Percentage
         Interests represented by the Class A Certificates or, if there are no
         Class A Certificates then Outstanding, by such majority of the
         Percentage Interests represented by the Class R-II Certificates;

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<PAGE>   76
it being understood and intended that no one or more Owners shall have any right
in any manner whatever by virtue of, or by availing themselves of, any provision
of this Agreement to affect, disturb or prejudice the rights of any other Owner
of the same Class or to obtain or to seek to obtain priority or preference over
any other Owner of the same Class or to enforce any right under this Agreement,
except in the manner herein provided and for the equal and ratable benefit of
all the Owners of the same Class.

                  In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Owners, each
representing less than a majority of the applicable Class of Certificates, the
Trustee shall act at the direction of the Certificate Insurer, notwithstanding
any other provision of this Agreement.

                  SECTION 6.08 Unconditional Rights of Owners to Receive
Distributions. Notwithstanding any other provision in this Agreement, the Owner
of any Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.

                  SECTION 6.09 Rights and Remedies Cumulative. Except as
otherwise provided herein, no right or remedy herein conferred upon or reserved
to the Trustee, the Certificate Insurer or to the Owners is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. Except as otherwise provided herein, the assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

                  SECTION 6.10 Delay or Omission Not Waiver. No delay of the
Trustee, the Certificate Insurer or any Owner of any Certificate to exercise any
right or remedy under this Agreement to any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article VI or by law
to the Trustee, the Certificate Insurer or to the Owners may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee, the
Certificate Insurer or by the Owners, as the case may be.

                  SECTION 6.11 Control by Owners. The Certificate Insurer (so
long as a Certificate Insurer Default has not occurred and is continuing) or the
Owners of a majority of the Percentage Interests represented by the Class A
Certificates then Outstanding, with the consent of the Control Party (which may
not be unreasonably withheld) or, if there are no longer any Class A
Certificates then Outstanding, by such majority of the Percentage Interests
represented by the Class R-II Certificates then Outstanding, with the consent of
the Control Party (which may not be unreasonably withheld) may direct the time,
method and place of conducting any proceeding for any remedy available to the
Control Party with respect to the Certificates or exercising any trust or power
conferred on the Control Party with respect to the Certificates or the Trust

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Estate, including, but not limited to, those powers set forth in Section 6.03
and Section 8.20 hereof; provided, that:

                  (a)      such direction shall not be in conflict with any rule
         of law or with this Agreement;

                  (b)      the Control Party shall have been provided with
         indemnity satisfactory to it; and

                  (c)      the Trustee may take any other action deemed proper
         by the Trustee, which is not inconsistent with such direction;
         provided, however, that the Trustee need not take any action which it
         determines might involve it in liability or may be unjustly prejudicial
         to the Owners not so directing; provided, further, that in the event
         that any directions provided by the Trustee and the Certificate Insurer
         conflict with each other, the Certificate Insurer's direction shall
         prevail.

                  So long as an Certificate Insurer Default has not occurred and
is continuing, the Certificate Insurer shall act as the Control Party and be
subrogated thereto until all Reimbursement Amounts have been paid.

                                  ARTICLE VII

                      ACCOUNTS, DISBURSEMENTS AND RELEASES

                  SECTION 7.01 Collection of Money. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Trustee pursuant to
this Agreement, including all payments due on the Mortgage Loans in accordance
with the respective terms and conditions of such Mortgage Loans and required to
be paid over to the Trustee by the Master Servicer or by any Sub-Servicer. The
Trustee shall hold all such money and property received by it, other than
pursuant to or as contemplated by Section 6.02(b) hereof, as part of the Trust
Estate and shall apply it as provided in this Agreement.

                  SECTION 7.02 Establishment of Accounts. On or prior to the
Startup Day, the Sponsor shall cause to be established, and the Trustee shall
maintain, at the corporate trust office of the Trustee, a Certificate Account, a
Pre-Funding Account, and a Capitalized Interest Account, each of which is to be
held by the Trustee in the name of the Trust for the benefit of the Owners of
the Certificates and the Certificate Insurer, as their interests may appear.

                  SECTION 7.03 The Certificate Insurance Policy. On each
Determination Date the Trustee shall determine with respect to the immediately
following Payment Date:

                  (a)      The amounts to be on deposit in the Certificate
         Account on each Payment Date with respect to each Mortgage Loan Group
         (disregarding the amounts of any net investment earnings and any
         Insured Payments with respect to

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         such Mortgage Loan Group and any investment earnings withdrawn from the
         Certificate Account in accordance with Section 7.05(c) hereof)
         excluding an amount equal to the sum of the Premium Amount, the
         Servicing Fees and the Trustee's Fees each with respect to such
         Mortgage Loan Group for the related Payment Date; such amounts with
         respect to Group I, are the "Group I Available Funds" and with respect
         to Group II are the "Group II Available Funds"; provided, however, that
         the amounts which cannot be distributed to the Owners of the Class A
         Certificates as a result of proceedings under the United States
         Bankruptcy Code or similar insolvency laws will not be considered in
         determining the amount of Available Funds;

                  (b)      If the Trustee determines that a Deficiency Amount
         will exist with respect to any Payment Date, the Trustee shall complete
         a Notice in the form of Exhibit A to the Certificate Insurance Policy
         and submit such notice to the Certificate Insurer no later than 12:00
         noon New York City time on the Business Day preceding such Payment Date
         as a claim for an Insured Amount in an amount equal to such Deficiency
         Amount. Upon receipt of Insured Payments from the Certificate Insurer
         under the Certificate Insurance Policy, the Trustee shall deposit such
         Insured Payments in the Certificate Account.

                  (c)      The Trustee shall (i) receive Insured Payments as
         attorney-in-fact of each Owner of the Class A Certificates of the
         related Class receiving any Insured Payment from the Certificate
         Insurer and (ii) disburse such Insured Payment to the Owners of the
         related Class A Certificates as set forth in Section 7.05(c). The
         Certificate Insurer shall be entitled to receive the Reimbursement
         Amount, as applicable, pursuant to Sections 7.05(c)(xii) and (xiii)
         hereof with respect to each Insured Payment made by the Certificate
         Insurer. The Trustee hereby agrees on behalf of each Owner of Class A
         Certificates and the Trust for the benefit of the Certificate Insurer
         that it recognizes that to the extent the Certificate Insurer makes
         Insured Payments, either directly or indirectly (as by paying through
         the Trustee), to the Owners of such Class A Certificates, the
         Certificate Insurer will be entitled to receive the related
         Reimbursement Amount pursuant to Sections 7.05(c)(xii) and (xiii)
         hereof.

                  (d)      Insured Payments disbursed by the Trustee from
         proceeds of the Certificate Insurance Policy shall not be considered
         payment by the Trust Estate nor shall such payments discharge the
         obligation of the Trust Estate with respect to such Class A
         Certificates, and the Certificate Insurer shall become the owner of
         such unpaid amounts due from the Trust Estate in respect of the Class A
         Certificates. The Trustee hereby agrees on behalf of each Owner of a
         Class A Certificate for the benefit of the Certificate Insurer that it
         recognizes that to the extent the Certificate Insurer makes any Insured
         Payment, either directly or indirectly (as by paying through the
         Trustee), to the Class A Certificateholders, the Certificate Insurer
         will be subrogated to the rights of the Class A Certificateholders with
         respect to such Insured Payment, shall be deemed to the extent of
         payments so made to be a registered Class A Certificateholder and shall
         receive all future distributions until all such Insured Payments by the
         Certificate

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<PAGE>   79
         Insurer, together with interest thereon at the Late Payment Rate, have
         been fully reimbursed. To evidence such subrogation, the Trustee shall,
         or shall cause the Registrar to, note the Certificate Insurer's rights
         as subrogee on the registration books maintained by the Trustee or the
         Registrar upon receipt from the Certificate Insurer of proof of payment
         of any Insured Payment. The effect of the foregoing provisions is that,
         to the extent of Insured Payments made by it, the Certificate Insurer
         shall be paid before payment of the balance of the distributions are
         made to the other Owners of the Class A Certificates.

                  SECTION 7.04 Pre-Funding Account and Capitalized Interest
Account. (a) On the Startup Day, the Trustee will deposit from the sale of the
Certificates (i) the Group I Original Pre-Funded Amount and the Group II
Original Pre-Funded Amount in the Pre-Funding Account from the proceeds of the
sale of the Certificates and (ii) the Group I Capitalized Interest Deposit and
the Group II Capitalized Interest Deposit in the Capitalized Interest Account.

                  (b)      On any Subsequent Transfer Date, the Sponsor shall
instruct the Trustee in writing by executing the Subsequent Transfer Agreement
to withdraw from the Pre-Funding Account an amount equal to 100% of the
aggregate Loan Balances of the Subsequent Mortgage Loans sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Sponsor upon satisfaction of the conditions set forth in Section 3.08 hereof
with respect to such transfer.

                  (c)      At the end of the Pre-Funding Period, after giving
effect to any reductions in the Pre-Funded Amount on or before the related such
Remittance Date, the Sponsor shall instruct the Trustee to withdraw from the
Pre-Funding Account all amounts remaining in the Pre-Funding Account on such
Remittance Date and deposit such amounts in the Certificate Account (i) on
behalf of the Owners of the Group I Certificates, the difference, if any,
between (A) the Group I Original Pre-Funded Amount and (B) all amounts
theretofore withdrawn from the Pre-Funding Account with respect to Subsequent
Mortgage Loans purchased for Group I and (ii) on behalf of the Owners of the
Group II Certificates, the difference, if any, between (A) the Group II Original
Pre-Funded Amount and (B) all amounts theretofore withdrawn from the Pre-Funding
Account with respect to Subsequent Mortgage Loans purchased for Group II.

                  (d)      On each Payment Date during the Pre-Funding Period,
the Trustee shall transfer the Pre-Funding Earnings, if any, relating to such
Payment Date from the Pre-Funding Account to the Certificate Account.

                  (e)      On the Payment Dates occurring in June 2000, July
2000 and August 2000, the Trustee shall transfer from the Capitalized Interest
Account to the Certificate Account with respect to Group I, the Group I
Capitalized Interest Requirement, if any, for such Payment Dates and with
respect to Group II, the Group II Capitalized Interest Requirement, if any, for
such Payment Dates.

                  (f)      On the Payment Date immediately following the end of
the Pre-Funding Period, any amounts remaining in the Capitalized Interest
Account after taking

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into account the transfers on such Payment Date described in clause (e) above
shall be paid to the Owners of the Class R-II Certificates, and the Capitalized
Interest Account shall be closed.

                  (g)      On the Payment Dates occurring in June 2000, July
2000 and August 2000, the Trustee shall transfer any investment earnings with
respect to amounts on deposit in the Capitalized Interest Account to the Master
Servicer or its designee.

                  SECTION 7.05 Flow of Funds. (a) The Trustee shall:

                  (i)      on each Remittance Date, deposit to the Certificate
         Account with respect to each Mortgage Loan Group, without duplication,
         (a) upon receipt, any Insured Payments relating to such Mortgage Loan
         Group, (b) the proceeds of any liquidation of the assets of the Trust,
         (c) the Monthly Remittance Amount with respect to such Mortgage Loan
         Group remitted by the Master Servicer or any Sub-Servicer, and

                  (ii)     on the Payment Dates occurring in June 2000, July
         2000 and August 2000, deposit in the Certificate Account; (x) the
         Pre-Funding Earnings transferred by the Trustee pursuant to Section
         7.04(d) hereof, (y) the Group I Capitalized Interest Requirement and
         the Group II Capitalized Interest Requirement to be transferred on such
         Payment Dates from the Capitalized Interest Account, pursuant to
         Section 7.04(e) hereof with respect to the related Mortgage Loan Group
         and (z) the portion of the amount, if any, to be transferred on such
         Payment Date from the Pre-Funding Account, pursuant to Section 7.04(c)
         hereof with respect to the related Mortgage Loan Group.

                  (b)      [Reserved].

                  (c)      On each Payment Date, the Trustee shall withdraw from
the Certificate Account and remit to the Master Servicer or its designee all net
investment earnings then on deposit in the Certificate Account (exclusive of any
such earnings transferred from the Pre-Funding Account), and shall make the
following allocations, disbursements and transfers of the remaining amount then
on deposit in the Certificate Account with respect to each Mortgage Loan Group
In the following order of priority, and each such allocation, transfer and
disbursement shall be treated as having occurred only after all preceding
allocations, transfers and disbursements have occurred:

                  (i)      first, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Trustee, an amount equal to the Trustee's Fees then due to it with
         respect to each Mortgage Loan Group;

                  (ii)     second, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Certificate Insurer the related Premium Amount for such Payment Date;

                  (iii)    third, from amounts then on deposit in the
         Certificate Account to the Master Servicer, an amount equal to any
         Servicing Fees then due to it, to the

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<PAGE>   81
         extent not previously received by the Master Servicer pursuant to
         Sections 8.08(c)(i) or 8.09(a) hereof;

                  (iv)     fourth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates, pro rata, their respective
         Class A Current Interest for such Payment Date;

                  (v)      fifth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates, pro rata, their respective
         Class A Interest Carry Forward Amount;

                  (vi)     sixth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, for
         allocation to the Owners of the Class A Certificates of the other
         Mortgage Loan Group, an amount equal to any shortfall in the full
         amount of the Class A Current Interest for such other Mortgage Loan
         Group with respect to such Payment Date, after taking into account the
         allocation of 100% of the Available Funds for the other Mortgage Loan
         Group on such Payment Date;

                  (vii)    seventh, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, for
         allocation to the Owners of the Class A Certificates of the other
         Mortgage Loan Group, an amount equal to any shortfall in the full
         amount of the Class A Interest Carry Forward Amount for such other
         Mortgage Loan Group with respect to such Payment Date, after taking
         into account the allocation of 100% of the Available Funds for the
         other Mortgage Loan Group on such Payment Date;

                  (viii)   eighth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates, as a distribution of
         principal, the Base Principal Distribution Amount with respect to such
         Mortgage Loan Group for such Payment Date; such amount to be paid out
         as a portion of the Principal Distribution Amount for the related
         Mortgage Loan Group pursuant to Section 7.05(d);

                  (ix)     ninth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates, as a distribution of
         principal, the Overcollateralization Deficit with respect to such
         Mortgage Loan Group for such Payment Date; such amount to be paid out
         as a portion of the Principal Distribution Amount for the related
         Mortgage Loan Group pursuant to Section 7.05(d);

                  (x)      tenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, if such
         Payment Date is the Payment Date following the end of the Pre-Funding
         Period for the Class A Certificates, as a distribution of principal,
         any amount remaining in the Pre-Funding Account with respect to such
         Mortgage Group (after taking into account all transfers of

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<PAGE>   82
         Subsequent Mortgage Loans to the related Mortgage Loan Group on or
         prior to such Payment Date); such amount to be paid out as a portion of
         the Principal Distribution Amount for the related Mortgage Loan Group
         pursuant to Section 7.05(d);

                  (xi)     eleventh, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, for
         allocation to the Owners of the related Class A Certificates of the
         other Mortgage Loan Group, an amount equal to any Overcollateralization
         Deficit for such other Mortgage Loan Group with respect to such Payment
         Date, after taking into account the allocation of 100% of the Available
         Funds for the other Mortgage Loan Group on such Payment Date;

                  (xii)    twelfth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Certificate Insurer, the Reimbursement Amount, if any, then due to it
         with respect to such Mortgage Loan Group;

                  (xiii)   thirteenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Certificate Insurer, the Reimbursement Amount for the other Mortgage
         Loan Group, if any, then due to it after taking into account 100% of
         the Available Funds for the other Mortgage Loan Group on such Payment
         Date;

                  (xiv)    fourteenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates with respect to such
         Mortgage Loan Group, as a distribution of principal, up to an amount
         equal to the Overcollateralization Increase Amount with respect to such
         Group; such amount to be paid out as a portion of the Principal
         Distribution Amount for the related Mortgage Loan Group pursuant to
         Section 7.05(d);

                  (xv)     fifteenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Owners of the related Class A Certificates of the other Mortgage Loan
         Group, as a distribution of principal, up to an amount equal to the
         Overcollateralization Increase Amount with respect to such other Group,
         after taking into account the allocation of 100% of the Available Funds
         for the other Mortgage Loan Group on such Payment Date;

                  (xvi)    sixteenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Master Servicer, to the extent of any unreimbursed Delinquency
         Advances, unreimbursed Servicing Advances, including Nonrecoverable
         Delinquency Advances and Nonrecoverable Servicing Advances and accrued
         and unpaid Servicing Fees as of such Payment Date;

                  (xvii)   seventeenth, from amounts then on deposit in the
         Certificate Account with respect to such Mortgage Loan Group, to the
         Trustee, to the extent of any unreimbursed expenses owed to it;

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<PAGE>   83
                  (xviii)  eighteenth, on each Payment Date, the Trustee shall
         transfer from amounts then on deposit in either Certificate Account to
         the Supplemental Interest Payment Account, the Class B Distribution
         Amount; such transfer shall be deemed to be a distribution on the Class
         B Certificates; and

                  (xix)    nineteenth, on each Payment Date, the Trustee shall
         transfer all remaining monies then on deposit in the Certificate
         Account to the Owners of the Class R-II Certificates.

                  (d)      Principal Distribution Amounts shall be applied as
         follows:

                  (i)      the Group I Principal Distribution Amount shall be
         applied in the following order of priority:

                           (A)      first, the Group I Principal Distribution
                                    Amount shall be distributed to the Owners of
                                    the Class A-6 Certificates in an amount
                                    equal to the lesser of (x) the Class A-6
                                    Principal Distribution Amount for such
                                    Payment Date and (y) the Outstanding Class
                                    A-6 Certificate Principal Balance for such
                                    Payment Date;

                           (B)      second, the excess of (x) the Group I Class
                                    A Principal Distribution Amount over (y) the
                                    amount distributed in clause (c)(i)(A) above
                                    shall be distributed to the Owners of the
                                    Class A-1 Certificates, the Class A-2
                                    Certificates, the Class A-3 Certificates,
                                    the Class A-4 Certificates and the Class A-5
                                    Certificates, sequentially in that order,
                                    until the Certificate Principal Balance of
                                    each Class (in ascending order of numerical
                                    designation) has been reduced to zero; and

                           (C)      third, to the Owners of the Class A-6
                                    Certificates, any remaining amount of the
                                    Group I Principal Distribution Amount for
                                    such Payment Date until the Certificate
                                    Principal Balance of the Class A-6
                                    Certificates has been reduced to zero.

                           Notwithstanding the foregoing, on any Payment Date on
                  which the Group I Overcollateralization Amount is zero and the
                  Certificate Insurer is in default, the Group I Principal
                  Distribution Amount shall be distributed pro rata to the
                  Owners of the Group I Certificates and not in accordance with
                  the above priorities.

                  (ii)     the Group II Principal Distribution Amount shall be
         distributed to the Owners of the Class A-7 Certificates until the
         Certificate Principal Balance of the Class A-7 Certificates has been
         reduced to zero.

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                  (e)      Notwithstanding paragraph (b) above, on any Payment
Date during the continuance of any Certificate Insurer Default, no Premium
Amounts or Reimbursement Amounts shall be paid to the Certificate Insurer unless
the Certificate Insurer or its custodian, trustee, agent, receiver or similar
official continues to make payment under the Policy, and any amounts otherwise
payable to the Certificate Insurer as Premium Amounts or Reimbursement Amounts
shall be retained in the Certificate Account as the Available Funds with respect
to the related Mortgage Loan Group, as appropriate. On any Payment Date wherein
such Certificate Insurer Default has been cured, the Premium Amounts or
Reimbursement Amount shall be paid to the Certificate Insurer.

                  (f)      Notwithstanding any of the foregoing provisions, the
aggregate amount distributed to the Owners of any Class A Certificates on
account of principal shall not exceed the Certificate Principal Balance for the
related Class.

                  SECTION 7.06 Investment of Accounts. (a) So long as no event
described in Sections 8.20(a) or (b) hereof shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of the Accounts (other than the Principal and Interest Account) held by the
Trustee shall be invested and reinvested by the Trustee in the name of the
Trustee for the benefit of the Owners and the Certificate Insurer, as their
interests may appear, as directed in writing by the Master Servicer, in one or
more Eligible Investments bearing interest or sold at a discount, other than the
Capitalized Interest Account which funds shall be invested and reinvested by the
Trustee on behalf of the Master Servicer. The Master Servicer may invest funds
held in the Principal and Interest Account in one or more Eligible Investments.
During the continuance of an event described in Sections 8.20(a) or (b) hereof
and following any removal of the Master Servicer, the Control Party shall direct
such investments. No investment in any Account shall mature later than the
Business Day immediately preceding the next Payment Date.

                  (b)      If any amounts are needed for disbursement from any
Account held by the Trustee or the Master Servicer, as the case may be, and
sufficient uninvested funds are not available to make such disbursement, the
Trustee or the Master Servicer, as the case may be, shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Account. No investments will be liquidated prior to maturity unless the proceeds
thereof are needed for disbursement.

                  (c)      Subject to Section 10.01 hereof, the Trustee shall
not in any way be held liable by reason of any insufficiency in any Account held
by the Trustee resulting from any loss on any Eligible Investment included
therein (except and only to the extent that the bank serving as Trustee is the
obligor thereon and is otherwise liable).

                  (d)      In the absence of any investment direction from the
Master Servicer with respect to amounts on deposit in the Accounts, the Trustee
shall invest such amounts in the Eligible Investment set forth in Section
7.07(i) hereof.

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<PAGE>   85
                  (e)      For purposes of investment, the Trustee may aggregate
all amounts on deposit in the Accounts. All income or other gain from
investments in the Accounts shall be deposited, pro rata, in the Accounts
immediately on receipt, and any loss resulting from such investments shall be
charged, pro rata, to the Accounts.

                  SECTION 7.07 Eligible Investments. The following are Eligible
Investments:

                  (a)      Direct general obligations of the United States or
         the obligations of any agency or instrumentality of the United States
         fully and unconditionally guaranteed, the timely payment or the
         guarantee of which constitutes a full faith and credit obligation of
         the United States.

                  (b)      Federal Housing Administration debentures and rated
         Aa2 or higher by Moody's and AA or better by Standard & Poor's.

                  (c)      Freddie Mac senior debt obligations and rated Aa2 or
         higher by Moody's and AA or better by Standard & Poor's.

                  (d)      Federal Home Loan Banks' consolidated senior debt
         obligations and rated Aa2 or higher by Moody's and AA or better by
         Standard & Poor's.

                  (e)      Fannie Mae senior debt obligations and rated Aa2 or
         higher by Moody's.

                  (f)      Federal funds, certificates of deposit, time and
         demand deposits, and bankers' acceptances (having original maturities
         of not more than 365 days) of any domestic bank, the short-term debt
         obligations of which have been rated A-1 or better by Standard & Poor's
         and P-1 by Moody's.

                  (g)      Investment agreements approved by the Control Party;
         provided:

                           (i)      The agreement is with a bank or insurance
                  company which has an unsecured, uninsured and unguaranteed
                  obligation (or claims-paying ability) rated Aa2 or better by
                  Moody's and AA or better by Standard & Poor's, and

                           (ii)     Monies invested thereunder may be withdrawn
                  without any penalty, premium or charge upon not more than one
                  day's notice (provided such notice may be amended or canceled
                  at any time prior to the withdrawal date), and

                           (iii)    The agreement is not subordinated to any
                  other obligations of such insurance company or bank, and

                           (iv)     The same guaranteed interest rate will be
                  paid on any future deposits made pursuant to such agreement,
                  and

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                           (v)      The Trustee and the Certificate Insurer
                  receive an opinion of counsel that such agreement is an
                  enforceable obligation of such insurance company or bank.

                  (h)      Commercial paper (having original maturities of not
         more than 365 days) rated A-1 or better by Standard & Poor's and P-1 or
         better by Moody's.

                  (i)      Investments in money market funds rated AAAm or
         AAAM-G by Standard & Poor's and Aaa or P-1 by Moody's.

                  (j)      Investments approved in writing by the Control Party
         and acceptable to the Rating Agencies and the Certificate Insurer;

provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to 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 provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity; and provided, further, that, with respect to any
instrument described above, such instrument qualifies as a "permitted
investment" within the meaning of Section 860G(a)(5) of the Code and the
regulations thereunder.

                  SECTION 7.08 Reports by Trustee. (a) On each Payment Date the
Trustee shall provide to each Owner, to the Master Servicer, to the Certificate
Insurer, to each Underwriter, to the Sponsor and to each Rating Agency a written
report in substantially the form set forth as Exhibit I hereto with respect to
each Mortgage Loan Group, as such form may be revised by the Trustee and the
Master Servicer from time to time, but in every case setting forth the
information requested on Exhibit I hereto and the following information:

                  (i)      the amount of the distribution with respect to the
         related Class of Certificates;

                  (ii)     the amount of such distributions allocable to
         principal, separately identifying the aggregate amount of any
         Prepayments or other unscheduled recoveries of principal included
         therein;

                  (iii)    the amount of such distributions allocable to
         interest;

                  (iv)     the Interest Carry Forward Amount for each Class;

                  (v)      the Certificate Principal Balance for each Class of
         Class A Certificates as of such Payment Date, together with the
         principal amount of such Class of Class A Certificates (based on a
         Certificate in an original principal

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<PAGE>   87
         amount of $1,000) then outstanding, in each case after giving effect to
         any payment of principal on such Payment Date;

                  (vi)     with respect to the Class A Certificates, the amount
         of any Insured Payment included in the amounts distributed in respect
         of the Class A Certificates;

                  (vii)    the aggregate Loan Balance of all Mortgage Loans
         after giving effect to any payment of principal on such Payment Date
         both in the aggregate and in each of the Mortgage Loan Groups;

                  (viii)   information furnished by the Sponsor pursuant to
         Section 6049(d)(7)(C) of the Code and the regulations promulgated
         thereunder to assist the Owners in computing their market discount;

                  (ix)     the total of any Substitution Amounts and any Loan
         Purchase Price amounts included in such distribution;

                  (x)      the weighted average Coupon Rate of the Mortgage
         Loans with respect to each Group;

                  (xi)     the amount of any Supplemental Interest Amount;

                  (xii)    the Group I Overcollateralization Amount and the
         Group II Overcollaterization Amount after giving effect to any payment
         of principal on such Payment Date;

                  (xiii)   the aggregate Loan Balances of all Mortgage Loans in
         each Mortgage Loan Group that were repurchased during the related
         Remittance Period and any repurchases pursuant to Section 8.10;

                  (xiv)    the amounts, if any, of any Realized Losses in each
         Mortgage Loan Group for the related Remittance Period;

                  (xv)     the Pool Cumulative Realized Losses (x) as a
         percentage of the average Pool Principal Balance as of the close of
         business on the last day of each of the twelve preceding Remittance
         Periods and (y) as a percentage of the sum of the aggregate Loan
         Balances of the Mortgage Loans as of the Initial Cut-Off Date;

                  (xvi)    a number with respect to each Class (the "Pool
         Factor" for such Class) computed by dividing the Certificate Principal
         Balance for such Class (after giving effect to any distribution of
         principal to be made on such Payment Date) by the Certificate Principal
         Balance for such Class on the Startup Day;

                  (xvii)   whether a Servicer Termination Loss Trigger has
         occurred, as such terms are defined in the Insurance Agreement.

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                  Items (i) through (iii) above shall, with respect to each
Class of Class A Certificates, be presented on the basis of a Certificate having
a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Certificates are outstanding, the Trustee
shall furnish a report to each Owner of record at any time during each calendar
year as to the aggregate of amounts reported pursuant to (i), (ii) and (iii)
with respect to the Certificates for such calendar year. If a Class of
Certificates is in book-entry form, DTC will supply such reports to the Owners
of such Class of Certificates as are in accordance with its procedures.

                  (b)      In addition, on each Payment Date the Trustee will
distribute to each Owner, to the Certificate Insurer, to each Underwriter, to
the Master Servicer, to the Sponsor and to each Rating Agency, together with the
information described in Subsection (a) preceding, the following information
with respect to each Mortgage Loan Group as of the close of business on the last
Business Day of the prior calendar month, which is hereby required to be
prepared by the Master Servicer and furnished to the Trustee for such purpose on
or prior to the related Remittance Date:

                  (i)      the total number and aggregate Loan Balances of
         Mortgage Loans in each Mortgage Loan Group and the percentage (based on
         the aggregate Loan Balances) of the aggregate Loan Balances of such
         Mortgage Loans in the related Mortgage Loan Group which are (a) 30-59
         days Delinquent, (b) 60-89 days Delinquent and (c) 90 or more days
         Delinquent;

                  (ii)     the number, aggregate Loan Balances and percentage
         (based on the aggregate Loan Balances of the Mortgage Loans in such
         Mortgage Loan Group) of all Mortgage Loans in the related Mortgage Loan
         Group In foreclosure proceedings (and whether any such Mortgage Loans
         are also included in any of the statistics described in the foregoing
         clause (i));

                  (iii)    the number, aggregate Loan Balances and percentage
         (based on the aggregate Loan Balances of the Mortgage Loans in such
         Mortgage Loan Group) of all Mortgage Loans in the related Mortgage Loan
         Group relating to Mortgagors in bankruptcy proceedings (and whether any
         such Mortgage Loans are also included in any of the statistics
         described in the foregoing clause (i));

                  (iv)     the number, aggregate Loan Balances and percentage
         (based on the aggregate Loan Balances of the Mortgage Loans in such
         Mortgage Loan Group) of all Mortgage Loans in the related Mortgage Loan
         Group relating to REO Properties (and whether any such Mortgage Loans
         are also included in any of the statistics described in the foregoing
         clause (i));

                  (v)      the loan number of the Mortgage Loans and the book
         value of any REO Property in each Mortgage Loan Group;

                  (vi)     the aggregate Loan Balance of 60+ Day Delinquent
         Mortgage Loans with respect to each Group; and

                  (vii)    the book value of any REO Property.

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                  (c)      The foregoing reports shall be sent be to an Owner
only insofar as such Owner owns a Certificate with respect to the related
Mortgage Loan Group.

                  (d)      The Sponsor and the Master Servicer, on behalf of
Certificateholders and the Trust (the "Trust Parties") hereby authorize the
Trustee to include the loan level information with respect to the Mortgage
Loans, excluding any information relating to the fees or amounts due to the
Certificate Insurer, contained in reports provided to the Certificate Insurer or
the Trustee by the Master Servicer hereunder and, if so directed by an
Authorized Officer of the Sponsor in writing to the Trustee, the monthly report
to the Owners prepared by the Trustee (the "Information") on The Bloomberg, an
on-line computer based on-line information network maintained by Bloomberg L.P.
("Bloomberg") or on any other on-line computer based on-line information network
or service ("Information Network"), or in other electronic or print information
services deemed acceptable by the Sponsor or the Master Servicer as designated
in writing to the Trustee by an Authorized Officer of the Master Servicer. The
Trust Parties agree not to commence any actions or proceedings, or otherwise
assert any claims, against the Trustee or its affiliates or any of the Trustee's
or its affiliates' respective agents, representatives, directors, officers or
employees (collectively, the "Designated Parties"), arising out of, or related
to or in connection with the dissemination and/or use of any Information by the
Trustee, including, but not limited to, claims based on allegations of
inaccurate or incomplete information by the Trustee to Bloomberg or to any
Information Network or otherwise (other than in connection with the Trustee's
negligence or willful misconduct). The Trust Parties waive their rights to
assert any such claims against the Designated Parties and fully and finally
release the Designated Parties from any and all such claims, demands,
obligations, actions and liabilities (other than in connection with such
Designated Parties' negligence or willful misconduct). The Trustee makes no
representations or warranties, expressed or implied, of any kind whatsoever with
respect to the accuracy, adequacy, timeliness, completeness, merchantability or
fitness for any particular purpose of any Information in any form or manner. The
authorizations, covenants and obligations of the Trust Parties under this
section shall be irrevocable and shall survive the termination of this
Agreement.

                  SECTION 7.09 Additional Reports by Trustee. (a) The Trustee
shall report to the Sponsor, the Certificate Insurer and the Master Servicer
with respect to the amount then held in each Account (including investment
earnings accrued or scheduled to accrue) held by the Trustee and the identity of
the investments included therein, as the Sponsor, the Master Servicer or the
Certificate Insurer may from time to time request. Without limiting the
generality of the foregoing, the Trustee shall, at the request of the Sponsor,
the Master Servicer or the Certificate Insurer, transmit promptly to the
Sponsor, the Certificate Insurer and the Master Servicer copies of all
accounting of receipts in respect of the Mortgage Loans furnished to it by the
Master Servicer and shall notify the Sponsor, the Certificate Insurer and the
Master Servicer if any such receipts have not been received by the Trustee.

                  (b)      The Trustee shall immediately report to the
Certificate Insurer, the Sponsor and the Master Servicer with respect to its
actual knowledge, without independent investigation, of any breach of any of the
representations or warranties

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relating to individual Mortgage Loans set forth in any Mortgage Loan Transfer
Agreement or in Section 3.03(a) hereof.

                  SECTION 7.10 Supplemental Interest Payment Account and
Supplemental Interest Payments. (a) The parties hereto do hereby create and
establish a trust, the "Advanta Supplemental Interest Trust 2000-1". The
Supplemental Interest Trust shall hold a trust account at the corporate trust
office of the Trustee; the "Supplemental Interest Payment Account" to be held by
the Trustee in its name on behalf of the Supplemental Interest Trust. None of
the assets of the Supplemental Interest Trust shall be considered assets of the
REMIC Trust, and any amounts transferred from the REMIC Trust to the
Supplemental Interest Trust shall be treated as distributions with respect to
the Class B Certificates.

                  (b)      The amount, if any, on deposit in the Supplemental
Interest Payment Account on any Payment Date is the "Supplemental Interest
Payment Amount Available" on such Payment Date.

                  On each Payment Date, the Trustee shall withdraw from the
Supplemental Interest Payment Account and pay to the Owners of each Supplemental
Interest Right (which Owners shall be, in the absence of contrary instructions
received by the Trustee from the Owners of the Class A-7 Certificates, the
Owners of the Class A-7 Certificates), pro rata based on the Supplemental
Interest Amount due to each such Class, the lesser of (x) the sum of (i) the
Supplemental Interest Amount for such Payment Date plus (ii) any Supplemental
Interest Shortfall Carry-Forward Amount and (y) the Supplemental Interest
Payment Amount Available.

                  If, on any Payment Date, the Supplemental Interest Payment
Amount Available is insufficient to pay the Supplemental Interest Amount for
such Payment Date (such deficiency, the "Supplemental Interest Shortfall
Amount"), the Trustee shall demand that the Designated Residual Owner fund such
deficiency on the related Payment Date and the Designated Residual Owner shall
be required to fund such deficiency.

                  (c)      Any portion of the Supplemental Interest Payment
Amount Available remaining after application of clause (b) above shall be
distributed to the owners of the Class BS Certificates pro rata in accordance
with their Percentage Interests.

                  (d)      The Trustee, on behalf of the Supplemental Interest
Trust, shall comply with all requirements of the Code and applicable state and
local law with respect to the withholding from any distributions made by it to
any Person entitled thereto of any applicable withholding taxes imposed thereon
and with respect to any applicable reporting requirements in connection
therewith.

                  (e)      Notwithstanding any other provision of this Section
7.10, the right to receive the Supplemental Interest Amount plus any
Supplemental Interest Shortfall Carry-Forward Amounts (such right, the
"Supplemental Interest Right") shall be separately transferable from the Class
A-7 Certificates, subject to the restrictions on transfer set forth in Article V
hereof.

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                                  ARTICLE VIII

                          SERVICING AND ADMINISTRATION
                               OF MORTGAGE LOANS

SECTION 8.01 Master Servicer and Sub-Servicers. (a) Acting directly or through
one or more Sub-Servicers as provided in Section 8.03, the Master Servicer, as
master servicer, shall service and administer the Mortgage Loans in accordance
with this Agreement on behalf of the Trustee, the Owners and the Certificate
Insurer in accordance with Accepted Servicing Practices, and shall have full
power and authority, acting alone, 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.

                  (b)      With respect to the Mortgage Loans, the duties of the
Master Servicer shall include (i) collecting and posting of all payments, (ii)
responding to inquiries of Mortgagors or by federal, state or local government
authorities, (iii) investigating delinquencies, (iv) reporting tax information
to Mortgagors in accordance with its customary practices, (v) accounting for
collections, (vi) furnishing monthly and annual statements to the Trustee and
the Certificate Insurer, as applicable, with respect to distributions, (vii)
paying Compensating Interest and (viii) making Delinquency Advances and
Servicing Advances pursuant hereto. The Master Servicer shall follow its
customary standards, policies and procedures in performing its duties as Master
Servicer. The Master Servicer shall cooperate with the Trustee and furnish to
the Trustee with reasonable promptness information in its possession as may be
necessary or appropriate to enable the Trustee to perform its tax reporting
duties hereunder.

                  (c)      Subject to clause (e) below, without limiting the
generality of the foregoing, the Master Servicer (i) shall continue, and is
hereby authorized and empowered by the Trustee, to execute and deliver, on
behalf of itself, the Owners, the Certificate Insurer and the Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the related Properties; (ii) may consent to
any modification of the terms of any Note not expressly prohibited hereby if the
effect of any such modification (x) will not be to affect materially and
adversely the security afforded by the related Property, the timing of receipt
of any payments required hereby or the interests of the Certificate Insurer and
(y) will not cause either the Upper-Tier REMIC or the Lower-Tier to fail to
qualify as a REMIC.

                  (d)      The Master Servicer shall, in accordance with
Accepted Servicing Practices, have the right to approve applications of
Mortgagors for consent to (i) partial releases of Mortgages, (ii) alterations to
Properties and (iii) removal, demolition or division of Properties. No
application for consent may be approved by the Master Servicer unless: (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Combined Loan-to-Value Ratio (which may, for this purpose, be determined at the
time of any such action in a manner reasonably acceptable to the Trustee) and
the Mortgagor's debt-to-income ratio after any release does not exceed the
Combined Loan-to-Value Ratio and debt-to-income ratio applicable to such
Mortgage Loan at origination

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<PAGE>   92
and (z) the lien priority of the related Mortgage is not adversely affected or
reduced; provided, however, that the foregoing requirements (x), (y) and (z)
shall not apply to any such situation described in this paragraph if such
situation results from any condemnation or easement activity by a governmental
entity.

                  (e)      The parties intend that both the Upper-Tier REMIC and
the Lower-Tier REMIC shall constitute a REMIC and that the affairs of each shall
be conducted so as to qualify each as a REMIC. In furtherance of such intention,
the Master Servicer covenants and agrees that it shall act as agent (and the
Master Servicer is hereby appointed to act as agent) on behalf of each such
REMIC and that in such capacity it shall: (i) use its best efforts to conduct
the affairs of each such REMIC at all times that any Class of Certificates are
outstanding so as to maintain the status of each such REMIC as a REMIC under the
REMIC Provisions; (ii) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of either
such REMIC or that would subject the Trust to tax and (iii) exercise reasonable
care not to allow either such REMIC to receive income from the performance of
services or from assets not permitted under the REMIC Provisions to be held by
each REMIC.

                  (f)      Without limiting the generality of the foregoing, but
subject to Sections 8.13 and 8.14, the Master Servicer in its own name or in the
name of a Sub-Servicer may be authorized and empowered pursuant to a power of
attorney executed and delivered by the Trustee to execute and deliver, and may
be authorized and empowered by the Trustee, to execute and deliver, on behalf of
itself, the Owners, the Certificate Insurer and the Trustee or any of them, (i)
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 with respect to the Properties, (ii) and to institute
foreclosure proceedings or obtain a deed in lieu of foreclosure so as to effect
ownership of any Property on behalf of the Trustee, and (iii) to hold title to
any Property upon such foreclosure or deed in lieu of foreclosure on behalf of
the Trustee; provided, however, that Section 8.14(a) shall constitute a power of
attorney from the Trustee to the Master Servicer or any Sub-Servicer to execute
an instrument of satisfaction (or assignment of mortgage without recourse) with
respect to any Mortgage Loan paid in full (or with respect to which payment in
full has been escrowed). Subject to Sections 8.13 and 8.14, the Trustee shall
furnish the Master Servicer and any Sub-Servicer with any powers of attorney and
other documents as the Master Servicer or such Sub-Servicer shall reasonably
request to enable the Master Servicer and such Sub-Servicer to carry out their
respective servicing and administrative duties hereunder.

                  (g)      The Master Servicer shall give prompt notice to the
Trustee of any action, of which the Master Servicer has actual knowledge, to (i)
assert a claim against the Trust or (ii) assert jurisdiction over the Trust.

                  (h)      Servicing Advances incurred by the Master Servicer or
any Sub-Servicer in connection with the servicing of the Mortgage Loans
(including any penalties in connection with the payment of any taxes and
assessments or other charges) on any Property shall be recoverable by the Master
Servicer or such Sub-Servicer to the extent described in Section 8.09(c) and in
Section 7.05(c)(xvi).

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<PAGE>   93
                  (i)      The Master Servicer shall modify payments of monthly
principal and interest on any Mortgage Loan becoming subject to the terms of the
Civil Relief Act in accordance with the Master Servicer's general policies of
the comparable mortgage loans subject to the Civil Relief Act.

                  SECTION 8.02 Collection of Certain Mortgage Loan Payments. (a)
The Master Servicer shall, to the extent such procedures shall be consistent
with this Agreement and the terms and provisions of any applicable Mortgage
Insurance Policies, follow Accepted Servicing Practices. The Master Servicer may
in its discretion waive any assumption fees, late payment charges, charges for
checks returned for insufficient funds, prepayment fees, if any, or other fees
which may be collected in the ordinary course of servicing the Mortgage Loans.

                  In addition, the Master Servicer may, if a Mortgagor is in
default or about to be in default because of a Mortgagor's financial condition,
arrange with the Mortgagor a schedule for the payments due on the related
Mortgage Loan; provided, however, the Master Servicer shall not reschedule the
payment of delinquent payments more than one time in any twelve consecutive
months with respect to any Mortgagor; and provided, further, that such
modifications shall not be made in excess of 5% of the aggregate of the Group I
Original Balance and the Group II Original Balance without the prior written
consent of the Certificate Insurer; provided, further, however, that, if the
Certificate Insurer has not given its consent within five (5) Business Days
after notice from the Master Servicer, the Certificate Insurer shall be deemed
to have given its consent to such modification or rescheduling for payments of
delinquent payments; provided, however, that such notice and consent shall not
be required in the event that the Master Servicer determines, in its good faith
business judgment that such modification is legally required to be made prior to
such five day period, in which case the Master Servicer shall give the
Certificate Insurer immediate notice of such action.

                  (b)      The Master Servicer shall hold in escrow on behalf of
the related Mortgagor all Prepaid Installments received by it, and shall apply
such Prepaid Installments as directed by such Mortgagor and as set forth in the
related Note.

                  SECTION 8.03 Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers. The Master Servicer may and is hereby authorized to perform
any of its servicing responsibilities with respect to all or certain of the
Mortgage Loans through a Sub-Servicer, which may be an Affiliate. Pursuant to
the foregoing, the Master Servicer may enter into Sub-Servicing Agreements for
any servicing and administration of Mortgage Loans with any institution which is
in compliance with the laws of each state necessary to enable it to perform its
obligations under such Sub-Servicing Agreement. The Master Servicer shall give
notice to the Certificate Insurer and the Trustee of the appointment of any
Sub-Servicer which is not a Master Servicer Affiliate. The Master Servicer shall
also furnish to the Certificate Insurer and the Trustee a copy of the
Sub-Servicing Agreement, except when the Sub-Servicer is a Master Servicer
Affiliate. For purposes of this Agreement, the Master Servicer shall be deemed
to have received payments on Mortgage Loans when any Sub-Servicer has received
such

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payments. Any such Sub-Servicing Agreement shall be consistent with and not
violate the provisions of this Agreement.

                  By delivery of the Certificate Insurance Policy, the
Certificate Insurer is deemed to have approved Advanta National Bank and Advanta
Finance Corp. as Sub-Servicers hereunder.

                  SECTION 8.04 Successor Sub-Servicers. The Master Servicer may
terminate any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement and either directly service the
related Mortgage Loans itself or enter into a Sub-Servicing Agreement with a
successor Sub-Servicers that qualifies under Section 8.03.

                  SECTION 8.05 Liability of Master Servicer. The Master Servicer
shall not be relieved of its obligations under this Agreement notwithstanding
any Sub-Servicing Agreement between the Master Servicer and a Sub-Servicer or
otherwise, and the Master Servicer shall be obligated to the same extent and
under the same terms and conditions as if it 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 such Sub-Servicing
Agreement shall be deemed to limit or modify this Agreement. The Trust shall not
indemnify the Master Servicer for any losses due to the Master Servicer's
negligence.

                  SECTION 8.06 No Contractual Relationship Between Sub-Servicer
and Trustee or the Owners. Any Sub-Servicing Agreement and any other
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
shall be deemed to be between the Sub-Servicer and the Master Servicer alone and
the Certificate Insurer, the Trustee and the Owners shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to any Sub-Servicer except as set forth in Section 8.07.

                  SECTION 8.07 Assumption or Termination of Sub-Servicing
Agreement by Trustee. In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Master
Servicer hereunder by the Trustee pursuant to Section 8.20, it is understood and
agreed that the Master Servicer's rights and obligations under any Sub-Servicing
Agreement then in force between the Master Servicer and a Sub-Servicer may be
assumed or terminated by the Trustee at its option. Any termination fee due
under any such Sub-Servicing agreement shall be paid by the preceding Master
Servicer but in no event shall the Trustee be liable for any such fee.

                  The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party documents and
records relating to each Sub-Servicing Agreement and an accounting of amounts
collected and held by it and otherwise use its best reasonable efforts to effect
the orderly and efficient transfer of

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the Sub-Servicing Agreements to the assuming party, without the payment of any
fee by the Trustee, notwithstanding any contrary provision in any Sub-Servicing
Agreement.

                  SECTION 8.08 Principal and Interest Account. (a) The Master
Servicer and/or each Sub-Servicer, as applicable, shall establish and maintain
at one or more Designated Depository Institutions in the name of the Trust for
the benefit of the Owners of the Certificates and the Certificate Insurer, as
their interests may appear, a Principal and Interest Account. The establishment
of the Principal and Interest Account shall be evidenced by the Master
Servicer's delivery of a notice in the form of Exhibit C hereto, properly
completed.

                  Subject to Subsections (c) and (e) below, the Master Servicer
and any Sub-Servicer shall deposit all receipts of principal and accrued
interest related to the Mortgage Loans in each such Mortgage Loan Group to the
Principal and Interest Account on a daily basis (but no later than the second
Business Day after receipt).

                  (b)      All funds in the Principal and Interest Account may
only be held (i) uninvested, up to the limits insured by the FDIC or (ii)
invested in Eligible Investments. The Principal and Interest Account shall be
held in trust in the name of the Trust and for the benefit of the Owners of the
Certificates and the Certificate Insurer. Any investment earnings on funds held
in the Principal and Interest Account shall be for the account of the Master
Servicer. Any references herein to amounts on deposit in the Principal and
Interest Account shall refer to amounts net of such investment earnings. Any
investment losses are at the expense of the Master Servicer and shall be
replaced on or prior to the Remittance Date.

                  (c)      With respect to the Mortgage Loans and subject to
Section 8.08(e), the Master Servicer shall deposit to the Principal and Interest
Account all principal collected and interest accrued on or after the Initial
Cut-Off Date, related Subsequent Cut-Off Date or Replacement Cut-Off Date
including any Prepaid Installments, Prepayments, Net Liquidation Proceeds, all
Loan Purchase Prices and Substitution Amounts received or paid by the Master
Servicer, other recoveries or amounts received by the Master Servicer,
Compensating Interest and Delinquency Advances together with any amounts which
are reimbursable from such Principal and Interest Account, but net of (i) the
Servicing Fee and other servicing compensation due to the Master Servicer as
permitted by Section 8.15 hereof, (ii) principal (including Prepayments)
collected on the related Mortgage Loans prior to the Initial Cut-Off Date,
Subsequent Cut-Off Date or Replacement Cut-Off Date (iii) interest accruing on
the related Mortgage Loans prior to the Initial Cut-Off Date, Subsequent Cut-Off
Date or Replacement Cut-Off Date and (iv) Net Liquidation Proceeds to the extent
such Net Liquidation Proceeds exceed the sum of the Loan Balance of the related
Mortgage Loan and accrued and unpaid interest thereon.

                  (d)      (i)      The Master Servicer may make withdrawals
         from the Principal and Interest Account only for the following
         purposes:

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                           (A)      to effect the timely remittance to the
                                    Trustee of the Monthly Remittance Amounts
                                    due on the Remittance Date;

                           (B)      to reimburse itself pursuant to Section
                                    8.09(a) hereof for unreimbursed Delinquency
                                    Advances and Servicing Advances and
                                    Nonrecoverable Advances;

                           (C)      to withdraw investment earnings on amounts
                                    on deposit in the Principal and Interest
                                    Account, if such investment earnings have
                                    been deposited in the Principal and Interest
                                    Account;

                           (D)      to withdraw amounts that have been deposited
                                    to a Principal and Interest Account in
                                    error;

                           (E)      to clear and terminate each Principal and
                                    Interest Account following the termination
                                    of the Trust pursuant to Article X; and

                           (F)      to invest in Eligible Investments.

                  (ii)     On the tenth day of each month, the Master Servicer
         shall send to the Trustee a computer tape, detailing the payments on
         the Mortgage Loans during the prior Remittance Period. Such tape shall
         be in the form and have the specifications as may be agreed to between
         the Master Servicer and the Trustee from time to time. The Certificate
         Insurer shall have the right to request this computer tape upon
         providing three (3) Business Days' written notice to the Master
         Servicer. Upon any change in the format of the electronic medium
         maintained by the Master Servicer in respect of the Mortgage Loans, the
         Master Servicer shall deliver a copy of such electronic medium to the
         Trustee.

                  (iii)    On each Remittance Date, the Master Servicer shall
         remit to the Trustee by wire transfer in immediately available funds
         for deposit in the Certificate Account the amounts specified in Section
         7.05(a) of this Agreement, (A) for Group I, the Group I Monthly
         Remittance Amount and (B) for Group II and the Group II Monthly
         Remittance Amount.

                  (e)      To the extent that the ratings, if any, then assigned
to the unsecured debt of the Master Servicer or of the Master Servicer's
ultimate corporate parent are satisfactory to the Certificate Insurer and each
Rating Agency, then the requirement to maintain the Principal and Interest
Account and deposit of principal collections and accrued interest may be waived
by an instrument signed by the Certificate Insurer and each Rating Agency, and
the Master Servicer may be allowed to co-mingle with its general funds the
amounts otherwise required to be deposited to the Principal and Interest
Account, on such terms and subject to such conditions as the Certificate Insurer
and each Rating Agency may permit.

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                  SECTION 8.09 Delinquency Advances, Compensating Interest and
Servicing Advances. (a) The Master Servicer is required, not later than each
Remittance Date, to deposit into the Principal and Interest Account an amount
equal to the sum of the interest portions accrued (net of the Servicing Fees and
certain other administrative amounts, if any) with respect to Delinquent
Mortgage Loans during the related Remittance Period but not collected on or
prior to such Remittance Date, but only if, in its good faith business judgment,
the Master Servicer reasonably believes that such amount will ultimately be
recoverable from the related Mortgage Loan. Such amounts are "Delinquency
Advances".

                  The Master Servicer shall be permitted to fund its payment of
Delinquency Advances on any Remittance Date and to reimburse itself for any
Delinquency Advances paid from the Master Servicer's own funds, (x) from
subsequent collections on the related Mortgage Loan or (y) from collections on
other Mortgage Loans deposited to the Principal and Interest Account subsequent
to the related Remittance Period; provided, that, with respect to clause (y)
above, the Master Servicer shall deposit into the Principal and Interest Account
with respect thereto (i) late collections from the Mortgagor whose Delinquency
gave rise to the shortfall which resulted in such Delinquency Advance, (ii) Net
Liquidation Proceeds recovered on account of the related Mortgage Loan and/or
(iii) its own funds, the sum of which shall equal the aggregate amount of
collections utilized pursuant to clause (y). If not therefore recovered from the
related Mortgagor or the related Net Liquidation Proceeds, Delinquency Advances
constituting Nonrecoverable Advances shall be recoverable pursuant to Section
7.05(c)(xvi) hereof.

                  The parties hereto intend the provision of this Section
8.09(a) to comply with Treasury Regulation Section 1.860G-2(c)(3).

                  (b)      On or prior to each Remittance Date, the Master
Servicer shall deposit in the Principal and Interest Account with respect to any
full Prepayment received on a Mortgage Loan during the related Remittance Period
Compensating Interest out of its own funds, without any right of reimbursement
therefor. "Compensating Interest" shall equal the lesser of (i) the aggregate of
the Prepayment Interest Shortfalls for the related Remittance Period and (ii)
the aggregate Servicing Fee received by the Master Servicer with respect to all
Mortgage Loans in the related Mortgage Loan Group for such Remittance Period; in
no event shall the Master Servicer be required to pay Compensating Interest with
respect to any Remittance Period in an amount in excess of the aggregate
Servicing Fee received by the Master Servicer with respect to all Mortgage Loans
in the related Mortgage Loan Group for such Remittance Period nor shall it be
required to pay Compensating Interest due to partial prepayments or Civil Relief
Act Shortfalls. "Prepayment Interest Shortfall" for any Mortgage Loan prepaid in
full shall be an amount equal to the difference between (x) 30 days' interest at
the Mortgage Loan's Coupon Rate (less the Servicing Fee) on the Loan Balance of
such Mortgage Loan as of the first day of the related Remittance Period and (y)
the interest (less the Servicing Fee) paid by the Mortgagor with respect to the
Mortgage Loan during such Remittance Period.

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<PAGE>   98
                  The parties hereto intend the provisions of this Section
8.09(b) to comply with Treasury Regulation Section 1.860G-2(e).

                  (c) The Master Servicer will pay all "out-of-pocket" costs and
expenses incurred by the Master Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) Preservation
Expenses (including the payment of flood insurance premiums), (ii) any
enforcement or judicial proceedings, including (a) foreclosures, and (b) other
legal actions and costs associated therewith that potentially affect the
existence, validity, priority, enforceability or collectibility of the Mortgage
Loans, including collection agency fees and costs of pursuing or obtaining
personal judgments, garnishments, levies, attachment and similar actions, (iii)
the conservation, management, liquidation, sale or other disposition of any
Mortgaged Property acquired in satisfaction of the related Mortgage Loan,
including reasonable fees paid to any independent contractor in connection
therewith, and (iv) advances to keep liens current; and with respect to any of
the foregoing, the Master Servicer is only required to pay such costs and
expenses to the extent the Master Servicer reasonably believes such costs and
expenses will be recoverable from the related Mortgage Loan. Each such amount so
paid will constitute a "Servicing Advance". The Master Servicer may recover
Servicing Advances (x) from the Mortgagors to the extent permitted by the
Mortgage Loans, (y) from Liquidation Proceeds realized upon the liquidation of
the related Mortgage Note and (z) as provided in Section 7.05(c)(xvi) hereof. In
no case may the Master Servicer recover Servicing Advances from principal and
interest payments on any other Mortgage Loan or from any amounts relating to any
other Mortgage Loan except as provided pursuant to Section 7.05(c)(xvi) hereof.

                  The parties intend that the provisions of this Section 8.09(c)
comply with Treasury Regulation Section 1.860G-2(c)(3)(iii).

                  (d) On the first Remittance Date following the Startup Day,
the Master Servicer shall make an advance (a "Special Advance") with respect to
each Mortgage Loan Group equal to the sum of one-month's interest, calculated at
the weighted average Pass-Through Rate (applicable to such Payment Date, as the
case may be, for the classes of Class A Certificates related to such Group) with
respect to all Mortgage Loans not having a payment due prior to June 2000; the
amounts of such Special Advances shall be included in the related Interest
Remittance Amount. Special Advances are Nonrecoverable Advances, reimbursement
of which shall be made only as provided in Section 7.05(c)(xx).

                  SECTION 8.10  Purchase of Mortgage Loans. The Master Servicer
may, but is not obligated to, purchase for its own account any Mortgage Loan
which becomes Delinquent, in whole or in part, as to four consecutive monthly
installments or any Mortgage Loan as to which enforcement proceedings have been
brought by the Master Servicer or by any Sub-Servicer pursuant to Section 8.13.
Any such Mortgage Loan shall be purchased by the Master Servicer on a Remittance
Date at a purchase price equal to the Loan Purchase Price thereof, which
purchase price shall be deposited in the Principal and Interest Account.
Notwithstanding the foregoing, the Master Servicer may not purchase any such
Mortgage Loan unless the Master Servicer has delivered to the

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Trustee and the Certificate Insurer an opinion of counsel experienced in federal
income tax matters acceptable to the Trustee to the effect that such a purchase
would not constitute a Prohibited Transaction for the Trust or otherwise subject
the Trust to tax and would not jeopardize the status of either the Upper-Tier
REMIC or the Lower-Tier REMIC as a REMIC.

                  SECTION 8.11 Maintenance of Insurance. (a) The Master Servicer
shall cause to be maintained with respect to each Mortgage Loan either a blanket
insurance policy as described in Section 8.11(c) hereof or a hazard insurance
policy that provides for fire and extended coverage, and which provides for a
recovery by the Master Servicer on behalf of the Trust of insurance proceeds
relating to such Mortgage Loan in an amount not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the minimum amount
required to compensate for damage or loss on a replacement cost basis and (iii)
the full insurable value of the premises.

                  (b) If the Mortgage Loan at the time of origination relates to
a Property 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 with respect thereto either a master policy as
described in Section 8.11(c) hereof or a flood insurance policy in a form
meeting the requirements of the current guidelines of the Federal Insurance
Administration. Such policy shall provide for a recovery by the Master Servicer
on behalf of the Trust of insurance proceeds relating to such Mortgage Loan of
not less than the least of (i) the outstanding principal balance of the Mortgage
Loan, (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973. The Master Servicer
shall indemnify the Trust and the Certificate Insurer out of the Master
Servicer's own funds for any loss to the Trust and the Certificate Insurer
resulting from the Master Servicer's failure to maintain the insurance required
by this Section.

                  (c) In the event that the Master Servicer shall obtain and
maintain a blanket insurance policy insuring against fire and hazards and a
master policy insuring against flood for Properties located in designated flood
zones of extended coverage on all of the Mortgage Loans, then, to the extent
such policy names the Master Servicer as loss payee and provides coverage in an
amount equal to the aggregate unpaid principal balance on the Mortgage Loans
without co-insurance, and otherwise complies with the requirements of this
Section 8.11, the Master Servicer shall be deemed conclusively to have satisfied
its obligations with respect to fire, flood and hazard insurance coverage under
this Section 8.11. 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 Property a policy complying with paragraphs (a) and
(b) of this Section 8.11, and there shall have been a loss which would have been
covered by such policy, deposit in the Principal and Interest Account from the
Master Servicer's own funds the difference, if any, between the amount that
would have been payable under a policy complying with paragraphs (a) and (b) of
this Section 8.11 and the amount paid under such policy. Upon the request of the
Trustee or the Certificate Insurer, the Master Servicer shall cause to be
delivered to the Trustee or the Certificate Insurer, a certified true copy of
such policy.

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                  The parties hereto intend that the provisions of this Section
8.11 comply with Treasury Regulation Section 1.860G-2(c)(3)(ii).

                  SECTION 8.12 Due-on-Sale Clauses; Assumption and Substitution
Agreements. When a Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Note; provided, however, that the Master Servicer
shall not exercise any such right if (i) the "due-on-sale" clause, in the
reasonable belief of the Master Servicer, is not enforceable under applicable
law or (ii) the Master Servicer reasonably believes that to permit an assumption
of the Mortgage Loan would not materially and adversely affect the interest of
the Owners or of the Certificate Insurer. In such event, the Master Servicer
shall enter into an assumption and modification agreement with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Note and, unless prohibited by applicable law or
the Mortgage Documents, the Mortgagor remains liable thereon. If the foregoing
is not permitted under applicable law, the Master Servicer is 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 Mortgagor and becomes liable under the Note; provided, however,
that to the extent any such substitution of liability agreement would be
delivered by the Master Servicer outside of its usual procedures for mortgage
loans held in its own portfolio the Master Servicer shall, prior to executing
and delivering such agreement, obtain the prior written consent of the Control
Party. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Master
Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement, which copy shall be added by the
Trustee to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Master Servicer shall
be responsible for recording or causing the recordation any such assumption or
substitution agreements. In connection with any such assumption or substitution
agreement, the required monthly payment on the related Mortgage Loan shall not
be changed but shall remain as in effect immediately prior to the assumption or
substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Master
Servicer or the Sub-Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Master Servicer as additional servicing compensation.

                  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 any assumption which the
Master Servicer may be restricted by law from preventing, for any reason
whatsoever.

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                  SECTION 8.13 Realization Upon Defaulted Mortgage Loans. (a)
The Master Servicer shall foreclose upon or otherwise comparably effect the
ownership on behalf of the Trust of Properties relating to defaulted Mortgage
Loans as to which no satisfactory arrangements can be made for collection of
Delinquent payments and which the Master Servicer has not purchased pursuant to
Section 8.10. In connection with such foreclosure or other conversion, the
Master Servicer shall exercise such of the rights and powers vested in it
hereunder, and use the same degree of care and skill in their exercise or use,
as prudent mortgage lenders would exercise or use under the circumstances in the
conduct of their own affairs, including, but not limited to, advancing funds for
the payment of taxes, amounts due with respect to Senior Liens, and insurance
premiums. Any amounts so advanced shall constitute "Servicing Advances" within
the meaning of Section 8.09(c) hereof. The Master Servicer shall sell any REO
Property within 35 months of its acquisition by the Trust, unless the Master
Servicer obtains for the Trustee an opinion of counsel experienced in federal
income tax matters, addressed to the Trustee, the Certificate Insurer and the
Master Servicer, to the effect that the holding by the Trust of such REO
Property for any greater period will not result in the imposition of taxes on
"Prohibited Transactions" of the Trust or any REMIC therein as defined in
Section 860F of the Code or cause either the Upper-Tier REMIC or the Lower-Tier
REMIC to fail to qualify as a REMIC under the REMIC Provisions at any time that
any Certificates are outstanding.

                  Notwithstanding the generality of the foregoing provisions,
the Master Servicer shall manage, conserve, protect and operate each REO
Property for the Owners and the Certificate Insurer solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the Upper-Tier REMIC
or the Lower-Tier REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Owners, rent the same, or
any part thereof, as the Master Servicer deems to be in the best interest of the
Owners for the period prior to the sale of such REO Property. The Master
Servicer shall take into account the existence of any hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource Conservation
and Recovery Act of 1976, or other federal, state or local environmental
legislation, on a REO Property in determining whether to foreclose upon or
otherwise comparably convert the ownership of such REO Property. With respect to
any Mortgage Loan secured by a mixed use REO Property, the Master Servicer
shall, prior to foreclosing upon or otherwise comparably effecting the ownership
in the name of the Master Servicer on behalf of the Trust, either (x) perform a
"phase one environmental study" of such REO Property or (y) repurchase such REO
Property at the Loan Purchase Price.

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                  (b) The Master Servicer shall determine, with respect to each
defaulted Mortgage Loan, when it has recovered, whether through trustee's sale,
foreclosure sale or otherwise, all amounts it expects to recover from or on
account of such defaulted Mortgage Loan (exclusive of any possibility of a
deficiency judgment), whereupon such Mortgage Loan shall become a "Liquidated
Loan" and, if requested, shall promptly deliver to the Certificate Insurer a
related liquidation report with respect to such Liquidated Loan.

                  SECTION 8.14 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan (including the repurchase of
any Mortgage Loan or any liquidation of such Mortgage Loan through foreclosure
or otherwise), or the receipt by the Master Servicer or any Sub-Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer or any Sub-Servicer shall deliver to the
Trustee a Master Servicer's Trust Receipt. Upon receipt of such Master
Servicer's Trust Receipt, the Trustee shall promptly release the related
Mortgage File, as directed by the Master Servicer in the Master Servicer's Trust
Receipt. Upon any such payment in full, or the receipt of such notification that
such funds have been placed in escrow, the Master Servicer or any Sub-Servicer
is authorized to give, as attorney-in-fact for the Trustee and the mortgagee
under the Mortgage which secured the Note, an instrument of satisfaction (or
assignment of Mortgage without recourse) regarding the Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Principal and Interest Account. In
lieu of executing any such satisfaction or assignment the Master Servicer or any
Sub-Servicer may prepare and submit to the Trustee, a satisfaction (or
assignment without recourse, if requested by the Person or Persons entitled
thereto) in form for execution by the Trustee with all requisite information
completed by the Master Servicer or any Sub-Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment and deliver the
same with the related Mortgage File, as aforesaid.

                  (b) From time to time and as appropriate in the servicing of
any Mortgage Loan, including, without limitation, foreclosure or other
comparable conversion of a Mortgage Loan or collection under any applicable
Mortgage Insurance Policy, the Trustee shall (except in the case of the payment
or liquidation pursuant to which the related Mortgage File is released to an
escrow agent or an employee, agent or attorney of the Trustee), upon request of
the Master Servicer or any Sub-Servicer and delivery to the Trustee of a Master
Servicer's Trust Receipt, release the related Mortgage File to the Master
Servicer and shall execute such documents as shall be necessary to the
prosecution of any such proceedings, including, without limitation, an
assignment without recourse of the related Mortgage to the Master Servicer;
provided, that the Master Servicer shall not have received and not returned at
any one time more than 10% of the entire number of Mortgage Files. The Trustee
shall complete in the name of the Trustee any endorsement in blank on any Note
prior to releasing such Note to the Master Servicer or any Sub-Servicer. Such
receipt shall obligate the Master Servicer or any Sub-

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Servicer to return the Mortgage File to the Trustee when the need therefor by
the Master Servicer or any Sub-Servicer no longer exists unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of the liquidation
information, in physical or electronic form acceptable to the Master Servicer
and the Trustee, a copy of the Master Servicer's Trust Receipt shall be released
by the Trustee to the Master Servicer or any Sub-Servicer.

                  (c) No costs associated with the procedures described in this
Section 8.14 shall be an expense of the Trust.

                  (d) The provisions set forth in Subsections (a) and (b) may be
superseded by any waiver of the Document Delivery Requirement as may be given by
the Certificate Insurer and the Rating Agencies pursuant to Section 3.05(j)
hereof.

                  (e) Each Master Servicer's Trust Receipt may be delivered to
the Trustee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Master Servicer and the Trustee shall mutually agree. The Trustee shall
promptly release the related Mortgage File(s) no later than seven (7) business
days of receipt of a properly completed Master Servicer's Trust Receipt or such
shorter period as may be agreed upon by the Master Servicer and the Trustee.
Receipt of a Master Servicer's Trust Receipt shall be authorization to the
Trustee to release such Mortgage Files, provided the Trustee has determined that
such Master Servicer's Trust Receipt has been executed, with respect to clauses
(i) or (ii) above, or approved, with respect to clause (iii) above, by an
Authorized Officer of the Master Servicer or any Sub-Servicer, and so long as
the Trustee complies with its duties and obligations under this Agreement. If
the Trustee is unable to release the Mortgage Files within the time frames
previously specified, the Trustee shall immediately notify the Master Servicer
or any Sub-Servicer indicating the reason for such delay, but in no event shall
such notification be later than five business days after receipt of a Master
Servicer's Trust Receipt. If the Master Servicer is required to pay penalties or
damages due to the Trustee's negligent failure to release the related Mortgage
File or the Trustee's negligent failure to execute and release documents in a
timely manner, the Trustee shall be liable for such penalties or damages.

                  SECTION 8.15 Servicing Compensation. As compensation for its
activities hereunder, the Master Servicer shall be entitled to retain the amount
of the Servicing Fee with respect to each Mortgage Loan. Additional servicing
compensation in the form of investment income on the Principal and Interest
Account, the Capitalized Interest Account, and on the Certificate Account,
prepayment charges, release fees, bad check charges, assumption fees, late
payment charges, any other servicing-related fees, Net Liquidation Proceeds not
required to be deposited in the Principal and Interest Account pursuant to
Section 8.08(c)(v) and similar items may, to the extent collected from
Mortgagors, be retained by the Master Servicer.

                  SECTION 8.16 Annual Statement as to Compliance. The Master
Servicer, at its own expense, will deliver to the Trustee and the Certificate
Insurer, on or before the last day of March of each year, commencing in the year
2001, an Officer's

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Certificate stating, as to each signer thereof, that (i) a review of the
activities of the Master Servicer during such preceding calendar 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 its obligations under this Agreement for such
year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the nature
and status thereof including the steps being taken by the Master Servicer to
remedy such defaults.

                  SECTION 8.17 Annual Independent Certified Public Accountants'
Reports. On or before the last day of March of each year, commencing in the year
2001, the Master Servicer, at its own expense, shall cause to be delivered to
the Trustee and the Certificate Insurer a letter or letters of a firm of
independent, nationally recognized certified public accountants reasonably
acceptable to the Control Party stating that such firm has, with respect to the
Master Servicer's overall servicing operations (i) performed applicable tests in
accordance with the compliance testing procedures as set forth in Appendix 3 of
the Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees or (ii)
examined such operations in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers, and in either case stating such
firm's conclusions relating thereto or (iii) examined such operations in
accordance with the requirements of SAS 70.

                  SECTION 8.18 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Master Servicer shall provide to the Trustee
and the Certificate Insurer access to the documentation regarding the Mortgage
Loans required by applicable state and federal regulations, such access being
afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Master Servicer.

                  SECTION 8.19 Assignment of Agreement. The Master Servicer may
not assign its obligations under this Agreement, in whole or in part, unless it
shall have first obtained the written consent of the Trustee and the Certificate
Insurer, which such consent shall not be unreasonably withheld; provided,
however, that any assignee must meet the eligibility requirements set forth in
Section 8.20(g) hereof for a successor servicer; and provided, further, this
Section 8.19 does not apply to the appointment of Sub-Servicers or to any
assignment to a Master Servicer Affiliate. Notice of any such assignment shall
be given by the Master Servicer to the Trustee, the Certificate Insurer,
Standard & Poor's and Moody's.

                  SECTION 8.20 Removal of Master Servicer; Resignation of Master
Servicer. (a) The Trustee, with the consent of the Certificate Insurer (or the
Owners pursuant to Section 6.11 hereof) may remove the Master Servicer upon the
occurrence of any of the following events:

                  (i) The Master Servicer shall fail to deliver to the Trustee
         any proceeds or required payment, which failure continues unremedied
         for five

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         Business Days following written notice to an Authorized Officer of the
         Master Servicer from the Trustee or from any Owner.

                  (ii) The Master Servicer shall (A) apply for or consent to the
         appointment of a receiver, trustee, liquidator or custodian or similar
         entity with respect to itself or its property, (B) admit in writing its
         inability to pay its debts generally as they become due, (C) make a
         general assignment for the benefit of creditors, (D) be adjudicated a
         bankrupt or insolvent, (E) commence a voluntary case under the federal
         bankruptcy laws of the United States of America or file a voluntary
         petition or answer seeking reorganization, an arrangement with
         creditors or an order for relief or seeking to take advantage of any
         insolvency law or file an answer admitting the material allegations of
         a petition filed against it in any bankruptcy, reorganization or
         insolvency proceeding or (F) take corporate action for the purpose of
         effecting any of the foregoing;

                  (iii) If without the application, approval or consent of the
         Master Servicer, a proceeding shall be instituted in any court of
         competent jurisdiction, under any law relating to bankruptcy,
         insolvency, reorganization or relief of debtors, seeking in respect of
         the Master Servicer an order for relief or an adjudication in
         bankruptcy, reorganization, dissolution, winding up, liquidation, a
         composition or arrangement with creditors, a readjustment of debts, the
         appointment of a trustee, receiver, liquidator or custodian or similar
         entity with respect to the Master Servicer or of all or any substantial
         part of its assets, or other like relief in respect thereof under any
         bankruptcy or insolvency law, and, if such proceeding is being
         contested by the Master Servicer in good faith, the same shall (A)
         result in the entry of an order for relief or any such adjudication or
         appointment or (B) continue undismissed or pending and unstayed for any
         period of seventy-five (75) consecutive days; or

                  (iv) The Master Servicer shall fail to perform any one or more
         of its obligations hereunder other than the obligations contemplated by
         Subsection 8.20(i) above, and shall continue in default thereof for a
         period of sixty (60) days after notice by the Trustee or the
         Certificate Insurer of said failure; provided, however, that if the
         Master Servicer can demonstrate to the reasonable satisfaction of the
         Control Party that it is diligently pursuing remedial action, then the
         cure period may be extended with the written approval of the Control
         Party; or

                  (v) The Master Servicer shall fail to cure any breach of any
         of its representations and warranties set forth in Section 3.02 which
         materially and adversely affects the interests of the Owners or the
         Certificate Insurer for a period of thirty (30) days after the Master
         Servicer's discovery or receipt of notice thereof; provided, however,
         that if the Master Servicer can demonstrate to the reasonable
         satisfaction of the Control Party that it is diligently pursuing
         remedial action, then the cure period may be extended with the written
         approval of the Control Party.

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                  (b) The Certificate Insurer also may remove the Master
Servicer upon the occurrence of any of the following events:

                  (i) upon the making of any Insured Payment; provided, however,
         that the Certificate Insurer shall have no right to remove the Master
         Servicer under this clause (i) if the Master Servicer can demonstrate
         to the reasonable satisfaction of the Certificate Insurer that such
         event was due to circumstances beyond the control of the Master
         Servicer; or

                  (ii) the failure by the Master Servicer to make any required
         Servicing Advance; or

                  (iii) the failure by the Master Servicer to perform any one or
         more of its obligations hereunder or under the Insurance Agreement,
         which failure materially and adversely affects the interests of the
         Certificate Insurer and the Trustee; or

                  (iv) the failure by the Master Servicer to make any required
         Delinquency Advance, any Special Advance or to pay any Compensating
         Interest; or

                  (v) the occurrence of a Servicer Termination Loss Trigger or
         of a Servicer Termination Delinquency Trigger, as such terms are
         defined in the Insurance Agreement; or

                  (vi) the enactment of any law by a legislative body that
         declares, or any finding or ruling by a court of competent
         jurisdiction, that the Insurance Agreement or this Agreement is not
         valid and binding on the Sponsor or the Master Servicer;

provided, however, with respect to clause (iv), if the Master Servicer can
demonstrate to the reasonable satisfaction of the Control Party that any such
event was due to circumstances beyond the control of the Master Servicer, such
event shall not be considered an event of termination of the Master Servicer;

provided, however, that (x) prior to any removal of the Master Servicer by the
Control Party pursuant to clauses (i) or (ii) of this Section 8.20(b), the
Master Servicer shall first have been given by the Control Party and by
registered or certified mail, notice of the occurrence of one or more of the
events set forth in clauses (i), (ii) or (iii) above and the Master Servicer
shall not have remedied, or shall not have taken actions satisfactory to the
Control Party to remedy, such event or events within 30 days (60 days with
respect to clause (iii)) after the Master Servicer's receipt of such notice
(provided, however, that if the Master Servicer can demonstrate to the
reasonable satisfaction of the Control Party that it is diligently pursuing
remedial action, then the cure period in each case may be extended with the
written approval of the Control Party) and (y) in the event of the refusal or
inability of the Master Servicer to make any required Delinquency Advance or
Special Advance or to pay any Compensating Interest (as described in clause
(iv)) or Monthly Remittance, such removal shall be effective (without the
requirement of any action on the part of the Certificate Insurer or of the
Trustee) at 4 p.m. on the second

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Business Day following the day on which the Trustee or the Certificate Insurer
notifies an Authorized Officer of the Master Servicer that a required
Delinquency Advance or Special Advance has not been received by the Trustee.
Upon the Trustee's determination that a required Delinquency Advance or Special
Advance or payment of Compensating Interest has not been made by the Master
Servicer, the Trustee shall so notify in writing an Authorized Officer of the
Master Servicer and the Certificate Insurer as soon as is reasonably practical.

                  (c) The Master Servicer shall not resign from the obligations
and duties hereby imposed on it, except upon determination that its duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it,
the other activities of the Master Servicer so causing such a conflict being of
a type and nature carried on by the Master Servicer at the date of this
Agreement. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an opinion of counsel to such effect which shall
be delivered to the Trustee and the Certificate Insurer.

                  (d) No removal or resignation of the Master Servicer shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities and obligations in accordance with this
Agreement. If no successor servicer is available, the Trustee shall act as
successor servicer and perform all of the obligations of this Agreement,
including, without limitation, making Delinquency Advances, Servicing Advances
and paying Compensating Interest; provided, however, that the Trustee will not
be obligated to act as successor servicer if it is legally unable to perform its
duties hereunder.

                  (e) Upon removal or resignation of the Master Servicer, the
Master Servicer also shall promptly deliver or cause to be delivered to a
successor servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Master Servicer has
maintained for the Mortgage Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Master Servicer's possession.

                  (f) Any collections received by the Master Servicer after
removal or resignation shall be endorsed by it to the Trustee and remitted
directly and immediately to the Trustee or the successor Master Servicer.

                  (g) Upon removal or resignation of the Master Servicer, the
Trustee (x) may solicit bids for a successor 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. The Trustee shall, if it
is unable to obtain a qualifying bid and is prevented by law from acting as
Master Servicer, appoint, or petition a court of competent jurisdiction to
appoint, any housing and home finance institution, bank or mortgage servicing
institution which has shareholders' equity of not less than $10,000,000, as
determined in accordance with generally accepted accounting principles, and
acceptable to the Certificate Insurer as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the

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Master Servicer hereunder. The compensation of any successor servicer
(including, without limitation, the Trustee) so appointed shall be the aggregate
Servicing Fees, together with the other servicing compensation in the form of
assumption fees, late payment charges or otherwise as provided in Sections 8.08
and 8.15; provided, however, that if the Trustee acts as successor Master
Servicer then the Sponsor agrees to pay to the Trustee at such time that the
Trustee becomes such successor Master Servicer a fee of twenty-five dollars
($25.00) for each Mortgage Loan then included in the Trust Estate. The Trustee
shall be obligated to serve as successor Master Servicer whether or not the
$25.00 fee described in the preceding sentence is paid by the Sponsor, but shall
in any event be entitled to receive, and to enforce payment of, such fee from
the Sponsor.

                  (h) In the event the Trustee solicits bids as provided above,
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. Such public announcement shall specify that the
successor Master Servicer shall be entitled to the compensation set forth in
clause (g) above. Within thirty (30) days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid. The Trustee shall deduct 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 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,
transfer and assignment to the Master Servicer's successor.

                  (i) The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Master Servicer agrees to cooperate with the Trustee and any
successor Master Servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Master Servicer, as applicable, all documents and
records reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and shall promptly also transfer to the Trustee or such
successor Master Servicer, as applicable, all amounts which then have been or
should have been deposited in the Principal and Interest Account by the Master
Servicer or which are thereafter received with respect to the Mortgage Loans.
Neither the Trustee nor any other successor Master Servicer shall be held liable
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Master
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Master Servicer or (iii) any breaches of a predecessor Master Servicer.

                  (j) The Trustee or any other successor Master Servicer, upon
assuming the duties of Master Servicer hereunder, shall immediately make all
Delinquency Advances and pay all Compensating Interest which the Master Servicer
has theretofore failed to remit with respect to the Mortgage Loans; provided,
however, that if

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the Trustee is acting as successor Master Servicer, the Trustee shall only be
required to make Delinquency Advances (including the Delinquency Advances
required to be made by the predecessor Master Servicer but not so deposited) if,
in the Trustee's reasonable good faith judgment, such Delinquency Advances will
ultimately be recoverable from the related Mortgage Loans.

                  (k) The Master Servicer which is being removed or is resigning
shall give notice to the Mortgagors and to each Rating Agency of the transfer of
the servicing to the successor.

                  (l) The Trustee shall give notice to the Certificate Insurer,
each Rating Agency and to the Owners of the occurrence of any event specified in
Section 8.20(a) of which the Trustee has knowledge.

                  (m) Notwithstanding anything herein to the contrary, upon
termination of the Master Servicer hereunder, any liabilities of the Master
Servicer which accrued prior to such termination shall survive such termination.

                  SECTION 8.21 Inspections by the Certificate Insurer and the
Trustee; Errors and Omissions Insurance. (a) At any reasonable time during
business hours and from time to time upon five (5) Business Days' reasonable
notice, the Certificate Insurer, the Trustee, or any agents or representatives
thereof may inspect the Master Servicer's servicing operations and discuss the
servicing operations of the Master Servicer with any of its officers or
directors. The reasonable costs and expenses incurred by the Master Servicer in
connection with any such examinations or discussions shall be paid by the Master
Servicer.

                  (b) The Master Servicer agrees to maintain errors and
omissions coverage and a fidelity bond, each at least to the extent generally
maintained by prudent mortgage loan servicers having servicing portfolios of a
similar size.

                  SECTION 8.22 Merger, Conversion, Consolidation or Succession
to Business of Master Servicer. Any corporation into which the Master Servicer
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Master Servicer shall be a party, or any corporation succeeding to all or
substantially all of the business of the Master Servicer, shall be the successor
of the Master Servicer hereunder upon notice to the Certificate Insurer (subject
to the requirements of Section 2.03 of the Insurance Agreement), without the
execution or filing of any paper or any further act on the part of any of the
parties hereto provided that such corporation is a housing and home finance
institution, bank or mortgage servicing institution which has shareholders'
equity of not less than $10,000,000, as determined in accordance with generally
accepted accounting principles.

                  SECTION 8.23 Notices of Material Events. The Master Servicer
shall give prompt notice to the Certificate Insurer, the Trustee, and each
Rating Agency of the occurrence of any of the following events:

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                  (a) Any default or any fact or event which results, or which
         with notice or the passage of time, or both, would result in the
         occurrence of a default by the Sponsor or the Master Servicer under any
         Transaction Document or would constitute a material breach of a
         representation, warranty or covenant under any Transaction Document
         which would have a material adverse effect on the Owners or the
         Certificate Insurer;

                  (b) The submission of any claim or the initiation of any legal
         process, litigation or administrative or judicial investigation against
         the Sponsor, the Master Servicer or AMHC in any federal, state or local
         court or before any governmental body or agency, or before any
         arbitration board, or any such proceedings threatened by any
         governmental agency, which, if adversely determined, would have a
         material adverse effect upon any the Sponsor's, the Master Servicer's
         or AMHC's ability to perform its obligations under any Transaction
         Document;

                  (c) The commencement of any proceedings by or against the
         Sponsor, the Master Servicer or AMHC under any applicable bankruptcy,
         reorganization, liquidation, insolvency or other similar law now or
         hereafter in effect or of any proceeding in which a receiver,
         liquidator, trustee or other similar official shall have been, or may
         be, appointed or requested for the Sponsor, the Master Servicer or
         AMHC; and

                  (d) The receipt of notice from any agency or governmental body
         having authority over the conduct of any of the Sponsor's the Master
         Servicer's or the AMHC's business that the Sponsor, the Master Servicer
         or AMHC is to cease and desist, or to undertake any practice, program,
         procedure or policy employed by the Sponsor, the Master Servicer or
         AMHC in the conduct of the business of any of them, and such cessation
         or undertaking will materially adversely affect the conduct of the
         Sponsor's, the Master Servicer's or AMHC's business or its ability to
         perform under the Transaction Documents or materially adversely affect
         the financial affairs of the Sponsor, the Master Servicer or AMHC.

                                   ARTICLE IX

                              TERMINATION OF TRUST

                  SECTION 9.01 Termination of Trust. The Trust created hereunder
and all obligations created by this Agreement will terminate upon the earlier of
(i) the payment to the Owners of all Certificates from amounts other than those
available under the Certificate Insurance Policy of all amounts held by the
Trustee and required to be paid to such Owners pursuant to this Agreement upon
the later to occur of (a) the final payment or other liquidation (or any advance
made with respect thereto) of the last Mortgage Loan in the Trust Estate or (b)
the disposition of all property acquired in respect of any Mortgage Loan
remaining in the Trust Estate, (ii) at any time when a Qualified Liquidation of
the REMIC Trust is effected as described below or (iii) as described in Section
9.02 or 9.03 hereof. To effect a termination of this Agreement

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pursuant to clause (ii) above, the Owners of all Certificates then Outstanding
shall (x) unanimously direct the Trustee on behalf of the Upper-Tier REMIC and
the Lower-Tier REMIC to adopt a plan of complete liquidation with respect to
each of the Mortgage Loan Groups as contemplated by Section 860F(a)(4) of the
Code and (y) provide to the Trustee an opinion of counsel experienced in federal
income tax matters to the effect that such liquidation constitutes a Qualified
Liquidation, and the Trustee either shall sell the Mortgage Loans and distribute
the proceeds of the liquidation of the Trust Estate, or shall distribute
equitably in kind all of the assets of the Trust Estate to the remaining Owners
of the Certificates based on their interests in the Trust, and distribute to the
Certificate Insurer any amounts owed under the Insurance Agreement and return
the Certificate Insurance Policy to the Certificate Insurer, each in accordance
with such plan, so that the liquidation or distribution of the Trust Estate, the
distribution of any proceeds of the liquidation and the termination of this
Agreement occur no later than the close of the 90th day after the date of
adoption of the plan of liquidation and such liquidation qualifies as a
Qualified Liquidation. In no event, however, will the Trust created by this
Agreement continue beyond the expiration of twenty-one (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 United Kingdom, living on the date
hereof. The Trustee shall give written notice of termination of the Agreement to
each Owner in the manner set forth in Section 11.05.

                  SECTION 9.02 Clean-Up Call Termination. (a) On any Remittance
Date on or after the Initial Clean-Up Call Date, either the Master Servicer or
any Master Servicer Affiliate (the Master Servicer or any Master Servicer
Affiliate, the "Redeeming Party") may determine to purchase and may cause the
purchase from the Trust of all (but not fewer than all) Mortgage Loans in the
Trust Estate and all property theretofore acquired in respect of any such
Mortgage Loan by foreclosure, deed in lieu of foreclosure, or otherwise then
remaining in the Trust Estate at a price equal to the sum of (v) the greater of
(i) 100% of the aggregate Loan Balances of all of the Mortgage Loans as of the
day of purchase minus the amount actually remitted by the Master Servicer
representing the related Group I Principal Remittance Amount and Group II
Principal Remittance Amount on such Remittance Date for the related Remittance
Period and (ii) the fair market value of such Mortgage Loans (disregarding
accrued interest), (w) if the Master Servicer is the Redeeming Party, the amount
of any difference between the related Group I Interest Remittance Amount and
Group II Interest Remittance Amount actually remitted by the Master Servicer on
such Remittance Date and the related amount due on such Remittance Date, (x) the
related Reimbursement Amount, if any, and (y) if the Master Servicer is the
Redeeming Party, the aggregate amount of any Delinquency Advances and Servicing
Advances remaining unreimbursed, together with any accrued and unpaid Servicing
Fees, as of such Remittance Date (such amount, the "Termination Price");
provided, that the Certificate Insurer must consent to any such purchase if it
would result in a draw on the Certificate Insurance Policy. In connection with
such purchase, the Redeeming Party shall remit to the Trustee all amounts then
on deposit in the Principal and Interest Account for deposit to the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase. Notwithstanding the foregoing, the Redeeming Party may not
terminate the Trust

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pursuant to this Section 9.02 without the consent of the Certificate Insurer, if
termination would result in a draw on the Certificate Insurance Policy.

                  (b) In connection with any such purchase, the Redeeming Party
shall provide to the Trustee an opinion of counsel experienced in federal income
tax matters to the effect that such purchase constitutes a Qualified Liquidation
of the Upper-Tier REMIC and the Lower-Tier REMIC.

                  (c) Promptly following any such purchase, the Trustee will
release the Mortgage Files to the Redeeming Party, or otherwise upon their
order, in a manner similar to that described in Section 8.14 hereof.

                  (d) Upon such purchase, the Certificate Insurance Policy will
terminate and shall be returned to the Certificate Insurer.

                  SECTION 9.03 Termination Upon Loss of REMIC Status. (a)
Following a (x) final determination by the Internal Revenue Service, or by a
court of competent jurisdiction, in either case from which no appeal is taken
within the permitted time for such appeal, or (y) if any appeal is taken,
following a final determination of such appeal from which no further appeal can
be taken, to the effect that either the Upper-Tier REMIC or the Lower-Tier REMIC
does not and will no longer qualify as a REMIC pursuant to Section 860D of the
Code (the "Final Determination") or (z) following the delivery of an opinion of
counsel ("REMIC Opinion") to the effect that the effect of the Final
Determination is to increase substantially the probability that either the
Upper-Tier REMIC or the Lower-Tier REMIC will no longer qualify as a "REMIC"
pursuant to Section 860D of the Code, on any Remittance Date on or after the
date which is 30 calendar days following such Final Determination, the
Certificate Insurer, or if Certificate Insurer Default has occurred and is
continuing, the Owners of a majority in Percentage Interest represented by the
Class A Certificates then Outstanding may direct the Trustee to adopt a plan of
complete liquidation with respect to the Trust Estate. In connection with such
liquidation, the Master Servicer shall remit to the Trustee all amounts then on
deposit in the Principal and Interest Account for deposit in the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such liquidation.

                  (b) Upon receipt of such direction from the Certificate
Insurer or the Owners of such Class R-II Certificates, as applicable, the
Trustee shall notify the Master Servicer and holders of the Class R-II
Certificates of such election to liquidate or such determination to purchase, as
the case may be, (the "Termination Notice"). The Master Servicer or Owner of a
majority of the Percentage Interest of the Class R Certificates then Outstanding
acting directly or through one or more of their affiliates may, on any
Remittance Date, within 60 days from the date of receipt of the Termination
Notice (the "Purchase Option Period"), at their option, purchase from the Trust
all (but not fewer than all) Mortgage Loans in the Trust Estate, and all
property theretofore acquired by foreclosure, deed in lieu of foreclosure, or
otherwise in respect of any Mortgage Loan then remaining in the Trust Estate at
a purchase price equal to the Termination Price.

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                  (c) If, during the Purchase Option Period, the Master Servicer
or the Owners of the Class R-II Certificates have not exercised the option
described in the immediately preceding paragraph, then upon the expiration of
the Purchase Option Period in the event that the Owners of the Class A
Certificates have given the Trustee the direction described in clause (a)(i)
above, the Trustee shall (with the prior consent of the Certificate Insurer, so
long as no Certificate Insurer Default has occurred and is continuing) sell the
Mortgage Loans and distribute the proceeds of the liquidation of the Trust
Estate, such that, if so directed, the liquidation of the Trust Estate, the
distribution of the proceeds of such liquidation occur no later than the close
of the 60th day, or such later day as the Owner of a majority of the Percentage
Interest of the Class A Certificates shall permit or direct in writing, after
the expiration of the Purchase Option Period.

                  (d) Following a Final Determination, the Owners of a majority
of the Percentage Interest of the Class R-II Certificates then Outstanding may,
at their option on any Remittance Date and upon delivery to the Owners of the
Class A Certificates and the Trustee of an opinion of counsel experienced in
federal income tax matters selected by the Owners of a majority of the
Percentage Interest of such Class R-II Certificates which opinion shall be
reasonably satisfactory in form and substance to a majority of the Percentage
Interests represented by the Class A Certificates then Outstanding and the
Trustee, to the effect that the effect of the Final Determination is to increase
substantially the probability that the gross income of either the Upper-Tier
REMIC or the Lower-Tier REMIC will be subject to federal taxation, purchase from
the Trust all (but not fewer than all) Mortgage Loans in the Trust Estate, and
all property theretofore acquired by foreclosure, deed in lieu of foreclosure,
or otherwise in respect of any Mortgage Loan then remaining in the Trust Estate
at a purchase price equal to the Termination Price. In connection with such
purchase, the Master Servicer shall remit to the Trustee all amounts then on
deposit in the Principal and Interest Account for deposit to the Certificate
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase. The foregoing opinion shall be deemed satisfactory unless the
Owners of a majority of the Percentage Interest represented by the Class A
Certificates then Outstanding or the Trustee give the Owners of a majority of
the Percentage Interest of the Class R-II Certificates notice that such opinion
is not satisfactory within thirty days after receipt of such opinion.

                  SECTION 9.04 Disposition of Proceeds. The Trustee shall, upon
receipt thereof, deposit the proceeds of any liquidation of the Trust Estate
pursuant to this Article IX to the Certificate Account; provided, however, that
any amounts representing Servicing Fees, unreimbursed Delinquency Advances or
unreimbursed Servicing Advances theretofore funded by the Master Servicer from
the Master Servicer's own funds shall be paid by the Trustee to the Master
Servicer.

                  SECTION 9.05 Netting of Amounts. If any Person paying the
Termination Price would receive a portion of the amount so paid, such Person may
net any such amount against the Termination Price otherwise payable.

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                                    ARTICLE X

                                  THE TRUSTEE

                  SECTION 10.01 Certain Duties and Responsibilities. (a) The
Trustee (i) undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee and (ii) in
the absence of bad faith on its part, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished pursuant to and conforming to the
requirements of this Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Agreement.

                  (b) Notwithstanding the appointment of the Master Servicer
hereunder, the Trustee is hereby empowered to perform the duties of the Master
Servicer hereunder whether following the failure of the Master Servicer to
perform, pursuant to Section 8.20 hereof or otherwise. Specifically, and not in
limitation of the foregoing, the Trustee shall have the power:

                  (i) to collect Mortgagor payments;

                  (ii) to foreclose on defaulted Mortgage Loans;

                  (iii) to enforce due-on-sale clauses and to enter into
         assumption and substitution agreements as permitted by Section 8.12
         hereof;

                  (iv) to deliver instruments of satisfaction pursuant to
         Section 8.14;

                  (v) to make Delinquency Advances and Servicing Advances and to
         pay Compensating Interest, and

                  (vi) to enforce the Mortgage Loans.

                  (c) 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 willful misconduct, except that:

                  (i) this subsection shall not be construed to limit the effect
         of subsection (a) of this Section;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by an Authorized Officer, unless it shall be proved
         that the Trustee was negligent in ascertaining the pertinent facts; and

                  (iii) the Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in good faith in accordance
         with the direction of the

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         Certificate Insurer or of the Owners of a majority in Percentage
         Interest of the Certificates of the affected Class or Classes and the
         Certificate Insurer relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee, under this
         Agreement relating to such Certificates.

                  (d) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.

                  (e) No provision of this Agreement shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

                  (f) The permissive right of the Trustee to take actions
enumerated in this Agreement shall not be construed as a duty and the Trustee
shall not be answerable for other than its own negligence or willful misconduct.

                  (g) The Trustee shall be under no obligation to institute any
suit, or to take any remedial proceeding under this Agreement, or to take any
steps in the execution of the trusts hereby created or in the enforcement of any
rights and powers hereunder until it shall be indemnified to its satisfaction
against any and all costs and expenses, outlays and counsel fees and other
reasonable disbursements and against all liability, except liability which is
adjudicated to have resulted from its negligence or willful misconduct, in
connection with any action so taken. The Trustee shall receive from the Sponsor
promptly upon demand therefor, reimbursement of expenses as are described in the
fee quote letter, dated May 11, 2000 and executed by the Sponsor.

                  SECTION 10.02 Removal of Trustee for Cause. (a) The Trustee
may be removed pursuant to paragraph (b) hereof upon the occurrence of any of
the following events (whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                  (i) the Trustee shall fail to distribute to the Owners
         entitled thereto on any Payment Date amounts available for distribution
         in accordance with the terms hereof; or

                  (ii) the Trustee shall fail in the performance of, or breach,
         any covenant or agreement of the Trustee in this Agreement, or if any
         representation or warranty of the Trustee made in this Agreement or in
         any certificate or other writing delivered pursuant hereto or in
         connection herewith shall prove to be incorrect in any material respect
         as of the time when the same shall have been made, and such failure or
         breach shall continue or not be cured for a period of 30

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         days after there shall have been given, by registered or certified
         mail, to the Trustee by the Sponsor, the Certificate Insurer or by the
         Owners of at least 25% of the aggregate Percentage Interests
         represented by the Class A Certificates then Outstanding a written
         notice specifying such failure or breach and requiring it to be
         remedied; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction for the appointment of a conservator or
         receiver or liquidator in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings, or for
         the winding-up or liquidation of its affairs, shall have been entered
         against the Trustee, and such decree or order shall have remained in
         force undischarged or unstayed for a period of 75 days; or

                  (iv) a conservator or receiver or liquidator or sequestrator
         or custodian of the property of the Trustee is appointed in any
         insolvency, readjustment of debt, marshalling of assets and liabilities
         or similar proceedings of or relating to the Trustee or relating to all
         or substantially all of its property; or

                  (v) the Trustee shall become insolvent (however insolvency is
         evidenced), generally fail to pay its debts as they come due, file or
         consent to the filing of a petition to take advantage of any applicable
         insolvency or reorganization statute, make an assignment for the
         benefit of its creditors, voluntarily suspend payment of its
         obligations, or take corporate action for the purpose of any of the
         foregoing.

                  The Sponsor shall give to the Certificate Insurer and each
Rating Agency notice of the occurrence of any such event of which the Sponsor is
aware.

                  (b) If any event described in paragraph (a) occurs and is
continuing, then and in every such case (i) the Certificate Insurer or (ii) with
the prior written consent (which shall not be unreasonably withheld) of the
Certificate Insurer (x) the Sponsor or (y) the Owners of a majority of the
Percentage Interests represented by the Class A Certificates, or, if there are
no Class A Certificates then Outstanding, by such Percentage Interest
represented by any Class of Class R Certificates then Outstanding may, whether
or not the Trustee resigns pursuant to Section 10.09 hereof, immediately,
concurrently with the giving of notice to the Trustee, and without delaying the
30 days required for notice therein, appoint a successor Trustee pursuant to the
terms of Section 10.09 hereof.

                  SECTION 10.03 Certain Rights of the Trustee. Except as
otherwise provided in Section 10.01 hereof:

                  (a) the Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, note or other paper or document
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

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                  (b) any request or direction of the Sponsor, the Certificate
         Insurer or the Owners of any Class of Certificates mentioned herein
         shall be sufficiently evidenced in writing;

                  (c) whenever in the administration of this Agreement the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officer's
         Certificate;

                  (d) the Trustee may consult with counsel, and the written
         advice of such counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in reasonable reliance thereon;

                  (e) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement at the request
         or direction of any of the Owners pursuant to this Agreement, unless
         such Owners shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which might be
         incurred by it in compliance with such request or direction;

                  (f) 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, direction,
         consent, order, bond, note or other paper or document, but the Trustee
         in its discretion may make such further inquiry or investigation into
         such facts or matters as it may see fit;

                  (g) 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 the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed and supervised with due care by it hereunder; and

                  (h) the Trustee shall not be liable for any action it takes or
         omits to take in good faith which it reasonably believes to be
         authorized by the Authorized Officer of any Person or within its rights
         or powers under this Agreement other than as to validity and
         sufficiency of its authentication of the Certificates.

                  SECTION 10.04 Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates, except any
such recitals relating to the Trustee, shall be taken as the statements of the
Sponsor and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or sufficiency of this
Agreement or of the Certificates other than as to validity and sufficiency of
its authentication of the Certificates.

                  SECTION 10.05 May Hold Certificates. The Trustee or any agent
of the Trust, in its individual or any other capacity, may become an Owner or
pledgee of

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Certificates and may otherwise deal with the Trust with the same rights it would
have if it were not Trustee or such agent.

                  SECTION 10.06 Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other trust funds except to the
extent required herein or required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Sponsor and except to the extent of income or other gain on
investments which are deposits in or certificates of deposit of the Trustee in
its commercial capacity and income or other gain actually received by the
Trustee on Eligible Investments.

                  SECTION 10.07 No Lien for Fees. The Trustee shall have no lien
on the Trust Estate for the payment of any fees and expenses.

                  SECTION 10.08 Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a corporation or
association organized and doing business under the laws of the United States of
America or of any State authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $100,000,000, subject
to supervision or examination by the United States of America or any such State
having a rating or ratings acceptable to the Certificate Insurer or, if the last
sentence of Section 11.18 hereof is applicable, the Sponsor and having (x)
long-term, unsecured debt rated at least A-1 by Moody's (or such lower rating as
may be acceptable to Moody's) and (y) a short-term deposit rating of at least
A-1 from Standard & Poor's (or such lower rating as may be acceptable to
Standard & Poor's). If such Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, 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 condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall, upon the request of
the Sponsor (with the consent of the Certificate Insurer) (which consent shall
not be unreasonably withheld) or of the Certificate Insurer, resign immediately
in the manner and with the effect hereinafter specified in this Article X.

                  SECTION 10.09 Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor trustee under Section 10.10 hereof.

                  (b) The Trustee, or any trustee or trustees hereafter
appointed, may resign at any time by giving written notice of resignation to the
Sponsor and by mailing notice of resignation by first-class mail, postage
prepaid, to the Certificate Insurer and the Owners at their addresses appearing
on the Register. A copy of such notice shall be sent by the resigning Trustee to
each Rating Agency. Upon receiving notice of resignation, the Sponsor shall
promptly appoint a successor trustee or trustees by written instrument, in
duplicate, executed on behalf of the Trust by an Authorized Officer of the
Sponsor, one copy of which instrument shall be delivered to the Trustee so
resigning and one copy

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to the successor trustee or trustees. If no successor trustee shall have been
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, or any Owner may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

                  (c) If at any time the Trustee shall cease to be eligible
under Section 10.08 hereof and shall fail to resign after written request
therefor by the Sponsor or by the Certificate Insurer, the Certificate Insurer
or the Sponsor (with the written consent of the Certificate Insurer) may remove
the Trustee and appoint a successor trustee by written instrument, in duplicate,
executed on behalf of the Trust by an Authorized Officer of the Sponsor, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.

                  (d) The Owners of a majority of the Percentage Interests
represented by the Class A Certificates, or, if there are no Class A
Certificates then Outstanding, by such majority of the Percentage Interests
represented by Class R Certificates then Outstanding may at any time, with the
prior written consent of the Certificate Insurer, remove the Trustee and appoint
a successor trustee by delivering to the Trustee to be removed, to the successor
trustee so appointed, to the Sponsor and to the Certificate Insurer, copies of
the record of the act taken by the Owners, as provided for in Section 11.03
hereof.

                  (e) If the Trustee fails to perform its duties in accordance
with the terms of this Agreement or becomes ineligible to serve as Trustee, the
Certificate Insurer or, if the last sentence of Section 11.18 hereof is
applicable, the Sponsor may remove the Trustee and appoint a successor trustee
by written instrument, in triplicate, signed by the Certificate Insurer and the
Sponsor duly authorized, one complete set of which instruments shall be
delivered to the Sponsor, one complete set to the Certificate Insurer, one
complete set to the Trustee so removed and one complete set to the successor
Trustee so appointed.

                  (f) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, the Sponsor shall promptly appoint a successor Trustee acceptable
to the Certificate Insurer. If within one year after such resignation, removal
or incapability or the occurrence of such vacancy, a successor Trustee shall be
appointed by act of the Owners of a majority of the Percentage Interests
represented by the Class A Certificates then Outstanding or, if there are no
Class A Certificates then Outstanding, by such majority of the Percentage
Interest of the Class R Certificates delivered to the Sponsor and the retiring
Trustee, the successor Trustee so appointed shall forthwith upon its acceptance
of such appointment become the successor Trustee and supersede the successor
Trustee appointed by the Sponsor. If no successor Trustee shall have been so
appointed by the Sponsor or the Owners and shall have accepted appointment in
the manner hereinafter provided, any Owner may, on behalf of himself and all
others similarly situated, petition any court of competent

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jurisdiction for the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.

                  (g) The Sponsor shall give notice of any removal of the
Trustee by mailing notice of such event by first-class mail, postage prepaid, to
the Certificate Insurer and to the Owners as their names and addresses appear in
the Register. Each notice shall include the name of the successor Trustee and
the address of its corporate trust office.

                  SECTION 10.10 Acceptance of Appointment by Successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Sponsor on behalf of the Trust and to its predecessor Trustee an
instrument accepting such appointment hereunder and stating its eligibility to
serve as Trustee 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 vested with all the rights,
powers, trusts, duties and obligations of its predecessor hereunder; but, on
request of the Sponsor or the successor Trustee, such predecessor Trustee shall,
upon payment of its charges then unpaid, execute and deliver an instrument
transferring to such successor Trustee all of the rights, powers and trusts of
the Trustee so ceasing to act, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such Trustee so ceasing to
act hereunder. Upon request of any such successor Trustee, the Sponsor on behalf
of the Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

                  Upon acceptance of appointment by a successor Trustee as
provided in this Section, the Sponsor shall mail notice thereof by first-class
mail, postage prepaid, to the Owners at their last addresses appearing upon the
Register. The Sponsor shall send a copy of such notice to each of the Rating
Agencies and the Certificate Insurer. If the Sponsor fails to mail such notice
within ten days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Trust.

                  No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor shall be qualified and eligible under
this Article X.

                  SECTION 10.11 Merger, Conversion, Consolidation or Succession
to Business of the 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 all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation or
association shall be otherwise qualified and eligible under this Article X. In
case any Certificates have been executed, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such Trustee
may adopt such execution and deliver the

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Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.

                  SECTION 10.12 Reporting; Withholding. With respect to each of
the REMIC Trusts and the Non-REMIC Estate, the Trustee shall timely provide to
the Owners (or other Persons entitled thereto) the Internal Revenue Service's
Form 1099 and any other statement required by applicable Treasury regulations or
analogous provisions of state or local law as determined by the Sponsor, and
shall withhold, as required by applicable law, federal, state or local taxes, if
any, applicable to distributions to the Owners, including, but not limited to,
backup withholding under Section 3406 of the Code, the withholding tax on
distributions to foreign investors under Sections 1441 and 1442 of the Code and
beginning after December 31, 2000, shall report as effectively connected income
distributions with respect to Supplemental Interest Rights held by foreign
holders if such holders have not provided certification that such distributions
are not effectively connected income.

                  SECTION 10.13 Liability of the Trustee. The Trustee shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Trustee herein. Neither the Trustee nor any
of the directors, officers, employees or agents of the Trustee shall be under
any liability on any Certificate or otherwise to any Account, the Sponsor, the
Master Servicer or any Owner 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 Trustee
or any such Person against any liability which would otherwise be imposed by
reason of negligent action, negligent failure to act or bad faith in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Subject to the foregoing sentence, the Trustee shall not be
liable for losses on investments of amounts in any Account (except for any
losses on obligations on which the bank serving as Trustee is the obligor and is
otherwise liable). In addition, the Sponsor and Master Servicer covenant and
agree to indemnify the Trustee, and its officers, directors, employees and
agents, including, without limitation, when the Trustee is acting as Master
Servicer, and hold it harmless against, any and all losses, liabilities,
damages, claims or expenses (including legal fees and expenses) other than those
resulting from the negligence or bad faith of the Trustee. The indemnification
provided in this Section 10.13 shall survive the termination of this Agreement
or the resignation or removal of the Trustee hereunder. The Trustee and any
director, officer, employee or agent of the Trustee may rely and shall be
protected in acting or refraining from acting in good faith on any certificate,
notice or other document of any kind prima facie properly executed and submitted
by the Authorized Officer of any Person respecting any matters arising
hereunder.

                  SECTION 10.14 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or Property 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
and the Certificate Insurer to act as co-Trustee or co-

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Trustees, jointly with the Trustee, of all or any part of the Trust Estate or
separate Trustee or separate Trustees of any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Owners, such title to the Trust Estate, or any part thereof, and, subject to the
other provisions of this Section 10.14, 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 the case any
event indicated in Sections 8.20(a) or 8.20(b) shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment with
the consent of the Certificate Insurer. No co-Trustee or separate Trustee
hereunder shall be required to meet the terms of eligibility as a successor
Trustee under Section 10.08 and no notice to Owner of the appointment of any
co-Trustee or separate Trustee shall be required under Section 10.08.

                  Every separate Trustee and co-Trustee shall, to the extent
permitted, be appointed and act subject to the following provisions and
conditions:

                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee shall be conferred or imposed upon and
         exercised or performed by the Trustee and such separate Trustee or
         co-Trustee jointly (it being understood that such separate Trustee or
         co-Trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (whether as Trustee hereunder or as successor to the Master Servicer
         hereunder), the Trustee shall be incompetent or unqualified to perform
         such act or acts, in which event such rights, powers, duties and
         obligations (including the holding of title to the Trust Estate or any
         portion thereof in any such jurisdiction) shall be exercised and
         performed singly by such separate Trustee or co-Trustee, but solely at
         the direction of the Trustee;

                  (ii) No co-Trustee hereunder shall be held personally liable
         by reason of any act or omission of any other co-Trustee hereunder; and

                  (iii) The Master Servicer and the Trustee acting jointly may
         at any time accept the resignation of or remove any separate Trustee or
         co-Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate Trustees and
co-Trustees, as effectively as if given to each of them. Every instrument
appointing any separate Trustee or co-Trustee shall refer to this Agreement and
the conditions of this Section 10.14. Each separate Trustee and co-Trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Master Servicer.

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                  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.

                  The Trustee shall give to the Rating Agencies, the Sponsor and
the Certificate Insurer notice of the appointment of any Co-Trustee or separate
Trustee.

                                   ARTICLE XI

                                 MISCELLANEOUS

                  SECTION 11.01 Compliance Certificates and Opinions. Upon any
application or request by the Sponsor, the Certificate Insurer or the Owners to
the Trustee to take any action under any provision of this Agreement, the
Sponsor, the Certificate Insurer or the Owners, as the case may be, shall
furnish to the Trustee a certificate stating that all conditions precedent, if
applicable, provided for in this Agreement relating to the proposed action have
been complied with, except that in the case of any such application or request
as to which the furnishing of any documents is specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate need be furnished.

                  SECTION 11.02 Form of Documents Delivered to the Trustee. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.

                  Any certificate of an Authorized Officer of the Trustee may be
based, insofar as it relates to legal matters, upon an opinion of counsel,
unless such Authorized Officer knows, or in the exercise of reasonable care
should know, that the opinion is erroneous. Any such certificate of an
Authorized Officer of the Trustee or any opinion of counsel may be based,
insofar as it relates to factual matter upon a certificate or opinion of, or
representations by, one or more Authorized Officers of the Sponsor or of the
Master Servicer, stating that the information with respect to such factual
matters is in the possession of the Sponsor or of the Master Servicer, unless
such Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any opinion of counsel may also be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer of the Trustee, stating that the
information with respect to such matters is in the possession of the Trustee,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or

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opinion or representations with respect to such matters are erroneous. Any
opinion of counsel may be based on the written opinion of other counsel, in
which event such opinion of counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Trustee may reasonably rely upon the opinion
of such other counsel.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.

                  SECTION 11.03 Acts of Owners. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by the Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Owners in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Sponsor and/or the Certificate Insurer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Owners signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.

                  (c) The ownership of Certificates shall be proved by the
Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Owner of any Certificate shall bind the
Owner of every Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee or the Trust in reliance thereon, whether or
not notation of such action is made upon such Certificates.

                  SECTION 11.04 Notices, etc., to Trustee. Any request, demand,
authorization, direction, notice, consent, waiver or act of the Owners or other
documents provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with the Trustee by any Owner, the Certificate Insurer or
by the Sponsor shall be

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sufficient for every purpose hereunder if made, given, furnished or filed in
writing to and received by the Trustee at its corporate trust office as set
forth in Section 2.02 hereof.

                  SECTION 11.05 Notices and Reports to Owners; Waiver of
Notices. Where this Agreement provides for notice to Owners of any event or the
mailing of any report to Owners, such notice or report shall be sufficiently
given (unless otherwise herein expressly provided) if mailed, first-class
postage prepaid, to each Owner affected by such event or to whom such report is
required to be mailed, at the address of such Owner as it appears on the
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Owners is mailed in the manner provided
above, neither the failure to mail such notice or report nor any defect in any
notice or report so mailed to any particular Owner shall affect the sufficiency
of such notice or report with respect to other Owners, and any notice or report
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given or provided.

                  Where this Agreement provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Owners shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

                  In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Owners when such notice is required
to be given pursuant to any provision of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.

                  Where this Agreement provides for notice to any rating agency
that rated any Certificates, failure to give such notice shall not affect any
other rights or obligations created hereunder.

                  SECTION 11.06 Rules by Trustee and Sponsor. The Trustee may
make reasonable rules for any meeting of Owners. The Sponsor may make reasonable
rules and set reasonable requirements for its functions.

                  SECTION 11.07 Successors and Assigns. All covenants and
agreements in this Agreement by any party hereto shall bind its successors and
assigns, whether so expressed or not.

                  SECTION 11.08 Severability. In case any provision in this
Agreement or in the Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

                  SECTION 11.09 Benefits of Agreement. Nothing in this Agreement
or in the Certificates, expressed or implied, shall give to any Person, other
than the Owners,

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the Certificate Insurer and the parties hereto and their successors hereunder,
any benefit or any legal or equitable right, remedy or claim under this
Agreement.

                  SECTION 11.10 Legal Holidays. In any case where the date of
any Payment Date, any other date on which any distribution to any Owner is
proposed to be paid, or any date on which a notice is required to be sent to any
Person pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Certificates or this Agreement)
payment or mailing need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made or mailed on
the nominal date of any such Payment Date, or such other date for the payment of
any distribution to any Owner or the mailing of such notice, as the case may be,
and no interest on such payment shall accrue for the period from and after any
such nominal date, provided such payment is made in full on such next succeeding
Business Day.

                  SECTION 11.11 Governing Law. In view of the fact that Owners
are expected to reside in many states and outside the United States and the
desire to establish with certainty that this Agreement will be governed by and
construed and interpreted in accordance with the law of a state having a
well-developed body of commercial and financial law relevant to transactions of
the type contemplated herein, this Agreement and each Certificate shall be
construed in accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed therein.

                  SECTION 11.12 Counterparts. This instrument may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

                  SECTION 11.13  Usury. The amount of interest payable or paid
on any Certificate under the terms of this Agreement shall be limited to an
amount which shall not exceed the maximum nonusurious rate of interest allowed
by the applicable laws of the State of New York or any applicable law of the
United States permitting a higher maximum nonusurious rate that preempts such
applicable New York laws, which could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Certificate exceeds the Highest Lawful Rate, the Trust stipulates that such
excess amount will be deemed to have been paid to the Owner of such Certificate
as a result of an error on the part of the Trustee acting on behalf of the Trust
and the Owner receiving such excess payment shall promptly, upon discovery of
such error or upon notice thereof from the Trustee on behalf of the Trust,
refund the amount of such excess or, at the option of such Owner, apply the
excess to the payment of principal of such Certificate, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Trustee for the
benefit of Owners of Certificates for the use, forbearance or detention of money
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Certificates.

                  SECTION 11.14 Amendment. (a) The Trustee, the Sponsor and the
Master Servicer, may at any time and from time to time, with the prior written
consent of the Certificate Insurer but without the giving of notice to or the
receipt of the consent of

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the Owners, amend this Agreement, and the Trustee shall consent to such
amendment, for the purpose of (i) curing any ambiguity, or correcting or
supplementing any provision hereof which may be inconsistent with any other
provision hereof or of the Transaction Documents, or to add provisions hereto
which are not inconsistent with the provisions hereof, (ii) upon receipt of an
opinion of counsel experienced in federal income tax matters to the effect that
no entity-level tax will be imposed on either the Upper-Tier REMIC or the
Lower-Tier REMIC or upon the transferor of a Class R-I or Class R-II Certificate
as a result of the ownership of any Class R-I or Class R-II Certificate by a
Disqualified Organization, removing the restriction on transfer set forth in
Section 5.08(b) hereof or (iii) complying with the requirements of the Code and
the regulations proposed or promulgated thereunder; provided, however, that any
such action shall not, as evidenced by an opinion of counsel delivered to the
Trustee, materially and adversely affect the interests of any Owner (without its
written consent).

                  (b) The Trustee, the Sponsor and the Master Servicer may, at
any time and from time to time, with the prior written consent of the
Certificate Insurer but without the giving of notice to or the receipt of the
consent of the Owners, amend this Agreement, and the Trustee shall consent to
such amendment, for the purpose of changing the definitions of "Group I
Specified Overcollateralization Amount," and "Group II Specified
Overcollateralization Amount"; provided, however, that no such change shall
affect the weighted average life of the related Class of Class A Certificates
(assuming an appropriate prepayment speed as determined by the Representative)
by more than five percent, as determined by the Representative.

                  (c) This Agreement may also be amended by the Trustee, the
Sponsor, and the Master Servicer at any time and from time to time, with the
prior written approval of the Certificate Insurer and not less than a majority
of the Percentage Interest represented by each affected Class of Certificates
then Outstanding, for the purpose of adding any provisions or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Owners hereunder; provided, however, that no such
amendment shall (a) change in any manner the amount of, or change the timing of,
payments which are required to be distributed to any Owner without the consent
of the Owner of such Certificate, (b) change or reduce the aforesaid percentages
of Percentage Interests which are required to consent to any such amendments or
(c) result in a down-rating or withdrawal of any ratings then assigned to the
Class A Certificates, without the consent of the Owners of all Certificates of
the Class or Classes affected then Outstanding.

                  (d) Each proposed amendment to this Agreement shall be
accompanied by an opinion of counsel nationally recognized in federal income tax
matters addressed to the Trustee and to the Certificate Insurer to the effect
that such amendment would not adversely affect the status of either the
Upper-Tier REMIC or the Lower-Tier REMIC. Neither such opinion of counsel nor
any expense of any such proposed amendment shall be at the Trustee's expense.

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                  (e) The Certificate Insurer, the Owners and each Rating Agency
shall be provided with copies of any amendments to this Agreement, together with
copies of any opinions or other documents or instruments executed in connection
therewith.

                  SECTION 11.15 REMIC Status; Taxes. (a) The Tax Matters Person
shall prepare and file or cause to be filed with the Internal Revenue Service
federal tax or information returns with respect to the Upper-Tier REMIC and the
Lower-Tier REMIC and the Certificates containing such information and at the
times and in such manner as may be required by the Code or applicable Treasury
regulations, and shall furnish to Owners such statements or information at the
times and in such manner as may be required thereby. For this purpose, the Tax
Matters Person may, but need not, rely on any proposed regulations of the United
States Department of the Treasury. The Tax Matters Person shall indicate the
election to treat each of the Upper-Tier REMIC and the Lower-Tier REMIC as a
REMIC (which election shall apply to the taxable period ending December 31, 2000
and each calendar year thereafter) in such manner as the Code or applicable
Treasury regulations may prescribe. The Trustee, as agent for the Tax Matters
Person appointed pursuant to Section 11.17 hereof, shall sign all tax
information returns filed pursuant to this Section 11.15. The Tax Matters Person
shall provide information necessary for the computation of tax imposed on the
transfer of a Class R-I or Class R-II Certificate to a Disqualified
Organization, or an agent of a Disqualified Organization, or a pass-through
entity in which a Disqualified Organization is the record holder of an interest.
The Tax Matters Person shall provide the Trustee with copies of any Federal tax
or information returns filed, or caused to be filed, by the Tax Matters Person
with respect to the REMIC Trust or the Certificates.

                  (b) The Tax Matters Person shall timely file all reports
required to be filed by the Trust with any federal, state or local governmental
authority having jurisdiction over the Trust, including other reports that must
be filed with the Owners, such as the Internal Revenue Service's Form 1066 and
Schedule Q and the form required under Section 6050K of the Code, if applicable
to REMICs. The Trustee shall be liable to the Master Servicer and the Sponsor
for any penalties or interest as a result of its negligence with respect to such
filings. Furthermore, the Tax Matters Person shall report to Owners, if
required, with respect to the allocation of expenses pursuant to Section 212 of
the Code in accordance with the specific instructions to the Tax Matters Person
by the Sponsor with respect to such allocation of expenses. The Tax Matters
Person shall collect any forms or reports from the Owners determined by the
Sponsor to be required under applicable federal, state and local tax laws. The
Trustee shall provide copies of all filings to the Master Servicer within 15
days of the required date of such filing. In addition, the Trustee agrees not to
file more than one extension per required filing without prior consultation
with, and the consent of, the Master Servicer. Further, the Trustee shall
provide to the Sponsor and the Master Servicer access to any documentation
regarding its tax reporting duties hereunder as well as providing access to the
Trustee's officers and personnel in order to discuss the methodology and
preparation of any filings or returns hereunder. Such access shall be provided
to the Master Servicer and the Sponsor without cost or charge.

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                  (c) The Tax Matters Person shall provide to the Internal
Revenue Service and to persons described in Section 860E(e)(3) and (6) of the
Code the information described in Treasury Regulation Section
1.860D-1(b)(5)(ii), or any successor regulation thereto. With respect to either
the Upper-Tier REMIC or the Lower-Tier REMIC, such information will be provided
in the manner described in Treasury Regulation Section 1.860E-2(a)(5), or any
successor regulation thereto.

                  (d) The Sponsor covenants and agrees that within ten Business
Days after receiving a written request from the Trustee it shall provide to the
Trustee any information necessary to enable the Trustee to meet its obligations
under subsections (b) and (c) above.

                  (e) The Trustee, the Sponsor and the Master Servicer each
covenants and agrees for the benefit of the Owners (i) to take no action which
would result in the termination of "REMIC" status for either the Upper-Tier
REMIC or the Lower-Tier REMIC, (ii) not to engage in any "prohibited
transaction", as such term is defined in Section 860F(a)(2) of the Code and
(iii) not to engage in any other action which may result in the imposition on
the Upper-Tier REMIC or the Lower-Tier REMIC of any other taxes under the Code.

                  (f) The Upper-Tier REMIC and the Lower-Tier REMIC shall, for
federal income tax purposes, maintain books on a calendar year basis and report
income on an accrual basis.

                  (g) Except as otherwise permitted by Section 7.06(b), no
Eligible Investment shall be sold prior to its stated maturity (unless sold
pursuant to a plan of liquidation in accordance with Article IX hereof).

                  (h) Neither the Sponsor nor the Trustee shall enter into any
arrangement by which the Trustee will receive a fee or other compensation for
services rendered pursuant to this Agreement, which fee or other compensation is
paid from the Trust Estate, other than as expressly contemplated by this
Agreement.

                  (i) Notwithstanding the foregoing clauses (g) and (h), the
Trustee or the Sponsor may engage in any of the transactions prohibited by such
clauses, provided that the Trustee shall have received the prior written consent
of the Certificate Insurer and an opinion of counsel experienced in federal
income tax matters to the effect that such transaction does not result in a tax
imposed on the Trustee or cause a termination of REMIC status for either the
Upper-Tier REMIC or the Lower-Tier REMIC; provided, however, that such
transaction is otherwise permitted under this Agreement.

                  (j) The Startup Day is hereby designated for the Upper-Tier
REMIC and the Lower-Tier REMIC as the "startup day" within the meaning of
Section 860G(a)(9) of the Code.

                  SECTION 11.16 Additional Limitation on Action and Imposition
of Tax. (a) Any provision of this Agreement to the contrary notwithstanding, the
Trustee shall not, without having obtained, and delivered to the Certificate
Insurer, an opinion of

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<PAGE>   130
counsel experienced in federal income tax matters (which opinion shall be at the
expense of the Sponsor) to the effect that such transaction does not result in a
tax imposed on the Trust or cause a termination of REMIC status for either the
Upper-Tier REMIC or the Lower-Tier REMIC, (i) sell any assets in the Trust
Estate, (ii) accept any contribution of assets after the Startup Day or (iii)
agree to any modification of this Agreement.

                  (b) In the event that any tax is imposed on "prohibited
transactions" of either the Upper-Tier REMIC or the Lower-Tier REMIC as defined
in Section 860F(a)(2) of the Code, on the "net income from foreclosure property"
as defined in Section 860G(c) of the Code, on any contribution to either the
Upper-Tier REMIC or the Lower-Tier REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax, including liability for
withholding tax, (other than any minimum tax imposed by Sections 23151(a) or
23153(a) of the California Revenue and Taxation Code) is imposed on the REMIC
Trust or the Non-REMIC Estate, such tax shall be paid by (i) the Trustee, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) the Master Servicer, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under this Agreement, or otherwise (iii) the Owners of the Class R-I and Class
R-II Certificates in proportion to their Percentage Interests. To the extent
such tax is chargeable against the Owners of the Class R-I and Class R-II
Certificates, notwithstanding anything to the contrary contained herein, the
Trustee is hereby authorized to retain from amounts otherwise distributable to
the Owners of the Class R-I and Class R-II Certificates on any Payment Date
sufficient funds to reimburse the Trustee for the payment of such tax (to the
extent that the Trustee has not been previously reimbursed or indemnified
therefor).

                  (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 Estate (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect thereto that involves the
Internal Revenue Service or state tax authorities); provided, however, that if
such audit resulted solely from the negligence of the Master Servicer or the
Sponsor, as the case may be, the Master Servicer or Sponsor shall pay such
expenses. The Trustee shall act on behalf of the Trust Estate in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto.

                  (d) On or before April 15 of each calendar year, commencing
April 15, 2001, the Trustee shall deliver to the Master Servicer a Certificate
from a Responsible Officer of the Trustee stating the Trustee's compliance with
its tax reporting duties set forth in this Agreement.

                  (e) The Trustee agrees to indemnify the Trust Estate, the
Master Servicer and the Sponsor for any taxes and costs, including, without
limitation, any penalties, interest, professional fees and attorneys' fees
imposed on or incurred by the Trust Estate, the Master Servicer or the Sponsor,
as a result of a breach of the Trustee's covenants set forth in this Agreement
or as a result of the Trustee's negligence, willful misconduct or bad faith.

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<PAGE>   131
                  SECTION 11.17 Appointment of Tax Matters Person. The Owner of
the Tax Matters Person Residual Interests in the Upper-Tier REMIC and the
Lower-Tier REMIC is hereby designated as "tax matters person" as defined in the
REMIC Provisions with respect to each such REMIC.

                  SECTION 11.18 The Certificate Insurer. The Certificate Insurer
is a third-party beneficiary of this Agreement. Any right conferred to the
Certificate Insurer shall be suspended during any period in which the
Certificate Insurer is in default in its payment obligations under the
Certificate Insurance Policy, except with respect to amendments to this
Agreement pursuant to Section 11.14. During the continuance of a Certificate
Insurer Default, the Certificate Insurer's rights hereunder shall vest in the
Trustee on behalf of the Owners of the Class A Certificates and shall be
exercisable by the Owners of at least a majority in Percentage Interest of the
Class A Certificates then Outstanding. At such time as the Class A Certificates
are no longer Outstanding hereunder and the Certificate Insurer has been
reimbursed for all Reimbursement Amounts to which it is entitled hereunder and
the Certificate Insurance Policy has expired, the Certificate Insurer's rights
hereunder shall terminate.

                  SECTION 11.19 Maintenance of Records. Each Originator and
Owner of a Class R Certificate shall each continuously keep an original executed
counterpart of this Agreement in its official records.

                  SECTION 11.20 Notices. All notices hereunder shall be given as
follows, until any superseding instructions are given to all other Persons
listed below:

                  The Trustee:                 Bankers Trust Company
                                                  of California, N.A.
                                               1761 East St. Andrew Place
                                               Santa Ana, California  92705
                                               Attention:  Trustee
                                                Administration/Advanta 2000-1
                                               Tel:  (714) 247-6000
                                               Fax:  (714) 247-6009

                  The Sponsor:                 Advanta Conduit Receivables, Inc.
                                               10790 Rancho Bernardo Road
                                               San Diego, California  92127
                                               Tel:  (858) 674-3317
                                               Attention:  Structured Finance

                  The Master Servicer:         Advanta Mortgage Corp. USA
                                               10790 Rancho Bernardo Road
                                               San Diego, California  92127
                                               Tel:  (858) 674-3317
                                               Fax:  (858) 674-3592

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<PAGE>   132
                  The Certificate Insurer:     Ambac Assurance Corporation
                                               One State Street Plaza
                                               New York, New York  10004
                                               Attention:  Advanta Mortgage Loan
                                                Trust 2000-1
                                               Structured Finance Department
                                               Fax:  (212) 363-1459

                  Moody's:                     Moody's Investors Service, Inc.
                                               99 Church Street
                                               New York, New York  10007
                                               Attention: The Mortgage
                                                Monitoring Department

                  Standard & Poor's:           Standard & Poor's Ratings
                                                Services
                                               55 Water Street
                                               New York, New York  10041
                                               Attention: Manager, Structured
                                                Finance Operations Group

                  Representative:              Morgan Stanley & Co. Incorporated
                                               1585 Broadway
                                               New York, New York 10036
                                               Attention:  General Counsel

                  [Remainder of Page Intentionally Left Blank]

                                      126
<PAGE>   133
                  IN WITNESS WHEREOF, the Sponsor, the Master Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers thereunto duly authorized, all as of the day and year first above
written.

                                         ADVANTA CONDUIT RECEIVABLES,
                                           INC., as Sponsor

                                         By: /s/ Michael Coco
                                            -----------------------------------
                                               Name: Michael Coco
                                               Title: Vice President

                                         ADVANTA MORTGAGE CORP. USA,
                                           as Master Servicer

                                         By: /s/ Michael Coco
                                            -----------------------------------
                                               Name: Michael Coco
                                               Title: Vice President

                                         BANKERS TRUST COMPANY OF CALIFORNIA,
                                           N.A., as Trustee

                                         By: /s/ Mark McNeill
                                            -----------------------------------
                                               Name:   Mark McNeill
                                               Title:  Assistant Secretary

                       [Pooling and Servicing Agreement]

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