Document:

AMENDED AND RESTATED
                        CREDIT AGREEMENT

                     Dated January 18, 2000

                              among

                          AMRESCO, INC.
                      and its Subsidiaries
                   as Borrowers on Schedule 1
                          as Borrowers

                      BANK OF AMERICA, N.A.
                     as Administrative Agent

                               and

            CERTAIN FINANCIAL INSTITUTIONS AND FUNDS
                           as Lenders

                         as arranged by

                 BANC OF AMERICA SECURITIES LLC
                        as Lead Arranger

                        TABLE OF CONTENTS

ARTICLE I                                                                   2
     DEFINITIONS                                                            2
     Section 1.1.   Definitions.                                            2
     Section 1.2.   Singular and Plural of Definitions                     27
     Section 1.3.   Substantive Definitions                                27
     Section 1.4.   Money                                                  27
     Section 1.5.   Captions; References                                   27
     Section 1.6.   Accounting Terms and Determinations                    27

ARTICLE II                                                                 27
     THE CREDIT FACILITIES                                                 27
     Section 2.1.   Commitments                                            27
     Section 2.2.   Required Payments; Termination                         31
     Section 2.3.   Ratable Loans.                                         34
     Section 2.4.   INTENTIONALLY OMITTED.                                 34
     Section 2.5.   Commitment Fee; Facility Letter of Credit
                     Fees; Facility FX Fees.                               34
     Section 2.6.   Minimum Amount of Each Advance.                        35
     Section 2.7.   Optional Principal Payments; Allocation of Payments.   35
     Section 2.8.   Method of Borrowing.                                   35
     Section 2.9.   INTENTIONALLY OMITTED.                                 36
     Section 2.10.  INTENTIONALLY OMITTED                                  36
     Section 2.11.  Interest Rate.                                         36
     Section 2.12.  Rates Applicable After Default.                        36
     Section 2.13.  Method of Payment.                                     36
     Section 2.14.  Continuation of Contract.                              36
     Section 2.15.  Evidence of Indebtedness.                              36
     Section 2.16.  Method of Issuing Facility Letters of Credit.          37
     Section 2.17.  Reductions to Revolving Commitment.                    38
     Section 2.18.  Telephonic Notices.                                    39
     Section 2.19.  Interest Payment Dates.                                39
     Section 2.20.  Calculation of Interest and Fees.                      39
     Section 2.21.  Notification of Advances, Interest Rates,
                     Prepayments and Commitment Reductions.                39
     Section 2.22.  Lending Installations.                                 39
     Section 2.23.  Non-Receipt of Funds by the Administrative Agent.      40
     Section 2.24.  INTENTIONALLY OMITTED.                                 40
     Section 2.25.  Judgment Currency.                                     40

ARTICLE III                                                                41
     YIELD PROTECTION; TAXES                                               41
     Section 3.1.   INTENTIONALLY OMITTED.                                 41
     Section 3.2.   Changes in Capital Adequacy Regulations.               41
     Section 3.3.   INTENTIONALLY OMITTED.                                 41
     Section 3.4.   INTENTIONALLY OMITTED.                                 41
     Section 3.5.   Taxes.                                                 41
     Section 3.6.   Lender Statements; Survival of Indemnity.              43
     Section 3.7.   INTENTIONALLY OMITTED.                                 43

ARTICLE IV                                                                 43
     CONDITIONS PRECEDENT                                                  43
     Section 4.1.   Closing.                                               43
     Section 4.2.   Conditions To All Advances.                            46
     Section 4.3.   Conditions to Letters of Credit                        46

ARTICLE V                                                                  47
     COLLATERAL                                                            47
     Section 5.1.   Security and Guaranties.                               47
     Section 5.2.   Requirements For Assigned Loans.                       49
     Section 5.3.   Requirements for Mortgaged Properties.                 49
     Section 5.4.   Recording.                                             50
     Section 5.5.   Administrative Agent's Discretion.                     50
     Section 5.6.   Lockbox; Lockbox Accounts; Other Accounts.             50
     Section 5.7.   Releases of Collateral.                                52
     Section 5.8.   Deposit of Cash Collateral for Facility
                     Letters of Credit.                                    53

ARTICLE VI                                                                 54
     REPRESENTATIONS AND WARRANTIES                                        54
     Section 6.1.   Existence and Standing.                                54
     Section 6.2.   Authorization and Validity.                            54
     Section 6.3.   No Conflict; Government Consent.                       54
     Section 6.4.   Financial Statements.                                  55
     Section 6.5.   Material Adverse Change.                               55
     Section 6.6.   Taxes.                                                 55
     Section 6.7.   Litigation and Contingent Obligations.                 55
     Section 6.8.   Subsidiaries.                                          55
     Section 6.9.   ERISA.                                                 56
     Section 6.10.  Accuracy of Information.                               56
     Section 6.11.  Purpose of Credit; Regulation U.                       56
     Section 6.12.  Material Agreements.                                   56
     Section 6.13.  Compliance With Laws.                                  56
     Section 6.14.  Ownership of Properties.                               56
     Section 6.15.  Plan Assets; Prohibited Transactions.                  57
     Section 6.16.  Environmental Matters.                                 57
     Section 6.17.  Investment Company; Investment Advisor.                57
     Section 6.18.  Public Utility Holding Company Act.                    57
     Section 6.19.  Year 2000.                                             57
     Section 6.20.  Subordinated Indebtedness; Other Indebtedness.         58
     Section 6.21.  Insurance.                                             58
     Section 6.22.  Solvency.                                              58
     Section 6.23.  Lend Lease Agreement.                                  58
     Section 6.24.  Licenses.                                              59
     Section 6.25.  Servicing Rights.                                      59

ARTICLE VII                                                                59
     COVENANTS                                                             59
     Section 7.1.   Financial Reporting.                                   59
     Section 7.2.   Use of Proceeds.                                       61
     Section 7.3.   Notice of Default and Material Matters.                61
     Section 7.4.   Conduct of Business.                                   62
     Section 7.5.   Taxes.                                                 62
     Section 7.6.   Insurance.                                             62
     Section 7.7.   Compliance with Laws.                                  62
     Section 7.8.   Maintenance of Properties.                             62
     Section 7.9.   Inspection.                                            62
     Section 7.10.  Dividends; Purchase of Stock.                          63
     Section 7.11.  Indebtedness.                                          63
     Section 7.12.  Mergers and Consolidations.                            63
     Section 7.13.  Sale of Assets.                                        64
     Section 7.14.  Investments and Acquisitions.                          64
     Section 7.15.  Liens.                                                 65
     Section 7.16.  Year 2000.                                             67
     Section 7.17.  Affiliates.                                            67
     Section 7.18.  Subordinated Indebtedness.                             67
     Section 7.19.  Lend Lease Agreement.                                  67
     Section 7.20.  Servicing Agreement.                                   67
     Section 7.21.  Contingent Obligations.                                68
     Section 7.22.  INTENTIONALLY OMITTED.                                 68
     Section 7.23.  Maintenance of Corporate Existence.                    68
     Section 7.24.  Financial Covenants.                                   68
     Section 7.25.  Investment Company.                                    69
     Section 7.26.  Exceptions to Covenants.                               69

ARTICLE VIII                                                               69
     DEFAULTS AND REMEDIES                                                 69
     Section 8.1.   Events of Default.                                     69
     Section 8.2.   Remedies                                               72
     Section 8.3.   Rights of Set-Off                                      73
     Section 8.4.   Remedies Cumulative, Concurrent and Non-Exclusive      74
     Section 8.5.   No Conditions Precedent to Exercise Remedies           74
     Section 8.6.   Release of and Resort to Collateral                    75
     Section 8.7.   Waivers                                                75
     Section 8.8.   Discontinuance of Proceedings                          75
     Section 8.9.   Power of Attorney                                      75
     Section 8.10.  Application of Proceeds                                76

ARTICLE IX                                                                 76
     THE ADMINISTRATIVE AGENT                                              76
     Section 9.1.   Appointment; Nature of Relationship.                   76
     Section 9.2.   Powers.                                                76
     Section 9.3.   General Immunity.                                      77
     Section 9.4.   No Responsibility for Loans, Recitals, etc.            77
     Section 9.5.   Action on Instructions of Lenders.                     77
     Section 9.6.   Employment of Agents and Counsel.                      77
     Section 9.7.   Reliance on Documents; Counsel.                        78
     Section 9.8.   Administrative Agent's Reimbursement and
                     Indemnification.                                      78
     Section 9.9.   Notice of Default.                                     78
     Section 9.10.  Rights as a Lender.                                    78
     Section 9.11.  Lender Credit Decision.                                79
     Section 9.12.  Successor Administrative Agent.                        79
     Section 9.13.  Administrative Agent's Fee.                            79
     Section 9.14.  Delegation to Affiliates.                              79
     Section 9.15.  Execution of Security Documents.                       80
     Section 9.16.  Collateral Releases; Lender Consents; Amendments, etc. 80
     Section 9.17.  Co-Agents and Arrangers.                               80
     Section 9.18.  Ratable Payments.                                      80
     Section 9.19.  Proceeds of Collateral.                                80
     Section 9.20.  Non-Advancing Lenders.                                 81

ARTICLE X                                                                  82
     BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS                     82
     Section 10.1.  Successors and Assigns.                                82
     Section 10.2.  Participations.                                        82
     Section 10.3.  Assignments.                                           83
     Section 10.4.  Dissemination of Information.                          84
     Section 10.5.  Tax Treatment.                                         84
     Section 10.6.  Federal Reserve Bank.                                  84

ARTICLE XI                                                                 84
     GENERAL PROVISIONS                                                    84
     Section 11.1.  Survival of Representations.                           84
     Section 11.2.  Notices.                                               84
     Section 11.3.  Amendments; Lender Votes and Consents.                 85
     Section 11.4.  Governmental Regulations.                              86
     Section 11.5.  Several Obligations; Benefits of this Agreement.       86
     Section 11.6.  Expenses; Indemnification.                             86
     Section 11.7.  Usury Savings Clause                                   87
     Section 11.8.  Accounting.                                            88
     Section 11.9.  Severability of Provisions.                            88
     Section 11.10. Nonliability of Lenders.                               88
     Section 11.11. Confidentiality; Non-Solicitation.                     89
     Section 11.12. Nonreliance.                                           89
     Section 11.13. Disclosure.                                            89
     Section 11.14. Compliance With Credit and Underwriting Policies.      90
     Section 11.15. Appraisals.                                            90
     Section 11.16. Senior Indebtedness; Borrowers Subordination.          90
     Section 11.17. Consolidated Group.                                    90
     Section 11.18. Amendment, Renewal and Extension.                      91
     Section 11.19. Prior Understandings; No Defenses; Entire
                     Agreement; No Oral Agreement                          91
     Section 11.20. Release of Claims.                                     91
     Section 11.21. Construction                                           91
     Section 11.22. Joint and Several Obligations                          91
     Section 11.23. Counterparts.                                          92

ARTICLE XII                                                                92
     CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL          92
     Section 12.1.  CHOICE OF LAW.                                         92
     Section 12.2.  CONSENT TO JURISDICTION.                               92
     Section 12.3.  WAIVER OF JURY TRIAL.                                  92

                     Schedules and Exhibits

     Schedule 1     -    Lenders, Borrowers and Guarantors
     Schedule 2     -    Commitment Schedule
     Schedule 3     -    Lending Installations
     Schedule 4     -    INTENTIONALLY OMITTED
     Schedule 5     -    Pricing Schedule
     Schedule 6     -    Excluded Subsidiaries
     Schedule 7     -    Subsidiaries - Continuing Operations/Discontinued
                          Operations
     Schedule 8     -    Existing Indebtedness and Liens
     Schedule 9-A   -    Existing Investments
     Schedule 9-B   -    Foreign Subsidiary and Other Inter-Company Notes
     Schedule 10    -    Pre-Transition Date Credit Facilities Borrowing Base
     Schedule 11    -    Post-Transition Date Revolving Credit
                          Facility Borrowing Base
     Schedule 12    -    Post-Transition Date Term Loan Facilities
                          Borrowing Base
     Schedule 13    -    Managed Asset Portfolios
     Schedule 14    -    Structured Real Estate Portfolio and
                          Unfunded Commitments
     Schedule 15    -    Custodial Agreements
     Schedule 16    -    Mortgaged Properties; Recordation

     Exhibit A      -    Form of Borrowing Notice
     Exhibit B      -    Form of Compliance Certificate
     Exhibit C      -    Form of Assignment and Acceptance Agreement
     Exhibit D-1    -    Form of Revolving Note
     Exhibit D-2    -    Form of Term Loan A Note
     Exhibit D-3    -    Form of Term Loan B Note
     Exhibit D-4    -    Form of Swingline Note

              AMENDED AND RESTATED CREDIT AGREEMENT

     This Amended and Restated Credit Agreement, dated as of the
18th day of January, 2000, is entered into by and among AMRESCO,
INC., a Delaware corporation (together with its successors,
"AMRESCO"), the other entities identified as Borrowers on
Schedule 1, as amended and supplemented from time to time
(together with AMRESCO, collectively referred to herein as the
"Borrowers", and each such entity referred to herein as a
"Borrower"), BANK OF AMERICA, N.A., formerly NationsBank, N.A.
(together with its successors or assigns, "Bank of America"), in
its capacity as administrative agent, and  the LENDERS (as herein
defined).

                        R E C I T A L S :

     I.   AMRESCO, Administrative Agent (as hereinafter defined)
and the Lenders have previously entered into that certain Credit
Agreement (as heretofore amended, modified, and supplemented, the
"Existing Credit Agreement") dated as of August 12, 1998,
pursuant to which the Lenders agreed to make available to AMRESCO
various loans and credit facilities upon the terms and conditions
therein contained (the "Existing Credit Facilities").  The
Existing Credit Agreement has been previously (a) modified and
amended pursuant to (i) First Modification of Credit Agreement
dated as of September 17, 1998, (ii) Second Modification of
Credit Agreement dated as of November 30, 1998, (iii) Third
Modification of Credit Agreement and Consent dated as of
February 28, 1999, (iv) Fourth Modification of Credit Agreement
and Consent dated as of August 12, 1999, (v) Fifth Modification
of Credit Agreement dated as of September 29, 1999, as modified
by Extension Agreement dated as of November 15, 1999, (vi) Sixth
Modification of Credit Agreement dated as of November 26, 1999,
and (vii) Seventh Modification of Credit Agreement dated as of
December 30, 1999, and (b) supplemented by (i) Supplement I to
Loan Documents dated as of February 28, 1999, (ii) Supplement II
to Loan Documents dated as of May 31, 1999, (iii) Supplement III
to Loan Documents dated as of November 15, 1999
("Supplement III"), and (iv) Supplement IV to Loan Documents
dated as of November 30, 1999 (individually a "Supplement" and
collectively, the "Supplements").

     II.  Payment and performance of the indebtedness and
obligations under the Existing Credit Agreement are guaranteed by
certain Subsidiaries of AMRESCO pursuant to that certain Guaranty
Agreement (the "Existing Guaranty") executed by such Subsidiaries
(each such Subsidiary party to the Existing Guaranty by execution
thereof or a Supplement thereto being referred to herein as an
"Existing Guarantor") in favor of Administrative Agent and the
Lenders.  The Existing Guaranty has been supplemented to add
additional Existing Guarantors thereunder, in accordance with the
terms of the Existing Credit Agreement and the Existing Guaranty,
pursuant to the four (4) Supplements described in preceding
Recital I.  Prior to execution of the Existing Guaranty, each
Existing Guarantor determined, and by its execution of this
Agreement each Existing Guarantor hereby represents to
Administrative Agent and the Lenders, that the execution of the
Existing Guaranty was reasonably expected to benefit, directly or
indirectly, such Existing Guarantor.

     III. Each Existing Guarantor (other than any Existing
Guarantor that is prohibited by law or agreement from becoming a
borrower hereunder or as otherwise provided herein) desires to
become a co-borrower with AMRESCO under the Existing Credit
Facilities.  Additionally, the Borrowers have requested certain
modifications and amendments to, and consents under, the Existing
Credit Agreement.  The Borrowers, Administrative Agent and the
Lenders desire to execute this Agreement to amend and restate the
Existing Credit Agreement to effect the change to co-borrower
status and certain other changes to the Existing Credit
Agreement.  Accordingly, in consideration of the mutual covenants
and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

                            ARTICLE I

     DEFINITIONS

     Section 1.1.   Definitions.   The following terms, as used
in this Agreement, have the respective following meanings:

     "Account Assignment" means an assignment and pledge of a
deposit account or other escrowed or pledged funds of AMRESCO or
any other Borrower or any Guarantor required or provided for
hereunder, including without limitation pursuant to
Sections 2.1(b), 2.2.1(b), 5.6 or 5.8, executed by AMRESCO and
any other applicable Borrower or any applicable Guarantor, in
favor of Administrative Agent, for the benefit of the Lenders, in
form and substance acceptable to Administrative Agent, as
amended, supplemented or restated from time to time.

     "Account Debtors" means, collectively, the "borrower" and
each other obligor, guarantor or other liable party under any of
the Assigned Loans.

     "Acquisition" means any transaction, or any series of
related transactions, consummated on or after the date of this
Agreement, by which AMRESCO or any Subsidiary (i) acquires any
going business or all or substantially all of the assets of any
firm, corporation, partnership or limited liability company, or
division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such
power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding
ownership  interests of a partnership or limited liability
company.

     "Administrative Agent" means Bank of America in its capacity
as contractual representative of the Lenders pursuant to
Article IX, and not in its individual capacity as a Lender, and
any successor Administrative Agent appointed pursuant to Article
IX.

     "Advance" means a borrowing under the Revolving Credit
Facility made by the Revolving Lenders on the same Borrowing
Date.

     "Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control
with such Person.  A Person shall be deemed to control another
Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.

     "Aggregate Commitment" means, on any date of determination,
the aggregate of (i) the Commitment Amounts of all of the
Revolving Lenders with respect to the Revolving Credit Facility,
as reduced from time to time pursuant to the terms hereof,
including without limitation Section 2.17, (ii) the outstanding
principal balance of Term Loan A, and (iii) the outstanding
principal balance of Term Loan B.

     "Aggregate Loan Percentage" means, with respect to each
Lender, the fraction, expressed as a percentage, obtained by
dividing (a) the sum of, without duplication, (i) the aggregate
principal amount outstanding on the date of determination under
the Term Loan A Note, the Term Loan B Note, the Revolving Note
and/or the Swingline Note payable to such Lender, plus (ii) such
Lender's portion of the Facility Letter of Credit Exposure, the
Facility FX Exposure and Swingline Advances, divided by (b) the
aggregate principal amount outstanding on the date of
determination under all of the Notes plus the Facility Letter of
Credit Exposure and the Facility FX Exposure.

     "Agreement" means this Amended and Restated Credit
Agreement, as it may be amended,  modified, supplemented or
restated and in effect from time to time.

     "Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in
a manner consistent with that used in preparing the financial
statements referred to in Section 6.4; provided, however, that
wherever in this Agreement principles of consolidation different
from those required by generally accepted accounting principles
are specified, the principles of consolidation specified in this
Agreement shall govern.

     "AMRESCO" is defined in the introductory paragraph of this
Agreement.

     "Applicable Base Rate Margin" means, with respect to all
Loans outstanding at any time, the percentage rate per annum
which is the applicable increase over the Corporate Base Rate at
such time as set forth in the Pricing Schedule.

     "Applicable Eurocurrency Rate Margin" means the percentage
rate per annum which is the applicable increase over the
Eurocurrency Reference Rate for purposes of calculating the
Eurocurrency Comparable Rate as set forth in the Pricing
Schedule.

     "Applicable Fee Rate" means, at any time, the applicable per
annum percentage rate at which the Commitment Fee is accruing on
the unused portion of the Revolving Commitment (without any
reduction for Swingline Advances), and at which the Facility
Letter of Credit Fee and the Facility FX Fee are each calculated
at such time, as set forth respectively in the Pricing Schedule.

     "Applicable Rate" means, for any day, with respect to the
principal balance of all Loans, a rate per annum equal to the
Floating Rate.

     "Assigned Loans" means all loans or other evidence of
indebtedness owned or hereafter originated or acquired by any
Borrower or any Guarantor (except Foreign Subsidiary Guarantors,
other than AMRESCO Funding Canada Inc., and, subject to Section
5.1.4, SBA Guaranteed Loans of AMRESCO Independence Funding,
Inc.), which are not subject to Liens (permitted by Section 7.15)
securing Indebtedness other than the Loans.

     "Article" means an article of this Agreement unless another
document is specifically referenced.

     "Authorized Accounting Officer" means any of the Chief
Financial Officer, Chief Accounting Officer, Treasurer,
Controller or any Assistant Treasurer of AMRESCO.

     "Authorized Officer" means as to any Borrower or any other
Person, any of its Chairman, Vice-Chairman, President, Executive
Vice President(s), Senior Vice President(s), Vice President(s),
Chief Financial Officer, Chief Accounting Officer, Treasurer or
Assistant Treasurer, who is duly authorized by the Board of
Directors of such Person to execute the Loan Documents or any
other documents or certificates to be executed by such Person
hereunder or in connection with any Advance or Facility Letter of
Credit.

     "Balancing Payment" is defined in Section 2.7(b).

     "Balancing Ratio" means, as of any time of determination,
the ratio of (a) the outstanding balance of Term Loan A as of
such time to (b) the sum of the Revolving Commitment, the
outstanding balance of Term Loan A, and the outstanding balance
of Term Loan B, each as of such time.

     "Bank of America" is defined in the introductory paragraph
of this Agreement.

     "Borrower" and "Borrowers" is defined in the introductory
paragraph of this Agreement.  Use of the term "Borrower" or
"Borrowers" in this Agreement and all of the other Loan
Documents, unless the context requires otherwise, shall be deemed
to be a reference to each Borrower, and to all of them
collectively.

     "Borrowing Base" means (a) prior to and on the Transition
Date, an amount calculated as provided in Schedule 10 with
respect to all the Credit Facilities, and (b) after the
Transition Date (i) an amount calculated as provided in
Schedule 11 with respect to the Revolving Credit Facility, and
(ii) an amount calculated as provided in Schedule 12 with respect
to the Term Loan Facilities.  Any references to the Borrowing
Base as a limitation on or restriction or requirement with
respect to Advances, Swingline Advances, Facility Letters of
Credit, Facility Foreign Currency Exchange Agreements, or other
components of the Revolving Commitment or Revolving Credit
Facility shall, after the Transition Date, mean the amount
calculated pursuant to clause (b)(i) as the Borrowing Base with
respect to the Revolving Credit Facility.

     "Borrowing Base Certificate" is defined in Section 7.1(ix).

     "Borrowing Base Coverage Ratio" means the ratio of the
aggregate "Net Asset Values" of the eligible assets comprising
the respective "Borrowing Base" as shown in Schedule 10, 11 or
12, as applicable, to the amount shown as "Total Net
Outstandings" on the respective Schedule 10, 11 or 12.

     "Borrowing Date" means a date on which an Advance is made
hereunder.

     "Borrowing Notice" is defined in Section 2.8.

     "Business Day" means (a) with respect to any obligations
arising under or payments required in connection with a Facility
Foreign Currency Exchange Agreement, a day (other than a Saturday
or Sunday) on which banks generally are open in Dallas, Texas and
New York, New York for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be
made on the Fedwire system and on which dealings in Dollars and
the other Eligible Currencies are carried on in the London
interbank market, and (b) for all other purposes, a day (other
than a Saturday or Sunday) on which Administrative Agent and
national banks generally are open in Dallas, Texas for the
conduct of substantially all of their commercial lending
activities.

     "Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement
Accounting Principles.

     "Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

     "Capture Account" is defined in Section 5.6(b) by reference
to the Lockbox Agreement.

     "Cash Equivalent Investments" means (a) short-term
obligations of, or fully guaranteed by, the United States of
America, (b) commercial paper rated A-1 or better by S&P or P-1
or better by Moody's, (c) demand deposit accounts maintained in
the ordinary course of business, (d) certificates of deposit
issued by and time deposits with commercial banks (whether
domestic or foreign) having capital and surplus in excess of
$100,000,000, and (e) overnight Eurodollar investments of funds
in accounts maintained with Administrative Agent; provided that,
in each case, unless the obligation can be settled daily at par
or the maturity is prior to the Revolving Credit Termination
Date, the same provides for payment of both principal and
interest (and not principal alone or interest alone) and is not
subject to any contingency regarding the payment of principal or
interest.

     "Change Date" is defined in Section 7.24.1.

     "Change in Control" means (a) the acquisition, in one or a
series of transactions, by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 25% or more of the
outstanding shares of voting stock of AMRESCO, provided that the
booking of the issuance of stock to former shareholders of MIC or
the CLC Earnout Recipients in connection with the MIC Transaction
or the CLC Transaction, respectively, shall not constitute a
Change in Control hereunder so long as such stock is not issued
and the recipients thereof do not, as a result of such booking,
obtain any voting or other control rights with respect to such
stock; or (b) individuals who are directors of AMRESCO on the
date hereof shall cease to constitute 80% in number of the Board
of Directors of AMRESCO; or (c) at any time (i) prior to the Lend
Lease Closing Date (whether or not the Lend Lease Agreement is
terminated or such date does not occur) any one of the positions
of Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer of AMRESCO is not filled by the person serving
in each such capacity on the date hereof, and (ii) after the Lend
Lease Closing Date, all three of such positions are not filled by
the persons serving in those capacities on the date hereof,
provided that if either such occurrence is due to the death or
disability of a person serving in any such capacity on the date
hereof, then such occurrence shall not be deemed a Change in
Control until the expiration of 30 days after the date of such
death or disability without the position left unoccupied by such
death or disability being filled by a person acceptable to
Administrative Agent.

     "CLC Earnout Recipients" means, collectively, Lowell
Fulkerson, Todd Lindsey, Matthew Moore, John Prenn and Peter
Wachtell.

     "CLC Transaction" means the transaction providing for
"Earnout Payments" to the CLC Earnout Recipients described in
that certain Stock and Asset Purchase Agreement dated March 21,
1997, between (among others) AMRESCO and the CLC Earnout
Recipients, as amended prior to the date hereof.

     "Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.

     "Collateral" means all collateral or security for the
Obligations subject to or governed by any of the Security
Documents or any other Loan Documents, as described generally in
Article V.

     "Collateral Assignment" means, collectively, the Collateral
Assignment of Promissory Notes and Liens dated August 12, 1998,
executed by AMRESCO and the Existing Guarantors (except for the
Foreign Subsidiaries other than AMRESCO Funding Canada Inc.) in
connection with the Existing Credit Agreement, as amended by the
Supplements and further amended on the date hereof, and all other
collateral assignments, debentures, charges, and any other
documents or assignments of any kind assigning or creating Liens
on promissory notes or other evidences of indebtedness and
related Liens, executed by any one or more of the Borrowers
and/or the Guarantors in favor of Administrative Agent, on behalf
and for the benefit of the Lenders, as security for the
Obligations, which collateral assignments, debentures, charges or
other documents or assignments are intended to cover all of the
Assigned Loans, and all renewals, modifications, amendments,
supplements and restatements thereof.

     "Commitment Amount" means, with respect to each Revolving
Lender, the amount indicated as such Revolving Lender's Revolving
Credit Facility Commitment Amount opposite its name on the
Commitment Schedule (Schedule 2), as such amount may from time to
time be (a) reduced as a result of a reduction in the Revolving
Commitment as provided herein, or (b) adjusted to account for any
assignment of a Revolving Lender's interest as provided in
Section 10.3.

     "Commitment Fee" is defined in Section 2.5.1.

     "Commitment Percentage" means, for each Revolving Lender,
the percentage of the Revolving Credit Facility such Revolving
Lender has committed to make available to the Borrowers as set
forth in the Commitment Schedule (Schedule 2) as such percentage
may be adjusted from time to time to account for any assignment
of a Revolving Lender's interest pursuant to Section 10.3.

     "Commitment Schedule" means the Schedule attached hereto as
Schedule 2 and identified as such, as modified, supplemented,
restated or replaced from time to time, any such modifications,
supplements, restatements or replacements to reflect changes in
the Revolving Commitment or the Lenders' respective percentages
in the Credit Facilities to be effective when made by
Administrative Agent in its records, regardless of whether
Schedule 2 to this Agreement has been formally modified,
supplemented, restated and/or replaced.

     "Consolidated EBITDA" means, for any period, determined in
accordance with Agreement Accounting Principles on a consolidated
basis for AMRESCO and its Subsidiaries, an amount equal to
(a) the sum of consolidated net income before taxes and
extraordinary gains or losses (as determined in accordance with
Agreement Accounting Principles), plus depreciation, plus
amortization, plus interest expense, each as deducted in
determining such consolidated net income before taxes, less
(b) write downs of retained interests in securitizations (which
includes, without limitation, interest only strips, servicing
rights and other similar assets) for prior years to the extent
prior year financial statements are restated in the period of
determination to reflect such write downs and such write downs
are not included in calculating net income for the period of
determination, and less (c) non-cash income (created by gain on
sale accounting) included in consolidated net income before taxes
and extraordinary gains or losses as used in clause (a) of this
calculation of Consolidated EBITDA; provided, however, that for
all purposes hereunder, (i) the losses related to the commercial
mortgage banking and home equity lending activities of AMRESCO
and its Subsidiaries (in an aggregate amount not to exceed
$220,500,000) that were reported in year-end 1998 financial
statements of AMRESCO shall not be included in calculating
Consolidated EBITDA, and (ii) the following amounts shall be
adjusted or added back in the calculation of Consolidated EBITDA
(but without duplication), provided that no matter how such
adjustments are made they shall be subject to the following
stated limitations:  (A) write-downs of retained interests in
home equity securitizations up to a maximum amount of
$120,000,000; (B) the write-down of goodwill associated with the
acquisitions of the businesses that now consist of AMRESCO'S
Subsidiary Holliday Fenoglio Fowler, L.P. up to a maximum amount
of $20,000,000; (C) the write-down of goodwill associated with
MIC up to a maximum amount of $60,000,000; (D) the write-down of
goodwill associated with AMRESCO's home equity lending division
up to a maximum amount of $10,000,000; and (E) severance and one-
time restructuring charges taken by AMRESCO and its Subsidiaries
in an aggregate amount not to exceed $35,000,000; provided,
further, that the aggregate amount added back in the calculation
of Consolidated EBITDA under clauses (A) through (D) shall not
exceed $197,500,000.

     "Consolidated Indebtedness" means at any time the
Indebtedness of AMRESCO and its Subsidiaries and any other Person
which would be reflected on the consolidated balance sheet of
AMRESCO and its Subsidiaries prepared in accordance with
Agreement Accounting Principles as of such time.

     "Consolidated Interest Expense" means, with reference to any
period, the interest expense of AMRESCO and its Subsidiaries
calculated on a consolidated basis for such period as shown on
the consolidated financial statements of AMRESCO and its
Subsidiaries prepared in accordance with Agreement Accounting
Principles.

     "Consolidated Net Income" means, with reference to any
period, the net income (or loss) of AMRESCO and its Subsidiaries
calculated on a consolidated basis for such period.

     "Consolidated Net Worth" means, as of any date, the total
shareholders' equity (including capital stock, additional paid-in
capital and retained earnings after deducting treasury stock)
which would appear on a consolidated balance sheet of AMRESCO and
its Subsidiaries prepared as of such date in accordance with
Agreement Accounting Principles.

     "Consolidated Tangible Net Worth" means, as of any date,
(a) Consolidated Net Worth, plus (b) the amount of any Permitted
Preferred Stock that is not added in as shareholders' equity in
the calculation of Consolidated Net Worth, less (c) the aggregate
book value of Intangible Assets of AMRESCO and its Subsidiaries
on a consolidated basis as of such date in accordance with
Agreement Accounting Principles, less (d) the aggregate
outstanding principal balances of the MIC Notes.

     "Contingent Obligation" of a Person means any obligation,
contingent or otherwise, of such Person (a) directly or
indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation
(whether arising by virtue of partnership arrangements, by
agreements to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions, by "comfort letter" or other similar undertaking of
support or otherwise), or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or
(b) assuring any creditor or purchaser from such Person against
loss, including without limitation, any recourse obligation with
respect to loans or other receivables sold with recourse to such
Person,  provided that the term Contingent Obligation shall not
include loan commitments or loan take-out agreements which are
typically issued by providers of long-term debt, or endorsements
for collection or deposit in the ordinary course of business.

     "Continuing Operations" means the operations of the
Subsidiaries identified as "Continuing Operations Subsidiaries"
on Schedule 7.

     "Contribution Agreement" means the Contribution and
Indemnity Agreement dated as of the date hereof executed by and
among AMRESCO and each Guarantor, and any other separate
Contribution and Indemnity Agreement that may be executed on or
after the date hereof among Guarantors, as amended, modified,
supplemented or restated.

     "Controlled Group" means all members of a controlled group
of corporations or other business entities and all trades or
businesses (whether or not incorporated) under common control
which, together with AMRESCO or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.

     "Corporate Base Rate" means, on any date of determination,
the greater of (a) the rate of interest per annum most recently
announced by Administrative Agent as its prime rate in effect at
its principal office automatically fluctuating upward and
downward until and at the time specified in each such
announcement without special notice to AMRESCO, any other
Borrower or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to
a customer, it being understood and agreed that such rate is set
by Administrative Agent as a general reference rate of interest,
taking into account such factors as Administrative Agent may deem
appropriate, that it may not correspond with future increases or
decreases in interest rates charged by other lenders or market
rates in general, and that Administrative Agent may make various
business or other loans at rates of interest having no
relationship to such rate, and (b) the sum of the Federal Funds
Effective Rate plus 200 basis points.

     "Credit Facilities" means the Revolving Credit Facility and
the Term Loan Facilities.

     "Custodial Agreement" means each written agreement in form
and content acceptable to Administrative Agent, entered into
among the applicable Custodian, AMRESCO and all applicable
Borrowers and/or Guarantors, and Administrative Agent, pursuant
to which such Custodian agrees to act as custodian and bailee for
the documents evidencing certain of the Assigned Loans, as any
such Custodial Agreement may be amended, modified or supplemented
from time to time, together with any restatements,  replacements
or substitutions thereof.  Schedule 15 lists all Custodial
Agreements in effect on the date hereof, which Custodial
Agreements cover and relate to (without limitation) all Assigned
Loans comprising any part of the Borrowing Base.

     "Custodian" means a financial institution or other Person
approved by the Administrative Agent to act as a custodian under
a Custodial Agreement.

     "Default" means any condition, circumstance or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.

     "Default Rate" means the fluctuating per annum rate of
interest equal to the lesser of (i) four percent (4.0%) plus the
Corporate Base Rate, or (ii) the Maximum Lawful Rate.

     "Discontinued Operations" means the operations of the
Subsidiaries which are identified as "Discontinued Operations
Subsidiaries" on Schedule 7.

     "Dollar Amount" of any currency at any date means (i) the
amount of such currency if such currency is Dollars or (ii) the
equivalent in Dollars of such currency if such currency is any
currency other than Dollars, calculated on the basis of the
arithmetical mean of the buy and sell spot rates of exchange of
the Administrative Agent for such currency on the London market
at 11:00 a.m., London time.

     "Dollars" and "$" mean the lawful currency of the United
States of America.

     "Eligible Currency" means any currency other than Dollars
(i) that is readily available, (ii) that is freely traded,
(iii) in which deposits are customarily offered to banks in the
London interbank market, (iv) which is convertible into Dollars
in the international interbank market and (v) as to which a
Dollar Amount may be readily calculated.

     "Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or
releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other
remediation thereof.

     "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation
issued thereunder.

     "Euro" and/or "EUR" means the euro referred to in Council
Regulation (EC) No. 1103/97 dated June 17, 1997, passed by the
Council of the European Union, or, if different, the then lawful
currency of the member states of the European Union that
participate in the third stage of Economic and Monetary Union.

     "Eurocurrency" means any Eligible Currency.

     "Eurocurrency Comparable Rate" means, with respect to each
calendar month period, the sum of (a) the quotient of (i) the
Eurocurrency Reference Rate for such calendar month period as
determined on the last Business Day of the preceding month,
divided by (ii) one minus the Reserve Requirement (expressed as a
decimal) applicable on such date of determination, plus (b) the
Applicable Eurocurrency Rate Margin.  The Eurocurrency Comparable
Rate shall be rounded to the next higher multiple of 1/16 of 1%
if the rate is not such a multiple.  The Eurocurrency Comparable
Rate shall adjust automatically as of the first day of each
calendar month based on the Eurocurrency Reference Rate
determined by Administrative Agent for such month.

     "Eurocurrency Reference Rate" means a rate determined by
Administrative Agent on the last Business Day of each calendar
month (to be applicable for the next succeeding calendar month)
at which deposits in Dollars for a one (1) month period beginning
on such date are offered based on information presented on the
Telerate Screen as of 11:00 A.M. (London time) on such Business
Day; provided, that if two or more such offered rates appear on
the Telerate Screen in respect of such one-month interest period,
the arithmetic mean of all such rates (as determined by
Administrative Agent) will be the rate used; provided, further,
that if the Telerate System ceases to provide such interest rate
quotations, such rate shall be the average rate of interest
determined by Administrative Agent (rounded upward to the nearest
 .01%) at which deposits in Dollars are offered for the relevant
one-month period by Administrative Agent to banks with combined
capital and surplus in excess of $500,000,000 in the London
interbank market as of 11:00 A.M. (London time) on the last
Business Day of the applicable calendar month.

     "Event of Default" means an event described in Article VIII.

     "Excluded Foreign Subsidiaries" means the Foreign
Subsidiaries of AMRESCO organized under the laws of Japan,
Thailand, Korea and Mexico, and any Subsidiaries of such Foreign
Subsidiaries, and AMRESCO Japan Portfolio Investments, Inc., a
Delaware corporation that is a direct Wholly-Owned Subsidiary of
AMRESCO whose sole business and only assets are directly related
to the operations of AMRESCO Japan Holdings Y.K.

     "Excluded Subsidiaries" means, collectively, (a) all
Investment Advisor Subsidiaries, Partially-Owned Subsidiaries,
and AMRESCO Securities, Inc., while acting as a broker-dealer,
(b) all Subsidiaries established as bankruptcy remote special
purpose entities in connection with any asset securitization of
any kind and no matter how such securitization is treated under
Agreement Accounting Principles, and (c) the Excluded Foreign
Subsidiaries, a list of all Excluded Subsidiaries on the date
hereof being attached hereto as Schedule 6, which Schedule 6
shall be amended and supplemented from time to time as provided
in Section 7.1(vii).

     "Excluded Taxes" means, in the case of each Lender or
applicable Lending Installation and the Administrative Agent,
taxes imposed on its overall net income, and franchise taxes
imposed on it by (a) the jurisdiction under the laws of which
such Lender or the Administrative Agent is incorporated or
organized or (b) the jurisdiction in which the Administrative
Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.

     "Exhibit" refers to an exhibit to this Agreement, unless
another document is specifically referenced.

     "Existing Credit Agreement" is defined in Recital I of this
Agreement.

     "Existing Credit Facilities" is defined in Recital I of this
Agreement.

     "Existing Guaranty" and "Existing Guarantor" are defined in
Recital II of this Agreement.

     "Facility Foreign Currency Exchange Agreement" means a Rate
Hedging Agreement entered into between a Revolving Lender (or an
Affiliate of a Revolving Lender) and AMRESCO, together with any
other applicable Borrower or Guarantor, for the purpose of
settling obligations related to fluctuations in foreign currency
liabilities of or owing by AMRESCO or any of its Subsidiaries, in
accordance with the terms of Section 2.1.5.

     "Facility FX Exposure" means, on any date, the aggregate
amount of the fair market value of the cost to settle all
outstanding Facility Foreign Currency Exchange Agreements then in
effect (assuming all Facility Foreign Currency Exchange
Agreements were to be terminated as of that date), which amount
shall not be greater than $10,000,000 in the aggregate at any one
time for all Facility Foreign Currency Exchange Agreements then
in effect.

     "Facility FX Fee" is defined in Section 2.5.3.

     "Facility Letter of Credit" means a letter of credit issued
by the Issuing Lender for the account of a Borrower or a
Guarantor pursuant to this Agreement.

     "Facility Letter of Credit Exposure" means the aggregate
amount of the unfunded portion of each Facility Letter of Credit
outstanding at any time.

     "Facility Letter of Credit Fee" is defined in Section 2.5.2.

     "Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upwards if necessary, to the nearest 1/100th
of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if such day is
not a Business Day, the Federal Funds Effective Rate for such day
shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Effective Rate for such day shall
be the average rate quoted to Administrative Agent on such day on
such transactions from three Federal funds brokers of recognized
standing.

     "Federal Lending Programs" is defined in Section 6.24.

     "FEOMA" is defined in Section 2.1.5.

     "Floating Rate" means, for any day, a rate per annum equal
to (a) the Corporate Base Rate in effect on such day, plus
(b) the Applicable Base Rate Margin, in each case changing when
and as the Corporate Base Rate and/or the Applicable Base Rate
Margin each change.

     "Foreign Subsidiary" means a Subsidiary of AMRESCO
incorporated or organized in a jurisdiction other than one of the
fifty states of the United States or the District of Columbia.

     "Foreign Subsidiary Inter-Company Note" means a promissory
note in form and substance approved by Administrative Agent
representing the amount of any loans, advances or extensions of
credit of any kind of any Borrower or any Guarantor to any
Foreign Subsidiary, together with any and all revolving loan
agreements or other ancillary loan, credit or security agreements
executed in connection with or relating to any such loans,
advances or extensions of credit.

     "FX Lender" means a Revolving Lender or an Affiliate of a
Revolving Lender that at the time in question is a counterparty
to a Facility Foreign Currency Exchange Agreement.

     "Governmental Authority" means any government, any state or
other political subdivision thereof, or any Person exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

     "Guarantor" means each Subsidiary of AMRESCO that is not a
Borrower or an Excluded Subsidiary or an indirect Foreign
Subsidiary of AMRESCO (other than AMRESCO Funding Canada Inc.),
such Subsidiaries as of the date hereof being listed as
Guarantors on Schedule 1, which Schedule 1 may be amended,
supplemented and/or replaced from time to time to add any
additional Guarantors after the date hereof.

     "Guaranty" means that certain Guaranty Agreement dated as of
the date hereof executed by each  Guarantor in favor of the
Administrative Agent and the Lenders (which Guaranty is an
amendment and restatement of the Existing Guaranty), and any
other separate Guaranty Agreement that may be executed on or
after the date hereof by any Subsidiary of AMRESCO or any other
Person, in each case as amended, modified, supplemented or
restated and in effect from time to time.

     "Indebtedness" of a Person means, at any date, without
duplication, (a) all indebtedness, obligations and liabilities of
such Person which, in accordance with Agreement Accounting
Principles and practices thereof, would be included in
determining liabilities as shown in the liability section of the
balance sheet of such Person, including, without limitation, all
indebtedness, obligations and liabilities of such Person for
borrowed money, obligations evidenced by bonds, debentures, notes
or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, trade payables, and structured
financing transactions of any type, (b) all other indebtedness
(including Capitalized Lease Obligations) of such Person on which
interest charges are customarily paid or accrued, (c) all
obligations for indebtedness in respect of Contingent Obligations
of such Person and the Net Mark-to-Market Exposure of Rate
Hedging Agreements, (d) the unfunded portion of, and unreimbursed
portion of drawings under, all Letters of Credit issued for the
account or upon the application of such Person, and (e) all
personal liability of such Person as a general partner or joint
venturer of a partnership or joint venture for obligations of
such partnership or joint venture of the nature described in
(a) through (d) preceding.

     "Intangible Assets" of any Person means those assets of such
Person which are (a) deferred assets, other than prepaid
insurance and prepaid taxes, (b) patents, copyrights, trademarks,
tradenames, franchises, goodwill, experimental expenses and other
similar assets which would be classified as intangible assets on
a balance sheet of such Person, prepared in accordance with
Agreement Accounting Principles, and (c) unamortized debt
discount and expenses.

     "Inter-Company Note" means a promissory note in form and
substance approved by Administrative Agent representing the
amount of any loans, advances or extensions of credit of any kind
of any Borrower or any Guarantor to any Subsidiary of such
Borrower or Guarantor other than a Foreign Subsidiary, together
with any and all revolving loan agreements or other ancillary
loan, credit or security agreements executed in connection with
or relating to any such loans, advances or extensions of credit.

     "Interest Deficiency Payment" is defined in Section 2.19(b).

     "Interest/Dividend Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the
immediately preceding twelve month period to (b) the sum of
(i) Consolidated Interest Expense, plus (ii) the amount of any
dividends or distributions paid on any preferred stock of AMRESCO
or any of its Subsidiaries to Persons who are not Affiliates of
AMRESCO and its Subsidiaries, other than in kind dividends on
Permitted Preferred Stock, less (iii) the amount of prior fees
paid related to financings and capital events of AMRESCO and its
Subsidiaries that are expensed in such period, all for the same
immediately preceding twelve calendar month period.

     "Interest Rate Exposure Report" means a report showing the
aggregate amount of each Borrower's and each Guarantor's Rate
Hedging Obligations (including without limitation under all
Facility Foreign Currency Exchange Agreements) and how such
obligations were calculated, together with evidence satisfactory
to Administrative Agent that the amount of such Rate Hedging
Obligations have been confirmed by the counterparty to the
related Rate Hedging Agreements.

     "Investments" of a Person means any loans, advances (other
than customary commission, travel and similar advances to
officers and employees made in the ordinary course of business),
extensions of credit (other than accounts receivable arising in
the ordinary course of business on terms customary in the trade)
or contributions of capital by such Person; stocks, bonds, mutual
funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and
certificates of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar
instruments or contracts owned by  such Person.

     "Investment Advisor Subsidiary" means AMRESCO Advisors, Inc.
and any other existing or future Subsidiary of a Borrower which
is subject to the Investment Advisors Act of 1940, as amended, or
the Investment Company Act of 1940, as amended.

     "Issuing Lender" means Bank of America in its capacity as
issuer of the Facility Letters of Credit.

     "Lead Arranger" means Banc of America Securities LLC, and
its successors.

     "Legal Requirements" means (a) any and all present and
future judicial decisions, statutes, laws, rulings, rules,
orders, regulations, permits, licenses, certificates, or
ordinances of any Governmental Authority in any way applicable to
any Borrower, any Guarantor or any Subsidiary, (b) the presently
or subsequently effective bylaws and articles of incorporation,
partnership agreement, operating agreement, and any other form of
business association agreement of any Borrower, any Guarantor, or
any Subsidiary, (c) any and all covenants, conditions or
restrictions applicable to the Collateral or the ownership, use
or occupancy thereof, and (d) any and all leases or contracts
(written or oral) of any nature that relate in any way to any
Collateral, or any portion thereof, or to which any Borrower, any
Guarantor or any Subsidiary may be bound, and in each case which,
if violated, would materially and adversely affect (i) the
present or potential ownership, use, sale, occupancy or
possession of the Collateral, or any part thereof, by any
Borrower, any Guarantor or any Subsidiary, (ii) Lenders' Liens or
(iii) the financial condition of any Borrower, any Guarantor or
any Subsidiary.

     "Lend Lease" means Lend Lease (US) Services, Inc., a
Delaware corporation.

     "Lend Lease Agreement" means the Asset Purchase Agreement
dated December 8, 1999, executed by and among AMRESCO, AMRESCO
Management, Inc., AMRESCO Services, L.P., AMRESCO Capital, L.P.,
Holliday Fenoglio Fowler, L.P., and such other Subsidiaries of
AMRESCO as are named therein, as sellers, and Lend Lease, as
purchaser.

     "Lend Lease Closing Date" means the date of the closing of
the transactions contemplated by the Lend Lease Agreement.

     "Lend Lease Deferral" means the aggregate sum of (a) the
difference between  95% and 85% of the Lend Lease Net Proceeds if
the Lend Lease Required Payment is calculated pursuant to clause
(b) of the definition thereof, plus (b)  the difference between
95% and 85% of any funds from the Lend Lease Post-Closing
Adjustment Account to be paid to Administrative Agent pursuant to
Section 2.2.1(b), plus (c) the difference between 95% and 85% of
the amount of any payment made on the Lend Lease Holdback Note,
each in the case that the Lend Lease Closing Date occurs prior to
the occurrence of the SREP Sale Date or Structured Real Estate
Asset Sales for all or substantially all of the SREP Assets.

     "Lend Lease Holdback Note" means the promissory note in the
principal face amount of $25,000,000 executed by Lend Lease and
payable to AMRESCO, delivered to AMRESCO on the Lend Lease
Closing Date pursuant to Section 3.1 of the Lend Lease Agreement.

     "Lend Lease Net Proceeds" means the gross cash sales
proceeds received by the sellers under the Lend Lease Agreement,
less (a) reasonable and customary closing costs and expenses paid
by the sellers under the Lend Lease Agreement, including without
limitation investment banking fees and reasonable attorneys'
fees, (b) the portion of the purchase price, not to exceed
$8,800,000 in the aggregate, paid to cover the earnout payable to
the former shareholders of Fowler, Goedecke, Ellis & O'Connor and
PNS Realty Partners, L.P. and certain of its affiliated entities,
which amount shall be paid to the Persons entitled to same on the
Lend Lease Closing Date, and (c) an amount not to exceed
$10,500,000 in the aggregate to be paid on or before the Lend
Lease Closing Date to certain existing employees of AMRESCO and
the Discontinued Subsidiaries for retention bonuses and
incentives for continuing in such employment after the Lend Lease
Closing Date.

     "Lend Lease Post-Closing Adjustment Account" means a deposit
account established and held at Bank of America into which a
portion of the Lend Lease Net Proceeds, not to exceed $6,000,000,
shall be deposited on the Lend Lease Closing Date to be held as
Collateral for the Obligations, subject to an Account Assignment,
for the sole purpose of use by AMRESCO to pay any net amounts
owing by the sellers to the purchasers under the Lend Lease
Agreement pursuant to the calculations to be made after the Lend
Lease Closing Date as post-closing adjustments pursuant to
Section 3.3 of the Lend Lease Agreement.

     "Lend Lease Required Payment" means a payment in the amount
of the greater of (a) $180,000,000 or (b) either (i) if the SREP
Sale Date or Structured Real Estate Asset Sales for all or
substantially all of the SREP Assets has occurred prior to the
Lend Lease Closing Date, 95% of the Lend Lease Net Proceeds, or
(ii) if the Lend Lease Closing Date is prior to the occurrence of
the SREP Sale Date or Structured Real Estate Asset Sales for all
or substantially all of the SREP Assets, 85% of the Lend Lease
Net Proceeds (with the difference between the amount calculated
under b(i) and b(ii) above being included in the Lend Lease
Deferral); provided that in the case of either (a) or (b) above,
the amount, if any, deposited in the Lend Lease Post-Closing
Adjustment Account on the Lend Lease Closing Date in accordance
with the terms of this Agreement shall be deducted from the
amount of the Lend Lease Net Proceeds for purposes of determining
the Lend Lease Required Payment.  As used in clauses (b)(i) and
(b)(ii), "substantially all" shall be determined in the manner
described in Section 2.2.1(b).

     "Lenders" means each of the lending institutions or funds
listed as a "Lender" on Schedule 1, as Schedule 1 may be
modified, amended, supplemented or replaced from time to time,
which term shall include both the Revolving Lenders and the Term
Lenders.

     "Lending Installation" means, with respect to a Lender or
the Administrative Agent, the office, branch, subsidiary or
affiliate of such Lender or the Administrative Agent listed on
the signature pages hereof or as otherwise selected by such
Lender or the Administrative Agent pursuant to Section 2.22.
Schedule 3 shows the current Lending Installations of the Lenders
and the Administrative Agent.

     "Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which
such Person is in any way liable, including, without limitation,
all Facility Letters of Credit.

     "Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other
title retention agreement).

     "Loan" means, with respect to a Lender or the Swingline
Lender, such Lender's loan made pursuant to Article II, under any
and all of the Credit Facilities, and "Loans" means all of such
loans made and outstanding at any time (whether as an Advance or
the outstanding principal balances of Term Loan A or Term Loan
B).  The term "Loans" shall include all amounts outstanding on
the date hereof under the Existing Credit Facilities, which are
being renewed and restructured hereunder.

     "Loan Documents" means this Agreement, the Notes, the
Security Documents, the Guaranty, and any other agreement or
instrument executed in connection with the Existing Credit
Agreement or this Agreement, and all modifications, renewals,
extensions, supplements, restatements and replacements thereof.

     "LOC Application" is defined in Section 2.16.

     "Lockbox" means a post office box, or collectively post
office boxes, established by the Borrowers and Guarantors and
Lockbox Agent pursuant to the provisions of Section 5.6 and the
Lockbox Agreement.

     "Lockbox Accounts" means the cash collateral  accounts
maintained with Lockbox Agent and styled respectively "[name of
particular Borrower or particular Guarantor] Lockbox Account for
the Benefit and Under the Control of Bank of America, N.A., as
Administrative Agent for Lenders," which accounts shall be
(a) subject to the provisions of Section 5.6 and the Lockbox
Agreement, and (b) pledged and assigned to Administrative Agent,
for the benefit of the Lenders, as additional security for the
payment, performance and observance of the Obligations.

     "Lockbox Agent" means Bank of America.

     "Lockbox Agreement" means, collectively, the Lockbox
Agreement dated the date hereof, and any other lockbox agreement
or any other similar agreement or arrangement which is created to
cause the proceeds of Assigned Loans, Mortgaged Properties or
other Collateral, or any other proceeds of asset sales or other
dispositions to be paid to Administrative Agent hereunder to be
placed under the dominion and control of Administrative Agent (or
another agent) for the benefit of the Lenders.

     "Managed Asset Portfolios" means the portfolios of Assigned
Loans and Mortgaged Properties owned by Borrowers and Guarantors
comprised of distressed loan and real estate assets purchased by
the applicable Borrower or Guarantor, including Mortgaged
Properties owned by a Borrower or a Guarantor resulting from
foreclosure or settlement proceedings with respect to such
Assigned Loans.  A listing of such portfolios containing any
active Assigned Loans or Mortgaged Properties in the Borrowing
Base (regardless of whether any Borrowing Base value is
attributable thereto) as of the date hereof is set forth on
Schedule 13.

     "Margin Regulations" mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System, as in effect
from time to time.

     "Material Adverse Effect" means a material adverse effect on
(i) the business, results of operation, or financial condition of
AMRESCO and its Subsidiaries taken as a whole, excluding any
write-down or payments specifically included in the calculation
of Consolidated EBITDA as set forth in the definition thereof,
(ii) the ability of AMRESCO or any other Borrower or any
Guarantor to perform its obligations under the Loan Documents to
which it is a party, or (iii) the validity or enforceability of,
or the assertion by any Borrower or Guarantor of the invalidity
or unenforceability of, any of the Loan Documents or the rights
or remedies of the Administrative Agent or the Lenders
thereunder.

     "Material Indebtedness" is defined in Section 8.1.5.

     "Maximum Lawful Rate" means the maximum rate (or, if the
context so permits or requires, an amount calculated at such
rate) of interest which, at the time in question would not cause
the interest charged on the Loans at such time to exceed the
maximum amount which Lenders would be allowed to contract for,
charge, take, reserve, or receive under applicable federal or
state law after taking into account, to the extent required by
applicable law, any and all relevant payments, fees or charges
under the Loan Documents.  If under applicable law there is no
legal limitation on the amount or rate of interest that may be
charged on amounts outstanding in respect of the Loans, there
shall be no Maximum Lawful Rate in respect of the Loans,
notwithstanding any reference thereto herein or in any of the
other Loan Documents.

     "MIC" means Mortgage Investors Corporation, an Ohio
corporation.

     "MIC Merger Agreement" means the Agreement and Plan of
Merger, dated July 14, 1998 by and among AMRESCO, MIC
Acquisition, Inc., MIC, William Edwards and certain other
stockholders, as amended by the amendment thereto dated March 31,
1999.

     "MIC Notes" means those eight (8) promissory notes payable
to AMRESCO in an aggregate original principal amount not
exceeding $17,000,000, evidencing loans to former shareholders of
MIC, and with respect to which AMRESCO or any Subsidiary is
entitled to an offset under the MIC Merger Agreement, and all
renewals, extensions, modifications, restatements or replacements
of such notes.

     "MIC Transaction" means the transaction contemplated by the
MIC Merger Agreement.

     "Mortgage" means any deed of trust, mortgage, fixed or
floating charge or other Lien document covering a Mortgaged
Property executed by any Borrower or any Guarantor, granted in
favor of Administrative Agent, for the benefit of Lenders, to
secure repayment of the Loans and the other Obligations
(including without limitation all Mortgages executed pursuant to
the Existing Credit Agreement or the credit agreements replaced
thereby), complying with all laws of the applicable jurisdiction
for creating a valid lien on the subject Mortgage Property and
for recording in such jurisdiction, substantially in the form
approved by Administrative Agent, and all renewals, extensions,
modifications, amendments or supplements thereto, and all
mortgages, deeds of trust, fixed or floating charges or other
documents given in renewal, extension, modification, restatement
or replacement thereof.

     "Mortgaged Property or Mortgaged Properties" means all lots
or parcels of land which any Borrower or any Guarantor owns on
the Closing Date or which it may hereafter acquire and which has
not been granted as collateral for Indebtedness other than the
Credit Facilities as permitted by Section 7.15, and all
improvements, fixtures and personal property located thereon and
all other property referenced in and subject to the Mortgages.
The Mortgaged Property is intended to include all of the above-
described real property whether or not a Mortgage is actually
granted or filed.  A list of the Mortgaged Properties owned by
the Borrowers and the Guarantors as of the date hereof is
attached hereto as Schedule 16.

     "Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which
AMRESCO or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.

     "Net Mark-to-Market Exposure" of a Person means, as of any
date of determination, the excess (if any) of all unrealized
losses over all unrealized profits of such Person arising from
Rate Hedging Agreements.  "Unrealized losses" means the fair
market value of the cost to such Person to settle such Rate
Hedging Agreement as of the date of determination (assuming the
Rate Hedging Agreement were to be terminated as of that date),
and "unrealized profits" means the fair market value of the gain
to such Person to settle such Rate Hedging Agreement as of the
date of determination (assuming such Rate Hedging Agreement were
to be terminated as of that date).

     "Non-U.S. Borrower" is defined in Section 3.1(b).

     "Non-U.S. Lender" is defined in Section 3.5(iv).

     "Notes" means collectively the Revolving Notes, the Term
Loan A Notes, the Term Loan B Notes, and the Swingline Note; and
"Note" means any of them.

     "Obligations" means all present and future indebtedness,
obligations and liabilities of any and all of the Borrowers,
Guarantors and other Subsidiaries now or hereafter existing or
arising under or in connection with this Agreement, the Notes,
the Facility Letters of Credit, the Security Documents, or any
other of the Loan Documents (specifically including, without
limitation,  all Loans and the principal amount outstanding under
the Notes), together with:  (a) all interest accrued thereon;
(b) all fees payable to the Administrative Agent, the Issuing
Agent and/or the Lenders; (c) all costs, expenses, and reasonable
attorneys' fees of counsel to Administrative Agent and Lenders
(as a group) and of counsel to any Lender (subject to the
limitations set forth in Section 11.6) incurred in the
negotiation and documentation of this Agreement and the other
Loan Documents and of any consents or approvals under, or any
amendments, waivers or extensions of, or supplements to the Loan
Documents, and the administration (including without limitation
inspections, subject to the limitations in Section 7.9),
enforcement or collection of the Loan Documents and the
Obligations (specifically including, without limitation, any of
the foregoing incurred in connection with any bankruptcy or other
insolvency proceedings of any Borrower or any Guarantor); (d) the
reimbursement and payment of all sums which might be advanced by
Administrative Agent or any Lender to pay or satisfy amounts
required to be paid by any Borrower or any Guarantor under this
Agreement or under any other Loan Document; (e) all liability
which any Borrower or any Guarantor may incur with respect to any
Rate Hedging Obligations between any Borrower or any Guarantor
and any Lender or any Affiliate of a Lender (specifically
including without limitation in respect of all Facility Foreign
Currency Exchange Agreements); and (f) all costs, charges,
reasonable commissions, reasonable attorneys' fees and expenses
owing and to become owing in connection with the documentation,
administration, enforcement and collection of the foregoing
obligations and indebtedness, and those owing or to become owing
in connection with the repossession, operation, maintenance,
preservation or foreclosure of any or all of the Collateral;
regardless of whether such indebtedness, obligations and
liabilities are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several.  The
Obligations shall include all renewals, extensions,
modifications, restatements, rearrangements and replacements of
any of the above-described obligations and indebtedness.

     "Other Taxes" is defined in Section 3.5(ii).

     "Partially-Owned Subsidiary" means any Subsidiary of AMRESCO
that is not a Wholly-Owned Subsidiary.

     "Participants" is defined in Section 10.2.1.

     "Payment Date" means the first (1st) day of each calendar
month.

     "PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.

     "Permitted Debt Report and Certification" means a report
(a) showing such information concerning the Indebtedness of
Borrowers, Guarantors and their Subsidiaries as required by
Administrative Agent from time to time, including, without
limitation, the amount of each loan and other Indebtedness
(including Warehouse Lines) shown on Schedule 8, and any amended
or new Warehouse Lines obtained after the date hereof, the
entities obligated as borrowers thereunder, the payment schedule
thereunder, the maturity thereof, and the collateral and
guaranties securing such Indebtedness, (b) disclosing any
information of which AMRESCO or any Borrower is aware regarding
the maturity of, or the renewal or extension of, or the failure
of any lender to agree to renew or extend, any Warehouse Line or
any other loan or extension of credit to AMRESCO or any of its
Subsidiaries necessary for the operation of the business of
AMRESCO or any Subsidiary or for which AMRESCO and its
Subsidiaries do not have a means to repay or refinance, and
(c) certifying compliance by Borrowers and Guarantors with the
limitations on Indebtedness and Warehouse Lines contained in
Section 7.11 and otherwise in this Agreement, in detail
satisfactory to Administrative Agent.

     "Permitted Encumbrances" means with respect to any Mortgaged
Property:

          (a)  Liens securing the Notes in favor of the Lenders;

          (b)  Exceptions affecting title which are shown in a
Title Policy included in any Borrower's or any Guarantor's files
or are described with respect to a particular Mortgaged Property
in such Borrower's or Guarantor's underwriting or due diligence
files with respect to such Mortgaged Property;

          (c)  In the case of any portion of the Mortgaged
Property that is not covered by a Title Policy, minor defects in
title or customary easements, platted building lines, restrictive
covenants, mineral reservations and similar exceptions affecting
title which do not secure the payment of money;

          (d)  Inchoate statutory or operators' liens securing
obligations for labor, services, materials and supplies furnished
to the Mortgaged Properties, which (i) are not delinquent, or
(ii) are being contested by any Borrower or any Guarantor in good
faith and for which such Borrower or such Guarantor has obtained
a proper payment and performance bond in the amount of the
contested claim;

          (e)  Mechanics', materialmen's, warehousemen's,
journeymen's and carriers' liens and other similar Liens arising
by operation of law or statute in the ordinary course of business
if (i) the underlying claim is not delinquent and did not in any
event cover a billing period not exceeding sixty (60) days, or
(ii) unless the claim giving rise to such Lien is being contested
by any Borrower or any Guarantor in good faith and for which such
Borrower or Guarantor has obtained a proper payment and
performance bond in the amount of the contested claim; and

          (f)  Liens for Taxes or other impositions not yet due
or not yet delinquent, or, if delinquent, that are being
contested by the applicable Borrower or Guarantor as permitted by
and in accordance with the terms and conditions set forth in
herein.

     "Permitted Preferred Stock" means one or more series of
preferred stock of AMRESCO issued after the date hereof under the
terms of which the holders thereof are not entitled to any
distributions or dividends or repurchase rights (other than
dividends payable in additional shares of common stock of AMRESCO
or Permitted Preferred Stock) at any time prior to full and final
payment of all the Credit Facilities.

     "Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or
instrumentality thereof.

     "Plan" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which AMRESCO or
any member of the Controlled Group may have any liability.

     "Pledge Agreement" means, collectively, the Stock Pledge
Agreement dated as of August 12, 1998, executed by AMRESCO and
the Existing Guarantors and certain other Subsidiaries of AMRESCO
in connection with the Existing Credit Agreement, as amended by
the Supplements and further amended on the date hereof, and all
other pledges of, and security agreements covering, stock or
other equity interests, executed by any one or more Borrowers or
Guarantors or other Subsidiaries of AMRESCO, in favor of
Administrative Agent, for the benefit of the Lenders, covering
all of the issued and outstanding stock or other ownership
interests owned by AMRESCO and the other Borrowers and the
Guarantors, and every other Subsidiary of AMRESCO and the other
Borrowers (expressly including the stock owned by AMRESCO or any
other Borrower or any Guarantor or other Subsidiary in
Subsidiaries established as bankruptcy remote special purpose
entities in connection with any asset securitization and of all
Foreign Subsidiaries, including indirect Foreign Subsidiaries
whether or not Guarantors, except as provided below), and all
stock or other ownership interests in each Partially-Owned
Subsidiary owned by a Borrower or a Guarantor or any Subsidiary
wholly-owned, directly or indirectly, by a Borrower or a
Guarantor, but excluding only (a) the stock in the Investment
Advisor Subsidiaries and (b) subject to Section 5.1.4, the stock
and other ownership interests in the Excluded Foreign
Subsidiaries (other than AMRESCO's 100% stock ownership interest
in AMRESCO Japan Portfolio Investments, Inc., which shall be
pledged) or owned by the Excluded Foreign Subsidiaries, and all
amendments, supplements and restatements thereof.  Without
limitation of the foregoing, the term Pledge Agreement includes
(i) the separate Stock Pledge Agreement dated August 12, 1998,
executed by AMRESCO UK Holdings Limited and AMRESCO UK Ventures
Limited in favor of Administrative Agent, as supplemented by
Supplement III, and (ii) that certain Security Agreement dated
June 28, 1996, executed by AMRESCO, in favor of NationsBank of
Texas, N.A., covering all shares of stock owned by AMRESCO in its
Wholly-Owned Subsidiary AMRESCO Jersey Ventures Limited, a
company incorporated under the laws of Jersey, Channel Islands,
as amended (including by Supplemental Agreement dated as of
December 15, 1999 in connection with the Supplement III).

     "Pledged Asset Schedule and Certification" means a schedule
of all assets that are owned by (a) Borrowers and Guarantors and
required to be pledged to Administrative Agent for the benefit of
the Lenders pursuant to the Loan Documents and (b) each Foreign
Subsidiary showing which assets have been pledged and to whom and
which assets are not pledged, and a certification that such
assets have been so pledged or are not pledged; provided, that
any assets listed therein but not so pledged shall (except in the
case of assets of Foreign Subsidiaries, which shall be subject to
Section 5.1.4) be pledged to Administrative Agent for the benefit
of the Lenders as soon as practical but in no case more than
thirty (30) days after the required date for delivery of such
schedule.

     "Pricing Schedule" means Schedule 5 attached hereto and
identified as such, as such Schedule may from time to time be
amended, modified, supplemented, restated or replaced.

     "Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.

     "Purchaser" is defined in Section 10.3.1.

     "Rate Hedging Agreement" means an agreement, device or
arrangement providing for payments which are related to
fluctuations of interest rates, exchange rates, or forward rates
or commodity prices, including, but not limited to,
dollar-denominated or cross-currency interest rate swap or
exchange agreements, currency (including any Eligible Currency or
other foreign currency) exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest
rate options, puts and warrants.

     "Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent, and
howsoever and whenever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all Rate Hedging
Agreements, specifically including without limitation all
Facility Foreign Currency Exchange Agreements, and (b) any and
all cancellations, buy backs, reversals, terminations or
assignments of any Rate Hedging Agreement.

     "Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.

     "Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal
Reserve System.

     "Related Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that
invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such
investment advisor.

     "Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure
to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.

     "Reports" is defined in Section 11.6.

     "Representatives" is defined in Section 11.6.

     "Required Lenders" means Lenders in the aggregate having at
least 66b% of the Aggregate Commitment; provided that if the
Revolving Commitment has been terminated, then "Required Lenders"
shall mean Lenders whose Aggregate Loan Percentages, in the
aggregate, equal or exceed 66b%.

     "Reserve Requirement" means, on any day, the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities.  Each determination by
Administrative Agent of the Reserve Requirement shall, in the
absence of manifest error, be conclusive.

     "Residual Interests Report" means a report satisfactory to
Administrative Agent describing, by category and book value, the
Retained Interests in Securtizations (as shown in AMRESCO's
consolidated balance sheet) owned by any Borrower, Guarantor or
Subsidiary.

     "Revolving Commitment" means the aggregate amount of the
Commitment Amounts of all the Revolving Lenders under the
Revolving Credit Facility as set forth on the Commitment
Schedule, being $92,000,000 on the date hereof, subject to
limitations on availability and reductions as provided in this
Agreement.  The amount of the Revolving Commitment available at
any time for Advances hereunder shall be limited to the Borrowing
Base then in effect and shall be reduced by (i) the Facility
Letter of Credit Exposure, (ii) the outstanding amount of all
Swingline Advances, and (iii) the Facility FX Exposure, each in
the amounts as then in effect.

     "Revolving Credit Facility" is defined in Section 2.1.

     "Revolving Credit Termination Date" means June 30, 2000, or
any earlier date on which the Revolving Commitment is reduced to
zero or otherwise terminated pursuant to the terms hereof.

     "Revolving Lenders" means those Lenders designated as
Revolving Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.

     "Revolving Note" means a promissory note in the form
attached hereto as Exhibit D-1 in the initial amount of a
Revolving Lender's Commitment Amount, executed by all the
Borrowers and payable to the order of the applicable Revolving
Lender, and any modifications, amendments or supplements thereto,
any substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.

     "SBA Guaranteed Loans" means loans that are originated or
held by AMRESCO Independence Funding, Inc. (or another Subsidiary
of AMRESCO licensed to originate or hold SBA guaranteed loans,
subject to Administrative Agent's prior written approval of any
such other Subsidiary) for which the Small Business
Administration (the "SBA") has issued or is to issue a guaranty
for a portion of any such loans pursuant to an agreement between
AMRESCO Independence Funding, Inc. (or such other Subsidiary
licensed to originate or hold SBA guaranteed loans and so
approved by Administrative Agent) and the SBA (an "SBA Lender
Agreement"), the SBA loan customer lists, the servicing rights
and other general intangibles related to such SBA Guaranteed
Loans or the collection or servicing thereof (excluding deposit
accounts not containing any payments on account of or other
proceeds of SBA Guaranteed Loans or the collection or servicing
thereof), and computer hardware and software related to and
utilized in the servicing solely of such SBA Guaranteed Loans and
other SBA Lender Agreement Assets, or any proceeds or products of
such SBA Guaranteed Loans, or other items for which the
applicable SBA Lender Agreement prohibits assignment thereof,
including without limitation retained interests in SBA Guaranteed
Loans or securitizations thereof, collection accounts and other
cash deposit accounts related to such SBA Guaranteed Loans, and
real property acquired by foreclosure of such SBA Guaranteed
Loans (collectively, "SBA Lender Agreement Assets").

     "SBA Lender Agreement" is defined in the definition of SBA
Guaranteed Loans.

     "SBA Lender Agreement Assets" is defined in the definition
of SBA Guaranteed Loans.

     "Schedule" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.

     "Section" means a numbered section of this Agreement, unless
another document is specifically referenced.

     "Security Agreement" means, collectively, the Security
Agreement dated as of August 12, 1998, executed by AMRESCO and
the Existing Guarantors (except for the Foreign Subsidiaries
other than AMRESCO Funding Canada Inc.) in connection with the
Existing Credit Agreement, as amended by the Supplements and
further amended on the date hereof, and all other security
agreements executed by any Borrower and/or any Guarantor, or any
other Subsidiary of AMRESCO pursuant to Section 5.1, in favor of
Administrative Agent, on behalf of and for the benefit of
Lenders, as security for the Obligations, which security
agreements are intended to cover all personal property of any
type of the Borrowers and the Guarantors (and any other
Subsidiaries) executing such agreements other than (a) the items
of collateral specifically pledged for secured Indebtedness
permitted under Section 7.11, including Warehouse Lines, and
(b) SBA Guaranteed Loans and related SBA Lender Agreement Assets,
and all amendments, modifications, supplements and replacements
thereof.

     "Security Documents" means, collectively, (a) the Collateral
Assignment, the Security Agreement, the Pledge Agreement, the
Lockbox Agreement, all Mortgages, all Account Assignments and all
other documents or instruments granting a Lien in favor of the
Lenders (or Administrative Agent for the benefit of or on behalf
of the Lenders) as collateral for the Obligations, and all
financing statements and other filings, certificates and
instruments related thereto, and all supplements, modifications,
renewals or extensions thereof, and any documents executed in
modification, renewal, extension or replacement thereof, and
(b) the Guaranty and the Contribution Agreement executed by the
Guarantors.

     "Servicer" means Lend Lease or one or more of its Affiliates
party to the Servicing Agreement, or such successor Servicer as
may have been approved by Administrative Agent pursuant to
Section 7.20.

     "Servicing Agreement" means the Asset Management and
Servicing Agreement to be executed and delivered pursuant to the
Lend Lease Agreement on the Lend Lease Closing Date pursuant to
which the Servicer will manage and service assets of certain of
AMRESCO's Subsidiaries from and after the Lend Lease Closing
Date, and any modifications or amendments thereof or
substitutions or replacements thereof approved by Administrative
Agent pursuant to Section 7.20.

     "Settlement Payment" is defined in Section 2.1.5.

     "Single Employer Plan" means a Plan maintained by AMRESCO or
any member of the Controlled Group for employees of AMRESCO or
any member of the Controlled Group.

     "Specified Asset Release Agreement" is defined in
Section 5.7.6.

     "SREP Additional Fundings" means amounts expended from and
after the date hereof by AMRESCO or by AMRESCO Commercial
Finance, Inc. or AMRESCO Funding Canada Inc., as applicable, for
(a) funding additional commitments of AMRESCO Commercial Finance,
Inc. or AMRESCO Funding Canada Inc., as applicable, under
Assigned Loans in the Structured Real Estate Portfolio, and
(b) other funding obligations, cost overruns and other expenses
paid by AMRESCO Commercial Finance, Inc., AFC Equities, L.P. or
AMRESCO Funding Canada Inc., as applicable, with respect to the
SREP Assets.

     "SREP Assets" means the Assigned Loans, the equity interests
and the Mortgaged Property owned by AMRESCO Commercial Finance,
Inc., AMRESCO Funding Canada, Inc. or AFC Equities, L.P., which
comprise the Structured Real Estate Portfolio, as described on
Schedule 14.

     "SREP-Ocwen Sale" means the sale to Ocwen Federal Bank FSB
of a significant portion of the SREP Assets anticipated to occur
on or within ten (10) Business Days after the effective date
hereof, as disclosed to Administrative Agent and the Lenders
prior to the date hereof.

     "SREP Required Payment" means a payment in the amount of 95%
of (a) the net proceeds (i.e. gross cash proceeds less reasonable
and customary closing costs and expenses as approved by
Administrative Agent) from the Structured Real Estate Portfolio
Sale or any Structured Real Estate Asset Sale, and (b) the amount
of any principal payment (whether scheduled, mandatory or a
voluntary prepayment) in excess of $500,000 made on an Assigned
Loan in the Structured Real Estate Portfolio or other SREP Asset.

     "SREP Required Payment Date" means (a) the SREP Sale Date,
and (b) the date of any principal payment in excess of $500,000
on an Assigned Loan in the Structured Real Estate Portfolio or
other SREP Asset.

     "SREP Sale Date" means the date of closing of the Structured
Real Estate Portfolio Sale.

     "Structured Real Estate Asset Sale" means the sale of any
one of the SREP Assets.

     "Structured Real Estate Portfolio" means the real estate
Assigned Loans and other SREP Assets owned by AMRESCO Commercial
Finance, Inc., AFC  Equities, L.P. and AMRESCO Funding Canada
Inc., respectively, described in Schedule 14.

     "Structured Real Estate Portfolio Sale" means the sale by
AMRESCO, AMRESCO Commercial Finance, Inc., AFC  Equities, L.P.,
AMRESCO Funding Canada Inc., and any other applicable
Subsidiaries of AMRESCO, in one or a series of related
transactions, of all or substantially all (as determined pursuant
to Section 2.2.1(b)) of the SREP Assets (including without
limitation the SREP-Ocwen Sale).

     "Subordinated Indebtedness" means the Indebtedness of
AMRESCO evidenced by notes made pursuant to the terms of those
certain Indentures dated January 15, 1996, and March 1, 1997,
executed by and between AMRESCO and Bank One, Columbus, N.A., as
Trustee.

     "Subsidiary" means, for any Person, any corporation,
partnership, limited liability company or other entity (a) of
which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions (including that of a general
partner) is at the time directly or indirectly owned by, or the
management is otherwise controlled by, such Person and any
Subsidiaries of such Person, and (b) in the case of AMRESCO and
its Subsidiaries, the financial statements of which are
consolidated with AMRESCO's financial statements in accordance
with Agreement Accounting Principles.  The term Subsidiary shall
include Subsidiaries of Subsidiaries (and so on).  Unless
otherwise qualified, references to "Subsidiary" or "Subsidiaries"
herein shall refer to those of AMRESCO.

     "Substantial Portion" means, with respect to the Property of
AMRESCO and its Subsidiaries, Property which (a) represents more
than 10% of the consolidated tangible assets of AMRESCO and its
Subsidiaries as would be shown in the consolidated financial
statements of AMRESCO and its Subsidiaries as at the beginning of
the twelve-month period ending with the month in which such
determination is made, or (b) is responsible for more than 10% of
the consolidated net sales or of the consolidated net income of
AMRESCO and its Subsidiaries as reflected in the financial
statements referred to in clause (a) above.

     "Supplements" and "Supplement III" are defined in Recital I
of this Agreement.

     "Swingline Advance" means any Advance made by Swingline
Lender to a Borrower pursuant to Section 2.1.4.

     "Swingline Commitment" means (i) prior to and on the
Transition Date, $25,000,000, and (ii) after the Transition Date,
$10,000,000.

     "Swingline Lender" means Bank of America.

     "Swingline Note" means the Swingline Note made by Borrowers
payable to the order of Swingline Lender, substantially in the
form attached as Exhibit D-4, evidencing the Swingline Advances,
and any amendments and modifications thereto, any substitutions
therefor, and any replacements, restatements, renewals or
extension thereof, in whole or in part.

     "Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and
all liabilities with respect to the foregoing, but excluding
Excluded Taxes.

     "Telerate Screen" means the display designated as Screen
3750 (as to Dollars) on the Telerate System or such other screen
on the Telerate System as shall display the London interbank
offered rates for deposits in Dollars quoted by selected banks.

     "Term Lenders" means collectively the Term Loan A Lenders
and the Term Loan B Lenders, in such capacities.

     "Term Loan A" means the term loan to Borrowers by the Term
Loan A Lenders as set forth on the Commitment Schedule, in the
aggregate amount of $56,232,500, which Term Loan A represents the
term loan facility established under the Existing Credit
Agreement, which term loan facility is being restructured and
modified in accordance with the terms of this Agreement.

     "Term Loan A Lenders" means those Lenders designated as the
Term Loan A Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.

     "Term Loan A Note" means a promissory note in the form
attached hereto as Exhibit D-2 evidencing a Term Loan A Lender's
share of Term Loan A, executed by all the Borrowers and payable
to the order of a Term Loan A Lender in the amount of such
Lender's Term Loan A Percentage of Term Loan A, and any
modifications, amendments or supplements thereto, any
substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.

     "Term Loan A Percentage" means, for each Term Loan A Lender,
the percentage of Term Loan A held by such Term Loan A Lender as
set forth on the Commitment Schedule, as amended from time to
time.

     "Term Loan B" means the term loan to Borrowers by the Term
Loan B Lenders as set forth on the Commitment Schedule in the
aggregate amount of $356,092,500, which Term Loan B represents a
portion of the revolving credit facility established under the
Existing Credit Agreement, which portion is being converted to a
term loan hereunder with no further availability for reborrowings
in accordance with the terms of this Agreement.

     "Term Loan B Lenders" means those Lenders designated as the
Term Loan B Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.

     "Term Loan B Note" means a promissory note in the form
attached hereto as Exhibit D-3 evidencing a Term Loan B Lender's
share of Term Loan B, executed by all the Borrowers and payable
to the order of a Term Loan B Lender in the amount of such
Lender's Term Loan B Percentage of Term Loan B, and any
modifications, amendments or supplements thereto, any
substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.

     "Term Loan B Percentage" means, for each Term Loan B Lender,
the percentage of Term Loan B held by such Term Loan B Lender as
set forth on the Commitment Schedule, as amended from time to
time.

     "Term Loan Facilities" means Term Loan A and Term Loan B.

     "Term Loan Facilities Maturity Date" means June 30, 2000.

     "Title Company" means a title company or title companies
selected by a Borrower or a Guarantor and not disapproved by
Administrative Agent, together with any issuing agent that issues
all or any part of a Title Policy.

     "Title Policy" means a Mortgagee or Loan Policy of Title
Insurance issued and underwritten by a Title Company for the
benefit of (a) Administrative Agent, on behalf of the Lenders,
covering the Mortgaged Property therein described and insuring
the lien of the Mortgage which covers such Mortgaged Property, or
(b) the applicable Borrower or Guarantor owning the applicable
Assigned Loan insuring a lien on Underlying Real Estate securing
such Assigned Loan; provided that with respect to an Assigned
Loan or Mortgaged Property owned by AMRESCO Funding Canada Inc.
and where the subject Underlying Real Estate or Mortgaged
Property is located in Canada, the term "Title Policy" may
include a title opinion issued by Canadian counsel in favor of
Administrative Agent and the Lenders, in form and substance
acceptable to Administrative Agent and its counsel.

     "Total Consolidated Indebtedness" means at any time of
determination the sum of (a) Consolidated Indebtedness, plus
(b) the aggregate amount of unfunded obligations of any Borrower
or any Guarantor in respect of all outstanding Letters of Credit,
plus (c) the amount of any Contingent Obligations which are
reasonably quantifiable by Borrowers (as confirmed by
Administrative Agent) and which do not duplicate any amounts
otherwise included under this definition of Total Consolidated
Indebtedness.

     "Transition Date" means the earlier of (i) the Lend Lease
Closing Date and (ii) the date on which the Borrowers are
obligated to make a principal payment on the Term Loans pursuant
to Section 2.2.1(e).

     "Transferee" is defined in Section 10.4.

     "Transfers of Liens" means an absolute assignment of note
and liens (including, without limitation, all mortgages and any
other security for each of the Assigned Loans) or other similar
document transferring a lien or security interest, executed by
any Borrower and/or any Guarantor to Administrative Agent, for
the benefit of the Lenders with respect to any Assigned Loan, in
form reasonably acceptable to Administrative Agent (which
document may also be referred to as an "Assignment of Lien" in
certain states).

     "Type" means, with respect to any Advance or Loan, its
nature as a Floating Rate Portion or a Eurocurrency Portion.

     "Underlying Real Estate" means the real property, together
with all improvements thereon, which secures any of the Assigned
Loans or any one of such parcels of real property.
     "Unfunded Liabilities" means the amount (if any) by which
the present value of all vested and unvested accrued benefits
under all Single Employer Plans exceeds the fair market value of
all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans and as
if such Plans were terminated on that date.

     "Warehouse Lines" means Indebtedness of any Borrower (other
than AMRESCO, it being understood and agreed that AMRESCO shall
not have, or have any liability for, any Warehouse Lines), any
Guarantor, any Excluded Subsidiary or any Foreign Subsidiary
created for the purpose of acquiring or originating loans,
leases, securities and, if approved by Administrative Agent in
its sole and absolute discretion, other asset types; provided
that (a) such loans, leases, securities or other assets are
intended to be sold, repaid or otherwise liquidated in order to
make payments on such Indebtedness, (b) such Indebtedness is
related to the lines of business of Borrowers, Guarantors and the
Foreign Subsidiaries permitted by Section 7.4, (c) any such
Indebtedness shall be fully collateralized when incurred by
assets not included in the Borrowing Base, (d) such Indebtedness
shall be non-recourse to AMRESCO, and shall be recourse only to
the Subsidiary that received proceeds from such Indebtedness and
cross-collateralized only with Indebtedness that has the same
borrower and lender, and (e) there shall exist at the time such
Indebtedness is incurred a strategy for selling or otherwise
liquidating specific collateral securing such Indebtedness in a
commercially reasonable manner within the time period typically
required in the industry (and not in a liquidation or distress
situation) and by Borrowers and their Subsidiaries for such
specific collateral, but in no event more than twelve (12) months
following its inclusion as collateral for the applicable
Indebtedness.

     "Wholly-Owned Subsidiary" of a Person means (a) any
Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (b) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or
controlled.

     "Year 2000 Problem" means any significant risk that computer
hardware or software used in the Borrowers' and Guarantors'
business or operations will not in the case of any dates or time
periods occurring after December 31, 1999 function at least as
effectively as in the case of dates or time periods occurring
prior to January 1, 2000.

     "Year 2000 Program" is defined in Section 6.19.

     Section 1.2.   Singular and Plural of Definitions .  Each
term defined in the singular form in Section 1.1 shall mean the
plural thereof when the plural form of such term is used in this
Agreement, and each term defined in the plural form in
Section 1.1 shall mean the singular thereof when the singular
form of such term is used in this Agreement.

     Section 1.3.   Substantive Definitions .  The terms,
provisions and agreements set forth in the definitions contained
in Section 1.1 shall be substantive terms of this Agreement and
fully binding on the parties hereto.

     Section 1.4.   Money .  Unless stipulated otherwise, all
references herein or in any of the other Loan Documents to
"Dollars," "$," "money," "payments" or other similar financial or
monetary terms are references to lawful money of the United
States of America.

     Section 1.5.   Captions; References .  The captions and
headings in this Agreement and in the table of contents hereof
are for convenience of reference only and shall not define,
affect or limit any of the terms or provisions hereof.  All
references herein to Articles and Sections are, unless specified
otherwise, references to articles and sections of this Agreement.
Unless specifically indicated otherwise, all references herein to
an "Exhibit," "Annex" or "Schedule" are references to exhibits,
annexes or schedules attached hereto, all of which are
incorporated herein and made a part hereof for all purposes, the
same as if set forth fully herein, it being understood that if
any exhibit, annex or schedule attached hereto which is to be
executed and delivered contains blanks, the same shall be
completed correctly and in accordance with this Agreement prior
to or at the time of the execution and  delivery thereof.  The
words "herein," "hereof," "hereunder" and other similar compounds
of the word "here" when used in this Agreement shall refer to the
entire Agreement and not to any particular provision or section
unless specifically indicated otherwise.  All references to
"days," or number of days, or periods comprised of days, shall
mean and refer to calendar days unless specified to be Business
Days.

     Section 1.6.   Accounting Terms and Determinations .  Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with
Agreement Accounting Principles.

                           ARTICLE II

                      THE CREDIT FACILITIES

     Section 2.1.   Commitments .

          Section 2.1.1.  (a) Revolving Credit Facility Advances.
From  and including the date of this Agreement and prior  to  the
Revolving   Credit   Termination  Date,  each  Revolving   Lender
severally agrees, on the terms and conditions set forth  in  this
Agreement,  to  make revolving loans in Dollars to the  Borrowers
from  time  to time in amounts not to exceed in the aggregate  at
any  one  time  outstanding the Dollar Amount of  its  Commitment
Percentage of the Revolving Commitment, as limited at  all  times
to  the  applicable Borrowing Base then in effect (the "Revolving
Credit  Facility"),  less  the sum of  such  Lender's  Commitment
Percentage  of  the  Facility  Letter  of  Credit  Exposure,  the
Facility  FX Exposure and outstanding Swingline Advances  at  the
time  in  question.   Subject  to and  upon  the  terms  of  this
Agreement, the Borrowers may borrow, repay and reborrow under the
Revolving  Credit  Facility at any time prior  to  the  Revolving
Credit Termination Date.  The commitment of each Revolving Lender
to   lend   hereunder  shall  expire  on  the  Revolving   Credit
Termination  Date.  The Revolving Credit Facility shall  be  used
solely  for  (i)  prior  to and on the Transition  Date,  general
corporate  purposes in the ordinary course of business (excluding
payment  of any portion of the Lend Lease Required Payment),  and
(ii)  following  the Transition Date, for (A)  general  corporate
purposes  in  the  ordinary course of  business  related  to  the
Continuing   Operations,  (B)  certain  specifically   designated
fundings  for  the  Discontinued Operations  related  to  foreign
exchange  contracts, (C) certain specifically designated fundings
to  cover  loan  commitments and related  cost  overruns  of  the
Discontinued Operations (including the SREP Additional  Fundings)
and  other operating expenses incurred in the ordinary course  of
business   related   to   the   Discontinued   Operations,    and
(D)  severance,  transition  and related  costs  to  be  paid  in
connection  with the Discontinued Operations, and  (iii)  at  any
time,   (A)  Facility  Letters  of  Credit  in  accordance   with
Section  2.1.1(b)  and (B) funding of Settlement  Payments  under
Facility Foreign Currency Exchange Agreements in accordance  with
Section 2.1.5.

           (b)  Facility Letters of Credit.  Facility Letters  of
Credit may be issued by the Issuing Lender for the account of any
Borrower  or  any  Guarantor for any of the  purposes  for  which
a  Borrower  can  obtain an Advance under  the  Revolving  Credit
Facility; provided that, (i) each such Facility Letter of  Credit
shall  be  issued  on  a  Business Day  occurring  prior  to  the
Revolving Credit Termination Date, (ii) after the issuance of any
such  Facility Letter of Credit (A) the Facility Letter of Credit
Exposure shall not exceed prior to and on the Lend Lease  Closing
Date,  Twenty  Million  and  No/100  Dollars  ($20,000,000),  and
following   such   date,   Ten   Million   and   No/100   Dollars
($10,000,000),  and (B) the Facility Letter of  Credit  Exposure,
plus  the outstanding balance of the Advances under the Revolving
Credit Facility (including Swingline Advances), plus the Facility
FX  Exposure  shall not be greater than the Revolving  Commitment
(or,  if  less at the time in question, the applicable  Borrowing
Base),  (iii)  each such Facility Letter of Credit must  have  an
expiration  date  no later than one (1) year after  the  issuance
thereof,  provided that, with respect to any Facility  Letter  of
Credit  that has an expiration date later than thirty  (30)  days
prior  to the Revolving Credit Termination Date, AMRESCO  or  the
applicable Borrower or Guarantor shall, on or before the 30th day
prior  to  the  Revolving Credit Termination Date,  deposit  with
Administrative  Agent in a blocked account held as  security  for
the  Obligations, pursuant to an Account Assignment  executed  by
AMRESCO  and  any  other applicable Borrower  or  Guarantor,  and
otherwise on terms acceptable to Administrative Agent, an  amount
designated  by  Administrative Agent up  to  the  maximum  stated
amount  of such Facility Letter of Credit, with the understanding
that unless a Default or Event of Default is continuing, any such
deposited  funds related to a specific Facility Letter of  Credit
will  be  released  to  AMRESCO (or the  applicable  Borrower  or
Guarantor) upon the expiration and return of such Facility Letter
of  Credit.   Each  such  Facility  Letter  of  Credit  shall  be
denominated  in  Dollars.   In addition  to  the  foregoing,  the
issuance and drawings under each Facility Letter of Credit  shall
be   subject  to  and  in  accordance  with  the  provisions   of
Section 2.16.  To the extent that funds are ever drawn under  any
of the Facility Letters of Credit, each such draw will be paid by
the  Issuing  Lender  in  Dollars,  and,  if  such  draw  is  not
reimbursed  by  Borrowers  and by the time  and  as  required  in
Section  2.16,  the Revolving Lenders will make an  Advance  (pro
rata  in  accordance  with  each  Revolving  Lender's  Commitment
Percentage)  in  the  amount so paid by  the  Issuing  Lender  to
reimburse  the  Issuing Lender for such draw, in accordance  with
the terms of Section 2.16.

           Section  2.1.2.  Term Loan A. Each Term Loan A  Lender
severally agrees, on the terms and conditions set forth  in  this
Agreement,  to  renew  and  extend to the  Term  Loan  Facilities
Maturity  Date  its  portion of the Term Facility  under  and  as
defined  in the Existing Credit Agreement as its portion of  Term
Loan A, in Dollars only, in the amount as shown on the Commitment
Schedule.

           Section  2.1.3.  Term Loan B. Each Term Loan B  Lender
severally agrees, on the terms and conditions set forth  in  this
Agreement,  to  renew  and  extend to the  Term  Loan  Facilities
Maturity Date the portion of its Revolving Loan Commitment Amount
under and as defined in the Existing Credit Agreement outstanding
on  the date hereof, refinanced hereunder in Dollars only, as its
portion  of Term Loan B, in the amount as shown on the Commitment
Schedule.   Borrowers and Guarantors understand  and  agree  that
even  though  under the Existing Credit Agreement the outstanding
indebtedness  being renewed as Term Loan B was a portion  of  the
revolving  credit  facility thereunder, Term  Loan  B  is  not  a
revolving credit facility and Borrowers and Guarantors shall  not
be entitled to reborrow any amounts paid on Term Loan B.

           Section 2.1.4.  Swingline Commitment.  (a) Subject  to
the  terms  and  conditions of this Agreement,  Swingline  Lender
agrees  to  make Swingline Advances to Borrowers in Dollars  from
time  to  time  from  the  date  of this  Agreement  through  the
Revolving  Credit Termination Date; provided, that the  aggregate
principal  amount  of all outstanding Swingline  Advances  (after
giving  effect  to any amount requested), shall  not  exceed  the
lesser  of  (i)  the Revolving Commitment less  the  sum  of  all
outstanding Advances under the Revolving Credit Facility and  the
Facility  Letter of Credit Exposure and the Facility FX  Exposure
(and  limited  at all times to the Borrowing Base) and  (ii)  the
Swingline  Commitment.  Swingline Advances shall be  refunded  by
the  Revolving  Lenders  on  demand by  Swingline  Lender.   Such
refundings  shall be made by the Revolving Lenders in  accordance
with their respective Commitment Percentages and shall thereafter
be  reflected as Advances under the Revolving Credit Facility  of
the   Revolving  Lenders  on  the  books  and  records   of   the
Administrative  Agent.   Each Revolving  Lender  shall  fund  its
respective Commitment Percentage of Advances as required to repay
Swingline  Advances  outstanding to  the  Swingline  Lender  upon
demand  by  the Swingline Lender but in no event later than  2:00
p.m. (Dallas time) on the next succeeding Business Day after such
demand  is  made.  No Revolving Lender's obligation to  fund  its
respective Commitment Percentage of a Swingline Advance shall  be
affected  by  any other Revolving Lender's failure  to  fund  its
Commitment  Percentage  of a Swingline  Advance,  nor  shall  any
Revolving  Lender's Percentage be increased as a  result  of  any
such failure of any other Revolving Lender to fund its Commitment
Percentage.

           (b)  Borrowers shall pay to Swingline Lender on demand
the  amount  of  any  Swingline Advances to  the  extent  amounts
received  from the Revolving Lenders are not sufficient to  repay
in  full the outstanding Swingline Advances requested or required
to be refunded.

          (c)  Each Revolving Lender acknowledges and agrees that
its  obligation  to refund Swingline Advances in accordance  with
the terms of this Section 2.1.4 is absolute and unconditional and
shall  not be affected by any circumstance whatsoever (including,
without  limitation,  repayment of  such  Swingline  Advances  by
Borrowers pursuant to the above paragraph if the same is required
to  be refunded to Borrowers by Swingline Lender; provided,  that
if  prior  to the refunding of any outstanding Swingline  Advance
pursuant  to  this Section 2.1.4, one of the events described  in
Section 8.1.6 or 8.1.7 shall have occurred, each Revolving Lender
will,  on  the  date the applicable Advance under  the  Revolving
Credit  Facility  would  have been made,  purchase  an  undivided
participating interest in the Swingline Advance to be refunded in
an  amount  equal to its Commitment Percentage of  the  aggregate
amount  of  such Swingline Advance).  Each Revolving Lender  will
immediately  transfer  to the Swingline  Lender,  in  immediately
available  funds,  the  amount  of its  participation,  and  upon
receipt  thereof  the  Swingline  Lender  will  deliver  to  such
Revolving  Lender  a  certificate evidencing  such  participation
dated the date of receipt of such funds and for such amount.

           Section  2.1.5.  Facility  Foreign  Currency  Exchange
Agreements.  (a) Due to the continued need for the Borrowers  and
the  Guarantors  to  have  funds  available  in  certain  foreign
currencies  from time to time, any one or more of  the  Revolving
Lenders or Affiliates of Revolving Lenders (but not to exceed two
Revolving Lenders or Affiliates of Revolving Lenders at  any  one
time)  may  enter  into  one  or more Facility  Foreign  Currency
Exchange  Agreements  with  AMRESCO,  together  with  any   other
applicable  Borrowers  or Guarantors, relating  to  any  Eligible
Currencies,   such  agreements  to  be  non-speculative   foreign
currency  spot  purchases,  foreign currency  swap  contracts  or
foreign  currency forward contracts only, and to be generally  in
the  form of and on terms comparable to foreign currency exchange
agreements customarily entered into by major national  banks  for
foreign currency transactions similar to those entered into  with
AMRESCO,  such as the International Foreign Exchange and  Options
Master  Agreement  ("FEOMA") promulgated by the Foreign  Exchange
Committee  in  association with the British Bankers  Association,
the  Canadian  Foreign Exchange Committee and the  Tokyo  Foreign
Exchange  Market  Practices Committee,  and  documents  ancillary
thereto, and to have a final termination or settlement date on or
before  the  Revolving  Credit Facility  Termination  Date.   The
maximum  Facility FX Exposure under all Facility Foreign Currency
Exchange Agreements shall not at any time exceed $10,000,000,  as
determined  daily  by Administrative Agent based  on  information
furnished to Administrative Agent from each FX Lender pursuant to
Section 2.1.5(b).  Borrowers and Lenders agree that the amount of
the   Revolving  Commitment  available  for  Advances,  Swingline
Advances  and  Facility  Letters of Credit  under  the  Revolving
Credit  Facility shall be reduced by the aggregate amount of  the
Facility  FX  Exposure under all such Facility  Foreign  Currency
Exchange Agreements, as determined daily by Administrative  Agent
based on information furnished to Administrative Agent from  each
FX Lender pursuant to Section 2.1.5(b), up to a maximum amount of
$10,000,000.   No  Facility Foreign Currency  Exchange  Agreement
shall  be  entered  into if immediately  prior  to  or  upon  the
entering  into  of such agreement, the aggregate  amount  of  the
Facility  FX  Exposure,  plus  the  outstanding  balance  of  the
Advances under the Revolving Credit Facility (including Swingline
Advances),  plus  the Facility Letter of Credit  Exposure,  would
exceed  the  Revolving Commitment (or, if less  at  the  time  in
question, the applicable Borrowing Base).

      (b)   Any Lender or Affiliate of a Lender desiring to enter
into a Facility Foreign Currency Exchange Agreement must give  to
Administrative Agent prior notice (in a manner deemed  sufficient
by  Administrative Agent) of the type and terms of such  proposed
agreement,  the  stated maximum amount of  the  foreign  currency
exchange agreement and the maximum Dollar Amount of the potential
settlement  obligations thereunder.  Administrative  Agent  shall
have  the  right to accept or reject such agreement as a Facility
Foreign  Currency Exchange Agreement, such acceptance not  to  be
unreasonably withheld if such agreement satisfies the  conditions
hereof  and would not result in noncompliance with the applicable
terms   of   this   Agreement,   including   without   limitation
Section  2.1.5(a).   If  any such accepted agreement  is  entered
into,   the  applicable  FX  Lender  and  AMRESCO  shall   notify
Administrative Agent thereof, and shall provide such  information
regarding  the  final  terms  of  the  subject  Facility  Foreign
Currency   Exchange  Agreement  as  Administrative  Agent   shall
reasonably  request.  Each FX Lender shall notify  Administrative
Agent  of any termination of a Facility Foreign Currency Exchange
Agreement, or of any default or breach thereunder, or at any time
that  the  maximum  amount  of potential  settlement  obligations
related  thereto  (or  the portion of the  Facility  FX  Exposure
attributable  thereto)  exceeds or is likely  to  exceed,  or  is
otherwise  changed  from,  the  amount  previously  disclosed  to
Administrative Agent.

      (c)  At any time that an FX Lender is obligated to make any
payment   to  settle  any  Facility  Foreign  Currency   Exchange
Agreement (a "Settlement Payment"), which payment is not made by,
or  immediately  reimbursed by, AMRESCO or any  other  applicable
Borrower  or Guarantor to the applicable FX Lender, the Revolving
Lenders  agree  to  make  an Advance in Dollars  to  refund  such
Settlement Payment on demand from the FX Lender, any such Advance
to  be  made  pro rata in accordance with the Revolving  Lenders'
Commitment   Percentages,  but  limited  in   any   event,   and,
notwithstanding  anything to the contrary  expressed  or  implied
herein,  for each Revolving Lender, to an amount that  would  not
exceed  such  Revolving  Lender's Commitment  Percentage  of  the
Facility  FX  Exposure or, taken together with all other  amounts
outstanding  under  such  Revolving Lender's  Commitment  Amount,
would  not  in any case exceed such Revolving Lender's Commitment
Amount.   Any  such Advance shall thereafter be reflected  as  an
Advance  under  the Revolving Credit Facility on  the  books  and
records of the Administrative Agent.  Each Revolving Lender shall
fund its respective Commitment Percentage of each such Advance as
required  to  reimburse  any  Settlement  Payment  made  by   the
applicable  FX Lender upon demand by such FX Lender,  but  in  no
event  later than 2:00 p.m. (Dallas time) on the next  succeeding
Business  Day  after such demand is made.  No Revolving  Lender's
obligation  to  fund its respective Commitment Percentage  of  an
Advance  to  reimburse a Settlement Payment shall be affected  by
any  other  Revolving  Lender's failure to  fund  its  Commitment
Percentage  thereof, nor shall any Revolving Lender's  Commitment
Percentage  be increased as a result of any such failure  of  any
other Revolving Lender to fund its Commitment Percentage.

          (d)  Borrowers shall pay to the applicable FX Lender on
demand the amount of any Settlement Payment to the extent amounts
received  from  the  Revolving  Lenders  are  not  sufficient  to
reimburse in full the Settlement Payment requested or required to
be refunded.

          (e)  Each Revolving Lender acknowledges and agrees that
its  obligation  to fund its portion of an Advance  to  reimburse
amounts advanced by an FX Lender to make a Settlement Payment  in
accordance  with the terms of this Section 2.1.5 is absolute  and
unconditional and shall not be affected by any noncompliance with
any  applicable condition set forth in Article IV  or  any  other
circumstance  whatsoever (including without limitation  repayment
of  such  Settlement Payment by Borrowers pursuant to  the  above
paragraph if the same is required to be refunded to Borrowers  by
such FX Lender); provided, that if prior to the refunding of  any
outstanding  Settlement Payment pursuant to this  Section  2.1.5,
one  of the events described in Section 8.1.6 or 8.1.7 shall have
occurred,  each Revolving Lender will, on the date the applicable
Advance under the Revolving Credit Facility would have been made,
purchase  an  undivided participating interest in the  Settlement
Payment(s) to be reimbursed  in an amount equal to the portion of
such  Advance it would have made but for the provisions  of  this
Section   2.1.5(e).   Each  Revolving  Lender  will   immediately
transfer  to  the  applicable  FX  Lender,  in  Dollars  and   in
immediately available funds, the amount of its participation  and
upon  receipt  thereof the applicable FX Lender will  deliver  to
such Revolving Lender a certificate evidencing such participation
dated the date of receipt of such funds and for such amount.   In
the  event  that any Revolving Lender fails to make available  to
Administrative Agent for the account of the applicable FX  Lender
the  amount of any Settlement Payment(s) as provided herein,  the
applicable FX Lender shall be entitled to recover such amount  on
demand  from such Revolving Lender together with interest thereon
at a rate per annum equal to the lesser of (i) the Maximum Lawful
Rate or (ii) the Federal Funds Effective Rate.

     Section 2.2.   Required Payments; Termination .

           Section  2.2.1.  Scheduled  Term  Loan  Payments.   In
addition  to  the  interest payments required  by  Section  2.19,
Borrowers  shall  make the following principal payments  on  Term
Loan  A and Term Loan B (to be allocated between them as provided
in Section 2.7(b)):

           (a)  On or before the earlier of February 29, 2000, or
the Lend Lease Closing Date, a principal payment in the amount of
the Lend Lease Required Payment.  The Lend Lease Required Payment
shall  come from Lend Lease Net Proceeds, and if Lend  Lease  Net
Proceeds are not sufficient to make such payment (or there are no
Lend Lease Net Proceeds because the Lend Lease Agreement has  not
closed  or has terminated), from proceeds of Collateral or  other
funds  of the Borrowers which shall not in any event include  any
proceeds  from the sale of Assigned Loans in the Structured  Real
Estate  Portfolio  or funds from an Advance under  the  Revolving
Credit Facility.

           (b)   Within three (3) Business Days after it  can  be
determined that all or any portion of the funds in the Lend Lease
Post  Closing Adjustment Account will not be required to be  paid
by  the  sellers to the purchaser under the Lend Lease  Agreement
pursuant to Section 3.3 thereof, a principal payment in an amount
equal to 95% (or 85% if neither the SREP Sale Date nor Structured
Real  Estate Asset Sales for all or substantially all of the SREP
Assets have occurred, with such 10% difference being included  in
the  Lend  Lease  Deferral) of the amount of  such  funds,  which
payment  may  be made from the funds initially deposited  in  the
Lend  Lease Post-Closing Adjustment Account, less any funds  from
such  account  that  have  been paid, or  are  still  subject  to
disagreement  as  to whether such funds are to be  paid,  to  the
purchasers  under  the Lend Lease Agreement pursuant  to  and  as
defined  in  Section 3.3 thereof.  Borrowers agree to furnish  to
Administrative Agent such information as Administrative Agent may
reasonably request from time to time regarding the status of  the
post-closing  adjustments  under  the  Lend  Lease  Agreement  to
confirm  the time and amount of any payments required under  this
Section  2.2.1(b).  As used above in this Section  2.2.1(b)  (and
specifically  referred to in other Sections of  this  Agreement),
"substantially  all"  means (i) SREP  Assets  that  have  in  the
aggregate,  for  (A)  Assigned  Loans,  an  aggregate   principal
balance, and (B) for other SREP Assets, an aggregate book  value,
with  a  combined total exceeding 80% of the sum of the aggregate
principal balance of all Assigned Loans and aggregate book  value
of the other SREP Assets in the Structured Real Estate Portfolio,
as  shown on Schedule 14, or (ii) if fewer, the SREP Assets  sold
in the SREP-Ocwen Sale.

           (c)   On  any SREP Required Payment Date, a  principal
payment  in  the amount of the applicable SREP Required  Payment,
less (i) the balance of any SREP Additional Fundings that is paid
on  the Revolving Credit Facility (it being understood and agreed
that  the  net balance of all SREP Additional Fundings  shall  be
paid  before application to the Term Loan Facilities of any  SREP
Required Payment or other payment from a SREP Asset), and (ii) if
the Lend Lease Closing Date has not occurred, the amount, if any,
necessary  to  make any payment required on the Revolving  Credit
Facility  due  to  the reduction of the Revolving  Commitment  as
provided  in  Section 2.17.1(b) (it being understood  and  agreed
that  the  reduction  to  the Revolving  Commitment  pursuant  to
Section 2.17.1(b) shall be taken into account in determining  the
Balancing  Ratio for allocation of the payment to the Lenders  on
the SREP Sale Date); provided that in the case that the SREP Sale
Date (or the completion of Structured Real Estate Asset Sales for
all  or substantially all [as defined in Section 2.2.1(b)] of the
SREP  Assets)  occurs  after  the Lend  Lease  Closing  Date,  an
additional  principal payment in the amount  of  the  Lend  Lease
Deferral shall be made.

          (d)  On any day that a principal payment is made on the
Lend  Lease Holdback Note, an amount equal to 95% of such payment
(or  85%  of  such  payment if neither the  SREP  Sale  Date  nor
Structured  Real Estate Asset Sales for all or substantially  all
[as  defined  in  Section  2.2.1(b)]  of  the  SREP  Assets  have
occurred,  with such 10% difference being included  in  the  Lend
Lease Deferral).

           (e)   On or before March 30, 2000, a principal payment
in  the  amount of $70,000,000 less the aggregate amount  of  all
SREP  Required Payments made prior to such date and all principal
payments  on  the Term Loan Facilities made prior  to  such  date
pursuant  to Sections 2.2.2 or 2.2.4 or otherwise, but  expressly
excluding  all payments made pursuant to Sections 2.2.1(a),  (b),
and (d).

           (f)  The entire outstanding principal balance of,  and
all accrued interest on, and any other amounts owing with respect
to,  Term Loan A and Term Loan B shall be due and payable in full
on the Term Loan Facilities Maturity Date.

           Section 2.2.2. Other Term Facility Mandatory Principal
Payments.  In  addition  to the principal payments  provided  for
above  in  Section  2.2.1 and below in Section  2.2.4,  Borrowers
shall  pay, or cause to be paid, to Administrative Agent for  the
account of the Term Lenders proceeds from the sales of assets  as
set  forth  in  Section  7.13 and as  required  for  releases  of
Collateral  pursuant to Section 5.7 (without duplication  of  the
amounts  required to be paid thereunder), and all other  proceeds
paid  or  realized  on  assets  of  any  Borrower,  Guarantor  or
Subsidiary, but excluding proceeds from the sale of, or otherwise
paid  or  realized  on,  assets of the  Subsidiaries  engaged  in
Continuing Operations in the ordinary course of business and  for
which the net investment value thereof on the books of AMRESCO is
greater than $0, and as otherwise provided in the Specified Asset
Release Agreement.

           Section  2.2.3.  Revolving Credit  Facility  Payments;
Termination.   (a) On any SREP Required Payment  Date,  Borrowers
shall  pay  to  Administrative Agent,  for  the  benefit  of  the
Revolving Lenders, an amount equal to the unpaid balance  of  the
SREP  Additional  Fundings as shown on the most recent  Borrowing
Base  Certificate  (but limited to the amount of  the  applicable
SREP  Required Payment, if less) , which amount shall be  applied
to  the  outstanding principal amount of the Advances  under  the
Revolving Credit Facility.

           (b)  Upon the sale of the assets of, or the stock  of,
the  Subsidiaries  whose business is AMRESCO's line  of  business
referred  to  as  its "Builders Group", Borrowers  shall  pay  to
Administrative  Agent, for the account of the Revolving  Lenders,
on  the  closing date of such sale, the amount, if any, by  which
the outstanding principal balance of all Advances as of such date
exceeds  the  Revolving Commitment after taking into account  the
$5,000,000  permanent reduction to the Revolving Credit  Facility
required under Section 2.17.1(a), any such payment to be  applied
to such outstanding Advances.

           (c)   If  the  SREP  Sale Date  with  respect  to  the
Structured  Real Estate Portfolio Sale occurs prior to  the  Lend
Lease  Closing Date, Borrowers shall pay to Administrative Agent,
for  the account of the Revolving Lenders on the SREP Sale  Date,
the amount, if any, by which the outstanding principal balance of
all  Advances  as  of such date exceeds the Revolving  Commitment
after  taking  into  account  the $10,000,000  reduction  to  the
Revolving  Credit Facility required under Section 2.17.1(b),  any
such payment to be applied to such outstanding Advances.

            (d)    On  the  Revolving  Credit  Termination  Date,
Borrowers  shall pay to Administrative Agent for the  account  of
each  Revolving Lender, the outstanding principal balance of  the
Advances  under the Revolving Credit Facility, together with  all
accrued  but  unpaid interest, and any unpaid fees  and  expenses
relating  thereto.  Any outstanding Advances under the  Revolving
Credit Facility and all other unpaid Obligations relating thereto
shall  be  paid in full by the Borrowers on the Revolving  Credit
Termination  Date,  subject to Section  2.1(b)  with  respect  to
outstanding Facility Letter of Credit Exposure at such time.

           Section  2.2.4.  Borrowing Base  Deficiency  Payments.
(a)  If,  prior to the Transition Date, on any date required  for
delivery   of   the  Borrowing  Base  Certificate   pursuant   to
Section  7.1(ix), the Borrowing Base Coverage  Ratio  is  not  in
compliance with the requirement of Section 7.24.4(a) with respect
to   all  the  Credit  Facilities  (as  calculated  pursuant   to
Schedule 10), Borrowers shall within two (2) Business Days  after
such  date  make  a  principal payment  in  the  amount  of  such
deficiency to Administrative Agent, which amount shall be applied
to  the  Revolving Credit Facility, to the extent such deficiency
is   attributable  to  assets  of  the  Subsidiaries  engaged  in
Continuing  Operations, and otherwise to the Term Loan Facilities
to be applied as provided in Section 2.7(b).

           (b)   If,  after  the Transition  Date,  on  any  date
required  for delivery of the Borrowing Base Certificate pursuant
to  Section 7.1(ix), the Borrowing Base Coverage Ratio is not  in
compliance with the requirement of Section 7.24.4(b) with respect
to   the  Revolving  Credit  Facility  (calculated  pursuant   to
Schedule 11), Borrowers shall within two (2) Business Days  after
such  date  make  a  principal payment  in  the  amount  of  such
deficiency to Administrative Agent, which amount shall be applied
to the Revolving Credit Facility.

           (c)   If,  after  the Transition  Date,  on  any  date
required  for delivery of the Borrowing Base Certificate pursuant
to  Section 7.1(ix), the Borrowing Base Coverage Ratio is not  in
compliance with the requirements of Sections 7.24.4(c) or (d), as
applicable, with respect  to the Term Loan Facilities (calculated
pursuant to Schedule 12), Borrowers shall within two (2) Business
Days  after such date make a principal payment in the  amount  of
such  deficiency to Administrative Agent, which amount  shall  be
applied   to   the   Term   Loan  Facilities   as   provided   in
Section 2.7(b).

      Section  2.3.    Ratable Loans.   Each  Advance  under  the
Revolving Credit Facility shall consist of Loans made in  Dollars
from  all the Revolving Lenders ratably in accordance with  their
respective Commitment Percentages.

     Section 2.4.   INTENTIONALLY OMITTED.

      Section  2.5.   Commitment Fee; Facility Letter  of  Credit
Fees; Facility FX Fees.

           Section  2.5.1.  Commitment Fee.  The Borrowers  shall
pay  to  Administrative Agent for the account  of  the  Revolving
Lenders a nonrefundable commitment fee (the "Commitment Fee")  in
an  amount  equal to the product of (a) the applicable per  annum
percentage  rate in effect as  the Applicable Fee  Rate  for  the
Commitment  Fee as shown on the Pricing Schedule,  calculated  as
provided  in  Section  2.20, times (b) the average  daily  unused
portion  of  the  Revolving  Commitment  (after  adjustment   for
Facility Letter of Credit Exposure and Facility FX Exposure,  but
not  including  any reduction for Swingline Advances),  from  the
date  hereof  to  and including the Revolving Credit  Termination
Date.   The Commitment Fee is to be paid for the account of  each
Revolving  Lender  in accordance with its Commitment  Percentage,
and  shall  be  payable on each Payment Date  for  the  preceding
calendar month, and on the Revolving Credit Termination Date.

           Section  2.5.2. Facility Letter of Credit  Fees.   The
Borrowers  shall  pay to the Issuing Lender a  letter  of  credit
fronting  fee  for each Facility Letter of Credit, in  an  amount
agreed  to  between  AMRESCO and the Issuing Lender  by  separate
agreement,  in  consideration of the issuance  of  such  Facility
Letter   of  Credit.   In  addition,  Borrowers  shall   pay   to
Administrative Agent for the account of the Revolving  Lenders  a
letter of credit fee (the "Facility Letter of Credit Fee")  as  a
condition  to the issuance of any Facility Letter of  Credit  (or
extension thereof) in an amount equal to the applicable per annum
percentage rate then in effect as the Applicable Fee Rate for the
Facility  Letter  of  Credit  Fee,  calculated  as  provided   in
Section  2.20,  times the maximum stated amount of  the  Facility
Letter  of Credit so issued.  The Facility Letter of Credit  Fee,
shall  be  paid   for  the account of each  Revolving  Lender  in
accordance with its Commitment Percentage and shall be payable on
the  date of issuance of the applicable Facility Letter of Credit
(and if extended, on the date of extension).

     Section 2.5.3.  Facility FX Fee.  The Borrowers shall pay to
Administrative Agent for the account of the Revolving  Lenders  a
fee (the "Facility FX Fee") in an amount equal to the product  of
(a)  the  applicable per annum percentage rate in effect  as  the
Applicable  Fee  Rate  for the Facility  FX  Fee,  calculated  as
provided in Section 2.20, times (b) the average daily FX Exposure
in effect on each day from day to day.  The Facility FX Fee is to
be  paid  for the account of each Revolving Lender in  accordance
with  its  Commitment Percentage, and shall be  payable  on  each
Payment  Date  for  the  preceding calendar  month,  and  on  the
Revolving Credit Termination Date.

      Section  2.6.    Minimum  Amount of  Each  Advance.    Each
Advance  shall  be  in the minimum amount of  $1,000,000  and  in
multiples  of  $100,000 if in excess thereof; provided,  however,
that  any  Advance  may be in the amount of the unused  Revolving
Commitment.

      Section  2.7.   Optional Principal Payments; Allocation  of
Payments.   (a) The Borrowers may from time to time pay,  without
penalty  or premium, all outstanding Advances and the outstanding
principal  balance  of Term Loan A and Term  Loan  B,  or,  in  a
minimum  aggregate amount of $1,000,000 or any integral  multiple
of  $100,000  in  excess thereof, any portion of the  outstanding
Advances  or  the  outstanding  principal  under  the  Term  Loan
Facilities  upon notice to Administrative Agent  prior  to  10:00
a.m. (Dallas, Texas time) on the date on which such prepayment is
to  be  made, subject to Section 2.7(b). All voluntary  principal
prepayments  on Term Loan A and Term Loan B shall be  applied  to
principal due in the inverse order of maturity.

           (b)  Any voluntary payment on Term Loan A or Term Loan
B under this Section 2.7, and any mandatory payments on Term Loan
A  or  Term  Loan  B under Sections 2.2.1, 2.2.2,  or  2.2.4,  or
otherwise, shall be allocated between Term Loan A and Term Loan B
(notwithstanding any contrary designation by Borrowers) such that
the  Balancing  Ratio  prior to such  payment  is  equal  to  the
Balancing  Ratio  after giving effect to such  payment.   To  the
extent that the outstanding balance of Term Loan B is $0.00,  any
principal  payments which would otherwise be  allocated  to  Term
Loan  B pursuant to the preceding sentence shall instead be  used
to pay down the Revolving Credit Facility (and such amounts shall
be  a  permanent  reduction  in the  Revolving  Commitment).   In
addition,  any reduction in the Revolving Commitment required  or
permitted  under  Section  2.17 or otherwise  required  hereunder
shall be accompanied by a payment (a "Balancing Payment") on Term
Loan A in an amount sufficient to cause the Balancing Ratio prior
to  such reduction and payment to be equal to the Balancing Ratio
after  giving effect to such reduction and payment.  Payments  on
Term  Loan  A and Term Loan B shall be allocated among  the  Term
Loan  A  Lenders and among the Term Loan B Lenders in  accordance
with  their  respective Term Loan A Percentages and Term  Loan  B
Percentages.

      Section  2.8.   Method of Borrowing.    AMRESCO shall  give
the   Administrative  Agent  irrevocable  notice  (a   "Borrowing
Notice") in the form attached hereto as Exhibit A not later  than
10:00  a.m. (Dallas, Texas time) on the Business Day that is  the
Borrowing   Date  for  each  Advance  requested   by   Borrowers,
specifying:

          (a)  the Borrowing Date, which shall be a Business
               Day, of such Advance;

          (b)  the aggregate amount of such Advance; and

          (c)  the purpose of such Advance.

Not  later than noon (Dallas, Texas time) on each Borrowing Date,
each  Revolving  Lender (or the Swingline Lender, if  applicable)
shall  make  available its pro rata portion of  such  Advance  in
accordance with its Commitment Percentage in Dollars and in funds
immediately  available  in Dallas, Texas  to  the  Administrative
Agent  at  its  address  specified in  Schedule  1.   Unless  the
Administrative  Agent  determines that any  applicable  condition
specified  in  Article IV has not been satisfied,  Administrative
Agent  will make the funds so received from the Revolving Lenders
or  Swingline Lender, as applicable, available to Borrowers prior
to  2:00 p.m., Dallas, Texas time on the requested Borrowing Date
by  (i)  transferring such amounts by wire transfer  pursuant  to
AMRESCO's   instructions,  or  (ii)  in  the  absence   of   such
instructions, crediting such amounts to the operating account  of
AMRESCO maintained with Administrative Agent.

     Section 2.9.   INTENTIONALLY OMITTED.

     Section 2.10.  INTENTIONALLY OMITTED .

     Section 2.11.  Interest Rate.   Interest shall accrue on the
outstanding principal balance of all Loans under all  the  Credit
Facilities  for each day at a rate per annum equal to the  lesser
of  (a)  the  Applicable  Rate  for  such  day  (subject  to  the
provisions  of  Section 11.7), and (b) the Maximum  Lawful  Rate;
provided, however, if at any time the Applicable Rate exceeds the
Maximum  Lawful  Rate,  resulting in  the  charging  of  interest
hereunder  to  be limited to the Maximum Lawful  Rate,  then  any
subsequent reduction in the Applicable Rate shall not reduce  the
rate  of  interest below the Maximum Lawful Rate until the  total
amount  of interest accrued on the indebtedness hereunder  equals
the   amount  of  interest  which  would  have  accrued  on  such
indebtedness  if  the Applicable Rate had at all  times  been  in
effect.   Changes  in  the  Applicable  Rate  will  take   effect
simultaneously with each change in the Corporate Base  Rate,  and
with  each  increase in the Applicable Base Rate  Margin  as  set
forth in the Pricing Schedule.

        Section    2.12.    Rates   Applicable   After   Default.
Notwithstanding  anything  herein to  the  contrary,  during  the
continuance of a Default or Event of Default the Required Lenders
may,  at  their  option, by notice from Administrative  Agent  to
AMRESCO  (which  notice  may be revoked  at  the  option  of  the
Required    Lenders    notwithstanding    the    provisions    of
Section 11.3(a)(i) requiring unanimous consent of the Lenders for
reductions  in  interest  rates), declare  that  the  outstanding
principal balance of all Loans shall bear interest at a rate  per
annum  equal  to  the  Default Rate; provided  that,  during  the
continuance of an Event of Default under Section 8.1.6 or  8.1.7,
the  Default  Rate shall be applicable to all Loans  without  any
election or action on the part of the Administrative Agent or any
Lender.

     Section 2.13.  Method of Payment.   All payments of Advances
under the Revolving Credit Facility and principal payments on the
Term  Loan Facilities, and all payments of interest thereon,  and
payment  of all other Obligations shall be made in Dollars.   All
payments  of  the  Obligations hereunder shall be  made,  without
setoff,  deduction,  or  counterclaim, in  immediately  available
funds to the Administrative Agent at (except as set forth in  the
next  sentence) the Administrative Agent's address  specified  in
Schedule  1,  or  at  any  other  Lending  Installation  of   the
Administrative  Agent specified in writing by the  Administrative
Agent  to AMRESCO, by noon (local time) on the date when due  and
shall  be  applied  by the Administrative Agent  ratably  to  the
Lenders  entitled  thereto.   Each  payment  delivered   to   the
Administrative  Agent  for the account of  any  Lender  shall  be
delivered promptly by the Administrative Agent to such Lender  at
such Lender's address specified pursuant to Schedule 1 or at  any
Lending  Installation  or other address  specified  in  a  notice
received  by  the  Administrative Agent from  such  Lender.   The
Administrative Agent is hereby authorized to charge  any  account
of  any  Borrower maintained with Bank of America or any  of  its
Affiliates for each payment of principal, interest and fees as it
becomes due hereunder.

      Section  2.14.   Continuation of  Contract.    Neither  the
implementation  nor  change  in  currency  as  a  result  of  the
commencement of the third stage of European Economic and Monetary
Union  nor  any  economic consequences resulting therefrom  shall
(i)  give  rise  to any right to terminate prematurely,  contest,
cancel,  rescind, alter, modify or renegotiate the provisions  of
this Agreement or (ii) discharge, excuse or otherwise affect  the
performance  of any obligations of any Borrower or any  Guarantor
under this Agreement or the other Loan Documents.

      Section  2.15.  Evidence of Indebtedness.    (a)  Borrowers
shall execute and deliver to each Term Loan A Lender a Term  Loan
A Note payable to the order of such Lender, in the amount of such
Lender's Term Loan A Percentage of Term Loan A.

           (b)   Borrowers shall execute and deliver to each Term
Loan  B  Lender a Term Loan B Note payable to the order  of  such
Lender, in the amount of such Lender's Term Loan B Percentage  of
Term Loan B.

           (c)   Borrowers  shall execute  and  deliver  to  each
Revolving  Lender a Revolving Note payable to the order  of  such
Lender, in the amount of such Lender's Commitment Amount.

           (d)   Borrowers shall execute and deliver to Swingline
Lender  the  Swingline  Note payable to the  order  of  Swingline
Lender, in the amount of the Swingline Commitment.

     Section 2.16.  Method of Issuing Facility Letters of Credit.
(a)  Not less than three (3) Business Days prior to the requested
date  of issuance of any Facility Letter of Credit, AMRESCO shall
deliver  to  Administrative Agent a Borrowing  Notice  and  shall
execute and deliver to the Issuing Lender the customary letter of
credit application and agreement used by the Issuing Lender  (the
"LOC Application").  Nothing in this Agreement shall prohibit the
Issuing  Lender  from modifying the form of  LOC  Application  in
effect  from time to time in connection with the issuance of  any
Facility  Letter  of Credit.  In the event of a  direct  conflict
between the provisions of the LOC Application and this Agreement,
the  provisions  of this Agreement shall govern.   Each  Facility
Letter  of Credit shall be a standby letter of credit only issued
on behalf of a Borrower or a Guarantor, and shall comply with all
requirements  for  Facility  Letters  of  Credit  set  forth   in
Section  2.1.1(b).  Upon satisfaction of the conditions precedent
to Advances set forth in Sections 4.2 and 4.3, and subject to the
other  terms and conditions of this Agreement, the Issuing Lender
shall  issue  the  requested Facility Letter of  Credit  for  the
account  of such Borrower or Guarantor within three (3)  Business
Days from receipt by the Issuing Lender of the fully-executed LOC
Application  (so  long as the requested terms  of  such  Facility
Letter of Credit are acceptable to the Issuing Lender in its sole
discretion).

           (b)   Immediately upon the issuance of  each  Facility
Letter of Credit, the Issuing Lender shall be deemed to have sold
and  transferred  to  each Revolving Lender, and  each  Revolving
Lender  shall be deemed to have purchased and received  from  the
Issuing  Lender, in each case irrevocably and without any further
action  by any party, an undivided interest and participation  in
such  Facility Letter of Credit, each drawing thereunder and  the
obligations of any Borrower or Guarantor under this Agreement  in
respect  thereof in an amount equal to the product  of  (i)  such
Revolving  Lender's Commitment Percentage times (ii) the  maximum
amount available to be drawn under such Facility Letter of Credit
(assuming compliance with all conditions to drawing).  Within the
limits of this Agreement, and subject to the limits set forth  in
Section  2.1.1(b),  AMRESCO  may through  an  Authorized  Officer
request  the  issuance of Facility Letters of Credit  under  this
Section   2.16,  repay  any  Advances  resulting  from   drawings
thereunder pursuant to this Section 2.16 and request the issuance
of additional Facility Letters of Credit under this Section 2.16.

           (c)   Borrowers unconditionally agree to  pay  to  the
Issuing  Lender  (and the LOC Application shall so  provide)  all
amounts  drawn under and payable to Issuing Lender  under  or  in
connection  with  any Facility Letter of Credit immediately  when
due  (and  in  any event shall reimburse any Issuing  Lender  for
drawings  under a Facility Letter of Credit no later  than  10:00
a.m.  on  the Business Day after payment by the Issuing  Lender),
irrespective of any claim, set-off, defense or other right  which
any  Borrower,  any  Guarantor, or any other  Subsidiary  or  any
other  account  party  may have at any time against  the  Issuing
Lender or any other Person, including without limitation, (i) any
lack  of validity or enforceability of this Agreement or  any  of
the  other  Loan  Documents; (ii) the  existence  of  any  claim,
setoff, defense or other right which any Borrower, any Guarantor,
or  any  Subsidiary  may have at any time against  a  beneficiary
named  in  a Facility Letter of Credit or any transferee  of  any
Facility  Letter  of  Credit (or any Person  for  whom  any  such
transferee  may be acting), the Administrative Agent, the Issuing
Lender,  any  Lender, or any other Person, whether in  connection
with   this  Agreement,  any  Facility  Letter  of  Credit,   the
transactions  contemplated  herein or any  unrelated  transaction
(including,  without  limitation,   any  underlying  transactions
between   Borrowers,  Guarantors,  or  any  Subsidiary  and   the
beneficiary  named in any Facility Letter of Credit);  (iii)  any
draft,  certificate  or any other document  presented  under  any
Facility  Letter  of  Credit proving to  be  forged,  fraudulent,
invalid  or insufficient in any respect or any statement  therein
being untrue or inaccurate in any respect; (iv) the surrender  or
impairment  of any security for the performance or observance  of
any  of  the  terms  of  any of the Loan Documents;  or  (v)  the
occurrence of any Default or Event of Default.  However,  nothing
in  this  Agreement constitutes a waiver of Borrowers' rights  to
assert  independently of its reimbursement obligation  any  claim
against  Issuing  Lender  for  its gross  negligence  or  willful
misconduct in connection with its funding any Facility Letter  of
Credit.   If  Borrowers fail to reimburse the Issuing  Lender  as
above  required,  the payment by the Issuing Lender  of  a  draft
drawn  under  any Facility Letter of Credit shall constitute  for
all  purposes of this Agreement the making by the Issuing  Lender
of  an  Advance,  in Dollars, which shall bear  interest  at  the
Applicable Rate then in effect, in the amount of such draft  (but
without  any  requirement for compliance with the conditions  set
forth  in Article IV hereof).  In the event that a drawing  under
any  Facility Letter of Credit is not reimbursed by Borrowers  by
10:00  a.m. (Dallas, Texas time) on the first Business Day  after
such   drawing,   the  Issuing  Lender  shall   promptly   notify
Administrative  Agent and each Revolving Lender.   The  Revolving
Lenders   shall,  on  the  first  Business  Day  following   such
notification, make an Advance in Dollars, which shall be used  to
repay the Advance made by the Issuing Lender with respect to such
Facility  Letter  of  Credit  (but without  any  requirement  for
compliance   with  the  applicable  conditions   set   forth   in
Article  IV)  by  each Revolving Lender paying to  Administrative
Agent  for the account of the Issuing Lender, in same day  funds,
an  amount equal to such Revolving Lender's Commitment Percentage
of  the  amount of such Advance.  In the event that any Revolving
Lender  fails to make available to Administrative Agent  for  the
account  of  the  Issuing Lender its share of such  Advance,  the
Issuing Lender shall be entitled to recover such amount on demand
from  such Revolving Lender together with interest thereon  at  a
rate per annum equal to the lesser of (i) the Maximum Lawful Rate
or (ii) the Federal Funds Effective Rate.

     Section 2.17.  Reductions to Revolving Commitment.

           Section  2.17.1 Mandatory Reductions.   The  Revolving
Commitment shall be automatically reduced (a) by $5,000,000  upon
the  sale of all or substantially all of the assets of (exclusive
of  loan assets in the ordinary course of business), or the stock
of, the Subsidiaries whose business is AMRESCO's line of business
referred  to as its "Builder's Group", and (b) by $10,000,000  on
the  SREP Sale Date, if such date occurs on a date prior  to  the
Lend  Lease Closing Date.  Certain payments made on the Revolving
Credit  Facility  pursuant  to  Section  2.7(b)  shall  effect  a
permanent  reduction  to  the Revolving  Commitment  as  provided
therein.

           Section  2.17.2  Voluntary Reductions.   AMRESCO  may,
subject   to any Balancing Payment required under Section 2.7(b),
permanently reduce the Revolving Commitment  in whole, or in part
ratably  among  the  Revolving Lenders in integral  multiples  of
$1,000,000, upon at least five (5) Business Days' written  notice
to Administrative Agent, which notice shall specify the amount of
any  such  reduction, provided, however, that the amount  of  the
Revolving  Commitment  may  not be reduced  below  the  aggregate
principal  Dollar  Amount of the outstanding Advances  under  the
Revolving Credit Facility, all Swingline Advances, the amount  of
the  Facility  Letter of Credit Exposure and the  amount  of  the
Facility  FX  Exposure.   All accrued commitment  fees  shall  be
payable  on  the  effective  date  of  any  termination  of   the
obligations of the Revolving Lenders to make Advances hereunder.

      Section  2.18.  Telephonic Notices.   The Borrowers  hereby
authorize  the  Lenders  and  the Administrative  Agent  to  make
Advances  and to transfer funds based on telephonic notices  made
by  any  person or persons the Administrative Agent or any Lender
in  good  faith  believes to be acting on behalf of  AMRESCO,  it
being understood that the foregoing authorization is specifically
intended  to  allow Borrowing Notices to be given telephonically.
AMRESCO agrees to deliver promptly to the Administrative Agent  a
written confirmation in the form of a Borrowing Notice signed  by
an  Authorized  Officer,  of  each telephonic  notice.   If  such
written  confirmation differs in any material  respect  from  the
action  taken  by the Administrative Agent and the  Lenders,  the
records of the Administrative Agent and the Lenders shall  govern
absent manifest error.

     Section 2.19.  Interest Payment Dates.   (a) Accrued, unpaid
interest  on  the  outstanding principal  balance  of  all  Loans
outstanding  under all the Credit Facilities  shall  be  due  and
payable on each Payment Date, commencing with the first such date
to  occur after the date hereof.  All accrued and unpaid interest
shall  be  due  and  payable at maturity.  All interest  accruing
after  maturity,  or at any time accruing at  the  Default  Rate,
shall be due and payable upon demand.

      (b)  Notwithstanding anything to the contrary herein or  in
the  Notes or any other Loan Document, in the event that  at  any
time  the  Eurocurrency  Comparable Rate as  determined  for  any
calendar month is higher than the Applicable Rate on any  one  or
more  days  during such calendar month, Borrowers  shall  pay  to
Administrative Agent, for the pro rata benefit of the Lenders, on
the respective Payment Date an amount equal to difference between
(i) the amount that would have been calculated as interest on the
Loans   had  the  Applicable  Rate  been  equal  to  the   higher
Eurocurrency Comparable Rate on such day(s), and (ii) the  amount
of interest payable as calculated pursuant to the Applicable Rate
on  such  day(s)  (each  such payment,  an  "Interest  Deficiency
Payment").

     Section 2.20.  Calculation of Interest and Fees.   Interest,
the  Commitment Fee and the Facility FX Fee shall  be  calculated
for  actual  days  elapsed on the basis of a 360-day  year.   The
Facility Letter of Credit Fee shall be calculated for the  actual
number  of days in the term of the applicable Facility Letter  of
Credit on the basis of a 360-day year.  Interest shall be payable
for the day an Advance is made but not for the day of any payment
on the amount paid on a Loan if payment is received prior to noon
(local  time)  at  the  place  of payment.   If  any  payment  of
principal  of  or interest on a Loan shall become due  on  a  day
which  is not a Business Day, such payment shall be made  on  the
next  succeeding  Business Day and, in the case  of  a  principal
payment,  such extension of time shall be included  in  computing
interest in connection with such payment.

      Section  2.21.   Notification of Advances, Interest  Rates,
Prepayments  and Commitment Reductions.  Promptly  after  receipt
thereof,  the  Administrative Agent will  notify  each  Revolving
Lender  of  the  contents of each Revolving Commitment  reduction
notice  and  each  Borrowing Notice, and will  notify  each  Term
Lender  of  any prepayment notice with respect to the  Term  Loan
Facilities received by Administrative Agent hereunder.

      Section  2.22.  Lending Installations.   Each  Lender  will
book its Loans at the appropriate Lending Installation listed  on
Schedule 3 or such other Lending Installation designated by  such
Lender   in   accordance  with  the  final   sentence   of   this
Section  2.22.  All terms of this Agreement shall  apply  to  any
such  Lending Installation and the Loans and the Notes  shall  be
deemed  held  by each Lender for the benefit of any such  Lending
Installation.   Each  Lender  may,  by  written  notice  to   the
Administrative Agent and AMRESCO in accordance with Section 11.2,
designate replacement or additional Lending Installations through
which  Loans  will  be  made by it and  for  whose  account  Loan
payments are to be made.

      Section  2.23.   Non-Receipt of Funds by the Administrative
Agent.    Unless AMRESCO or a Revolving Lender, as the  case  may
be,  notifies the Administrative Agent prior to the date on which
the  Borrowers  or  such  Revolving  Lender,  as  applicable,  is
scheduled to make payment to the Administrative Agent of  (a)  in
the  case  of a Revolving Lender, the proceeds of an  Advance  or
other  amount due from a Lender hereunder, or (b) in the case  of
the  Borrowers, a payment of principal, interest or fees  to  the
Administrative  Agent  for  the  account  of  the  Lenders,  that
Borrowers or such Revolving Lender, as applicable, do not  intend
to  make  such payment, the Administrative Agent may assume  that
such  payment has been made.  Administrative Agent may, but shall
not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption.  If such
Revolving Lender or the Borrowers, as the case may be,  have  not
in  fact  made  such  payment  to the Administrative  Agent,  the
recipient  of such payment shall, on demand by the Administrative
Agent,  repay  to  the Administrative Agent the  amount  so  made
available together with interest thereon in respect of  each  day
during the period commencing on the date such amount was so  made
available  by  the  Administrative  Agent  until  the  date   the
Administrative  Agent recovers such amount at a  rate  per  annum
equal  to  (i) in the case of payment by a Revolving Lender,  the
Federal  Funds  Effective Rate for such day for the  first  three
days and, thereafter, the Applicable Rate or (ii) in the case  of
payment  by  the Borrowers, the Applicable Rate or, if  and  when
applicable, the Default Rate.

     Section 2.24.  INTENTIONALLY OMITTED.

      Section 2.25.  Judgment Currency.   If for the purposes  of
obtaining judgment in any court it is necessary to convert a  sum
due  from any Borrower or any Guarantor hereunder in the currency
expressed  to  be payable herein (the "specified currency")  into
another currency, the parties hereto agree, to the fullest extent
that  they may effectively do so, that the rate of exchange  used
shall  be  that  at  which  in  accordance  with  normal  banking
procedures the Administrative Agent could purchase the  specified
currency  with such other currency at the Administrative  Agent's
main  Dallas, Texas office on the Business Day preceding that  on
which a final, non-appealable judgment is given.  The obligations
of any Borrower or any Guarantor in respect of any sum due to any
Lender    or   the   Administrative   Agent   hereunder    shall,
notwithstanding  any  judgment  in  a  currency  other  than  the
specified currency, be discharged only to the extent that on  the
Business   Day   following  receipt  by  such   Lender   or   the
Administrative Agent (as the case may be) of any sum adjudged  to
be   so   due  in  such  other  currency  such  Lender   or   the
Administrative Agent (as the case may be) may in accordance  with
normal,  reasonable  banking procedures  purchase  the  specified
currency  with  such  other  currency.   If  the  amount  of  the
specified  currency so purchased is less than the sum  originally
due  to such Lender or the Administrative Agent, as the case  may
be,  in  the  specified currency, each Borrower  agrees,  to  the
fullest  extent  that it may effectively do  so,  as  a  separate
obligation  and notwithstanding any such judgment,  to  indemnify
such  Lender  or the Administrative Agent, as the  case  may  be,
against such loss, and if the amount of the specified currency so
purchased exceeds (a) the sum originally due to any Lender or the
Administrative  Agent,  as  the case may  be,  in  the  specified
currency  and  (b)  any amounts shared with other  Lenders  as  a
result  of  allocations  of  such excess  as  a  disproportionate
payment  to  such Lender under Section 9.18, such Lender  or  the
Administrative Agent, as the case may be, agrees  to  remit  such
excess to AMRESCO.

                           ARTICLE III

                     YIELD PROTECTION; TAXES

     Section 3.1.   INTENTIONALLY OMITTED.

     Section 3.2.   Changes in Capital Adequacy Regulations.   If
a Lender determines the amount of capital required or expected to
be  maintained by such Lender, any Lending Installation  of  such
Lender or any corporation controlling such Lender is increased as
a  result  of a Change, then, within ninety (90) days of  written
demand  by  such  Lender and delivery to AMRESCO of  a  certified
calculation  of  the amounts owed hereunder, the Borrowers  shall
pay  such  Lender  the  amount necessary to  compensate  for  any
shortfall  in the rate of return on the portion of such increased
capital  which  such  Lender determines is attributable  to  this
Agreement, its Loans or its commitment to make Advances (for  any
purpose) hereunder (after taking into account such Lender's, such
Lender's Lending Installation's or such controlling corporation's
policies as to capital adequacy).  "Change" means (i) any  change
after  the  date  of  this  Agreement in the  Risk-Based  Capital
Guidelines,  (ii)  a  Borrower shall cease to  be  a  "depository
institution  incorporated in an OECD country" within the  meaning
of the Risk-Based Capital Guidelines, or (iii) any adoption of or
change in any other law, governmental or quasi-governmental rule,
regulation,  policy,  guideline,  interpretation,  or   directive
(whether or not having the force of law) after the date  of  this
Agreement  which  affects  the  amount  of  capital  required  or
expected   to  be  maintained  by  any  Lender  or  any   Lending
Installation   or   any  corporation  controlling   any   Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based  capital
guidelines  in effect in the United States on the  date  of  this
Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside
the  United States implementing the July 1988 report of the Basle
Committee   on  Banking  Regulation  and  Supervisory   Practices
Entitled  "International Convergence of Capital Measurements  and
Capital   Standards,"  including  transition   rules,   and   any
amendments to such regulations adopted prior to the date of  this
Agreement.
     Section 3.3.   INTENTIONALLY OMITTED.

     Section 3.4.   INTENTIONALLY OMITTED.

     Section 3.5.   Taxes.   (i) All payments by the Borrowers to
or  for  the  account  of any Lender or the Administrative  Agent
hereunder or under any Note shall be made free and clear  of  and
without deduction for any and all Taxes.  If the Borrowers  shall
be  required by law to deduct any Taxes from or in respect of any
sum  payable hereunder to any Lender or the Administrative Agent,
(a) the sum payable shall be increased as necessary so that after
making  all  required deductions (including deductions applicable
to additional sums payable under this Section 3.5) such Lender or
the  Administrative Agent (as the case may be) receives an amount
equal  to  the sum it would have received had no such  deductions
been made, (b) the Borrowers shall make such deductions, (c)  the
Borrowers  shall  pay the full amount deducted  to  the  relevant
authority in accordance with applicable law and (d) the Borrowers
shall furnish to the Administrative Agent the original copy of  a
receipt  evidencing  payment thereof within 30  days  after  such
payment is made.

          (ii) In addition, the Borrowers hereby agree to pay any
present or future stamp or documentary taxes and any other excise
or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or
delivery  of,  or otherwise with respect to, this Agreement,  any
Note or any other Loan Document ("Other Taxes").

               (iii)     The Borrowers hereby agree to indemnify
the Administrative Agent and each Lender for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed on amounts payable under this Section 3.5)
paid by the Administrative Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto.  Payments due under this indemnification
shall be made within 30 days of the date the Administrative Agent
or such Lender makes demand therefor pursuant to Section 3.6.

          (iv) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof (each a
"Non-U.S. Lender") agrees that it will, not less than ten
Business Days after the date of this Agreement, (a) if such Non-
U.S. Lender is a bank within the meaning of Section 881(c)(3)(A)
(i) deliver to each of AMRESCO and the Administrative Agent two
duly completed copies of United States Internal Revenue Service
Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of AMRESCO and the Administrative
Agent a United States Internal Revenue Service Form W-8 or W-9,
as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax; or (b) if
such Non-U.S. Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and intends to claim exemption
for U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest",
deliver to each of AMRESCO and the Administrative Agent a Form W-
8, or any subsequent versions thereof or successors thereto (and,
if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code of any of
the Borrowers and is not a controlled foreign corporation related
to any of the Borrowers (within the meaning of Section 864(d)(4)
of the Code)), properly completed and duly executed by such Non-
U.S. Lender claiming complete exemption from, or a reduced rate
of, U.S. Federal withholding tax on payments of interest by the
Borrowers under this Agreement and the other Loan Documents.
Each Non-U.S. Lender further undertakes to deliver to each of
AMRESCO and the Administrative Agent (x) renewals or additional
copies of such forms (or any successor forms) on or before the
date that such forms expires or becomes obsolete, and (y) after
the occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by AMRESCO or the
Administrative Agent.  All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with respect
to it and such Lender advises AMRESCO and the Administrative
Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.

          (v)  For any period during which a Non-U.S. Lender has
failed to provide AMRESCO with an appropriate form pursuant to
clause (iv) above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to
be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes
imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv) above,
AMRESCO shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such
Taxes.

          (vi) Any Lender that is entitled to an exemption from
or reduction of withholding tax with respect to payments under
this Agreement, any Note or any other Loan Document pursuant to
the law of any relevant jurisdiction or any treaty shall deliver
to AMRESCO (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed
and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a
reduced rate.

          (vii)     If the U.S. Internal Revenue Service or any
other governmental authority of the United States or any other
country or any political subdivision thereof asserts a claim that
the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because
such Lender failed to notify the Administrative Agent of a change
in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall
indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on
amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the
Administrative Agent).  The obligations of the Lenders under this
Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.

     Section 3.6.   Lender Statements; Survival of Indemnity.
Each Lender shall deliver a written statement of such Lender to
AMRESCO (with a copy to the Administrative Agent) as to the
amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5.  Such
written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and
shall be final, conclusive and binding on the Borrowers in the
absence of manifest error.  Determination of amounts payable
under such Sections in connection with a Eurocurrency Portion
shall be calculated as though each Lender funded its Eurocurrency
Portion through the purchase of a deposit of the type currency
and maturity corresponding to the deposit used as a reference in
determining the Eurocurrency Rate applicable to such Loan,
whether in fact that is the case or not.  Unless otherwise
provided herein, the amount specified in the written statement of
any Lender shall be payable on demand after receipt by AMRESCO of
such written statement.  The obligations of the Borrowers under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.

     Section 3.7.   INTENTIONALLY OMITTED.

                           ARTICLE IV

                      CONDITIONS PRECEDENT

     Section 4.1.   Closing.    The Lenders shall not be required
to  close the transactions contemplated by this Agreement or,  as
to  the  Revolving  Lenders, make the initial Advance  hereunder,
unless  all of  the conditions set forth in this Section 4.1  are
satisfied in the determination of Administrative Agent.

     (a)  Borrowers shall have furnished to Administrative Agent,
with  sufficient copies as reasonably requested by Administrative
Agent:

            (i)   copies  of  the  articles  or  certificate   of
incorporation, or articles or certificate of limited partnership,
or  articles of organization, or other organizational  documents,
as  applicable, of each Borrower, each Guarantor and  each  other
Subsidiary  executing  the Pledge Agreement,  together  with  all
amendments  thereto,  and a certificate  of  existence  and  good
standing  for  each  Borrower,  each  Guarantor  and  each  other
Subsidiary executing the Pledge Agreement, each certified by  the
appropriate   governmental  officer,  in  the   jurisdiction   of
organization and the jurisdiction of the location, or  the  chief
executive  office  if  more  than one  location  (and  any  other
jurisdiction where the failure of any Borrower or Guarantor to be
qualified  as a foreign corporation or partnership would  have  a
material  adverse effect on the financial condition or operations
of  such  Borrower or Guarantor), of the applicable  Borrower  or
Guarantor;  and copies, certified by the Secretary  or  Assistant
Secretary  of  each Borrower and each Guarantor (or  the  general
partner of each Borrower or Guarantor which is a partnership), of
the  by-laws,   partnership agreement or operating agreement,  as
applicable,  of  each Borrower and Guarantor; provided,  however,
that Borrowers shall have until February 14, 2000 to deliver  all
such items, except for the items for or related to AMRESCO or any
other  Borrower  or  Guarantor  for  which  Administrative  Agent
requires  compliance  with  this  Section  4.1(a)  (i)  prior  to
February 14, 2000;

          (ii) copies of resolutions of the Board of Directors or
resolutions or actions of any other appropriate governing body of
each  Borrower  and each Guarantor authorizing  the  lending  and
security transactions contemplated hereunder and the execution of
all  the  Loan Documents to which each such Borrower or Guarantor
is  a  party,  which  resolutions shall be certified  to  by  the
Secretary, Assistant Secretary, or an Authorized Officer  of  the
applicable Borrower or Guarantor;

           (iii)      an incumbency certificate, executed by  the
Secretary  or  Assistant  Secretary of  each  Borrower  and  each
Guarantor  (or the general partner of each Borrower or  Guarantor
which  is a partnership), which shall identify by name and  title
and  bear the signatures of the Authorized Officers and any other
officers of such Borrower and such Guarantor authorized  to  sign
the Loan Documents to which such Borrower or Guarantor is a party
(including the Power of Attorney referenced in clause (iv)  below
if  applicable), upon which certificate the Administrative  Agent
and  the Lenders shall be entitled to rely until informed of  any
change in writing by AMRESCO;

           (iv)  an  original Power of Attorney for each Borrower
(other   than  AMRESCO),  each  Guarantor  (other  than   Foreign
Subsidiaries),  and  each other Subsidiary  (other  than  Foreign
Subsidiaries) of AMRESCO that is to execute the Pledge  Agreement
or  any amendment thereto or any other Loan Document, irrevocably
appointing AMRESCO as its agent and attorney-in-fact to  act  for
and  on its behalf for all matters related to this Agreement, the
other Loan Documents and the Credit Facilities, including without
limitation  execution of all Loan Documents (expressly  including
all  Notes  and  all Borrowing Notices), receipt of  all  notices
hereunder,  and  the  taking  of  actions  by  the  Borrowers  or
Guarantors  hereunder or related to the Credit  Facilities,  such
Powers  of  Attorney  to  be in form and  content  acceptable  to
Administrative Agent;

           (v)  a certificate, signed by an Authorized Officer of
AMRESCO, stating that on the date of this Agreement no Default or
Event of Default has occurred and is continuing;

           (vi)  a  written  opinion of  legal  counsel  for  the
Borrowers  and the Guarantors, addressed to Administrative  Agent
and   the   Lenders,  covering  such  matters  as  requested   by
Administrative  Agent  and its counsel,  in  form  and  substance
acceptable to Administrative Agent and its counsel;

           (vii)      the Notes required by Section 2.15, payable
to the order of each Lender, as applicable;

           (viii)       information   satisfactory    to    the
Administrative  Agent  and  the Required  Lenders  regarding  the
Borrowers' Year 2000 Program;

           (ix)  the  Security Documents, and all amendments  and
supplements  thereto  as  reasonably required  by  Administrative
Agent  and  its counsel in connection with this Agreement,  fully
executed by all parties thereto;

           (x)   all financing statements related to the Security
Documents  requested  by Administrative Agent,  executed  by  the
appropriate Borrower or Guarantor;

           (xi)  copies of all Custodial Agreements covering  all
Assigned Loans in effect on the date of this Agreement,  in  form
and  content  acceptable to Administrative Agent,  as  listed  in
Schedule 15;

           (xii)      the summary of insurance policies described
in Section 6.21;

           (xiii)     the  fully  executed Lend  Lease  Agreement
certified by an Authorized Officer of AMRESCO as being a true and
correct  copy  thereof as in effect on the date of  closing  this
Agreement,   which   certification   shall   also   contain   the
representations  set forth in Section 6.23 with  respect  to  the
Lend Lease Agreement;

           (xiv)      evidence that the Warehouse Lines financing
provided  by  Prudential  Securities  Credit  Corp.  to   AMRESCO
Commercial  Finance,  Inc. for its franchise  lending  and  small
business  lending operations have been renewed  and  extended  on
terms  satisfactory to Administrative Agent,  in  its  reasonable
discretion;

           (xv)  the  originals of all Foreign Subsidiary  Inter-
Company  Notes,  and all other Inter-Company Notes  requested  by
Administrative Agent, the MIC Notes, and all other notes  payable
to  any  Borrower  or any Guarantor (other than notes  evidencing
Assigned Loans held by a Custodian), duly endorsed in blank;

           (xvi)      copies of any material agreements to  which
AMRESCO  or  any other Borrower or any Guarantor is  a  party  as
requested by Administrative Agent, including specifically without
limitation, the agreement(s) evidencing the CLC Transaction,  any
agreements  related  to  MIC, and any agreements   evidencing  or
related to AMRESCO's investment in and arrangements with Finamco,
LLC; and

           (xvii)     such  other  documents,  instruments   and
certificates,  as  Administrative Agent or its counsel  may  have
reasonably requested.

      (b)   The representations and warranties contained in  this
Agreement  and  in  the other Loan Documents shall  be  true  and
correct upon the execution by Borrowers and Guarantors hereof and
the   closing  of  the  transactions  contemplated   under   this
Agreement.

      (c)   On  or  prior to the date of closing the transactions
contemplated  hereunder, Borrowers shall have paid all  fees  and
expenses  owing by Borrowers to Administrative Agent  and/or  the
Lenders, including without limitation the amendment fees  to  the
Lenders,  and, in the amounts requested on or before  such  date,
the  expenses  and  reasonable  attorneys'  fees  of  counsel  to
Administrative   Agent,  and  reasonable  consultant   fees   and
expenses.

      Section 4.2.   Conditions To All Advances.   The obligation
of  the Lenders to fund any Advance as provided herein is subject
to the satisfaction of the following conditions and requirements:

           (a)   timely  receipt  by Administrative  Agent  of  a
Borrowing  Notice  (which  shall  be  appropriately  modified  to
Administrative Agent's satisfaction with respect to  the  initial
funding of the Term Loan Facilities);

          (b)  immediately before and after giving effect to such
Advance,  no Default or Event of Default shall have occurred  and
be  continuing, and the making of such Advance shall not cause  a
Default or an Event of Default;

            (c)   each  of  the  representations  and  warranties
contained  in  this  Agreement and  in the other  Loan  Documents
shall  be true and correct in all material respects on and as  of
the  date  of  such  Advance, except that any  representation  or
warranty  that  speaks  as of a particular  date  shall  only  be
required on the date of each such Advance to be true and  correct
in   all  material  respects  as  of  the  date  to  which   such
representation  or warranty speaks and not as of  any  subsequent
date;

           (d)   all legal matters incident to the making of  the
Advance  shall  be satisfactory to Administrative Agent  and  its
counsel; and

            (e)    receipt  by  Administrative  Agent   of   such
information  and  documentation  as  Administrative  Agent  shall
reasonably  deem necessary, advisable or desirable in  connection
with the funding of such Advance.

      Section  4.3.    Conditions to Letters  of  Credit  .   The
obligation of the Issuing Lender to issue any Facility Letter  of
Credit  as  provided  herein is subject to  the  satisfaction  by
Borrowers of the following conditions and requirements:

           (a)   timely  receipt  by  the  Issuing  Lender  of  a
Borrowing Notice and a fully completed LOC Application;

           (b)   timely  receipt  by Administrative  Agent  of  a
Borrowing Notice;

           (c)  immediately before and after the issuance of such
Facility  Letter of Credit, no Default or Event of Default  shall
have  occurred and be continuing and the issuance of any Facility
Letter of Credit shall not cause a Default or Event of Default;

            (d)   each  of  the  representations  and  warranties
contained  in  this  Agreement and  in the other  Loan  Documents
shall  be true in all material respects on and as of the date  of
issuance  of  such  Facility Letter of Credit,  except  that  any
representation  or warranty that speaks as of a  particular  date
shall  only  be  required on the date of issuance  of  each  such
Facility  Letter of Credit to be true and correct in all material
respects  as of the date to which such representation or warranty
speaks and not as of any subsequent date;

          (e)  all legal matters incident to the issuance of such
Facility Letter of Credit shall be satisfactory to Administrative
Agent and Issuing Lender and their counsel;

           (f)  timely receipt by Administrative Agent (on behalf
of the Issuing Lender) of the issuance fee required to be paid to
the  Issuing  Lender  related to the issuance  of  such  Facility
Letter of Credit; and

            (g)    receipt  by  Administrative  Agent   of   such
information  and  documentation as Administrative  Agent  or  the
Issuing  Lender  shall  reasonably deem necessary,  advisable  or
desirable in connection with the issuance of such Facility Letter
of Credit.

      Each  Borrowing  Notice with respect  to  each  Advance  or
Facility  Letter of Credit shall constitute a representation  and
warranty  by  the  Borrowers  that the  conditions  contained  in
Sections  4.2  and  4.3,  as  applicable,  have  been  satisfied.
Administrative  Agent  may  require a duly  completed  compliance
certificate in substantially the form of Exhibit B as a condition
to making an Advance or causing the issuance of a Facility Letter
of Credit.

                            ARTICLE V

                           COLLATERAL

     Section 5.1.   Security and Guaranties.

           Section  5.1.1.  The  Loans, the Facility  Letters  of
Credit,  and  all of the other Obligations (as the  same  may  be
modified,   amended,  extended,  supplemented  and/or   increased
pursuant  to  this  Agreement) shall all be (a)  secured  by  the
Collateral and all proceeds thereof pursuant to the Liens created
by   the  Security  Documents,  until  the  particular  item   of
Collateral  is released or until all of the Facility  Letters  of
Credit  issued  hereunder  have  expired,  all  Facility  Foreign
Currency  Exchange Agreements have terminated,  and  all  of  the
Loans  and  all  other  Obligations  are  indefeasibly  paid  and
performed in full (and any obligation of the Revolving Lenders to
make  Advances  has been terminated) and (b) guaranteed  by  each
Subsidiary  that  is  not  a Borrower (other  than  the  Excluded
Subsidiaries  and, subject to Section 5.1.4, Foreign Subsidiaries
in  which  AMRESCO has no direct stock or other equity  ownership
interest,  except AMRESCO Funding Canada Inc.)  pursuant  to  the
terms of the  Guaranty.

           Section  5.1.2.  All Foreign Subsidiary  Inter-Company
Notes,  together with the respective blank endorsement, shall  be
delivered  to Administrative Agent as Collateral.  On  or  before
thirty  (30)  days after any Borrower or any Guarantor  makes  an
Investment in any Foreign Subsidiary, such applicable Borrower or
such  applicable Guarantor shall deliver to Administrative  Agent
the  related  original  Foreign  Subsidiary  Inter-Company  Note,
together  with  a  collateral assignment  and  blank  endorsement
thereof in form satisfactory to Administrative Agent.  All Inter-
Company  Notes  now or hereafter executed shall be  delivered  to
Administrative   Agent  (together  with  the   respective   blank
endorsement)  as  Collateral.  Within fifteen (15)  days  of  the
request of Administrative Agent made at any time and from time to
time,  AMRESCO  shall deliver to Administrative Agent  an  Inter-
Company  Note  evidencing the investment of any Borrower  or  any
Guarantor in a Subsidiary of such Borrower or Guarantor, together
with an endorsement thereof in blank.

           Section 5.1.3. Upon the earlier to occur of (1) thirty
(30)   days  after  the  filing  of  articles  of  incorporation,
certificates  of  limited partnership or  similar  organizational
documents  with  the appropriate Governmental  Authority  of  any
future  Subsidiary  of a Borrower or (2) two  (2)  Business  Days
prior  to  the date that such Subsidiary obtains from a  Borrower
proceeds of an Advance under the Revolving Credit Facility or any
of  its assets is included in the Borrowing Base, Borrowers shall
cause to be delivered to Administrative Agent (a) a Supplement to
Loan Documents properly executed by such future Subsidiary to add
such  Subsidiary  as a Borrower hereunder (or  at  Administrative
Agent's   election,  a  Guarantor  hereunder),  such   that   the
Subsidiary  becomes party on the Notes or the Guaranty  Agreement
and  related  contribution  and  indemnification  agreement,   as
applicable,  the  Security Agreement, the Pledge  Agreement,  the
Collateral  Assignment and any and all other Loan  Documents,  as
applicable,  (b) all financing statements related thereto  deemed
necessary or advisable by Administrative Agent, properly executed
by  such  Subsidiary,  and  any  appropriate  Borrower(s)  and/or
Guarantor(s), (c) if applicable, the original stock  certificates
for all of the outstanding shares of the stock in such Subsidiary
owned  by  any  Borrower  or Guarantor or  any  other  Subsidiary
(except  an  Excluded  Subsidiary), accompanied  by   appropriate
undated   stock  powers  executed  in  blank  by  the  applicable
Borrower,  Guarantor  or  Subsidiary, and  (d)  all  resolutions,
certificates  or  documents Administrative Agent  may  reasonably
request relating to the formation, existence and good standing of
such  Subsidiary,  corporate  authority  for  the  execution  and
validity of the Loan Documents described in clauses (a), (b)  and
(c)  above  and any other documents and matters relevant  to  the
formation of such future Subsidiary and its status as a  Borrower
or  Guarantor  (and  pledgor  if applicable),  all  in  form  and
substance    satisfactory   to   Administrative   Agent,    which
resolutions,  certificates and documents shall  include,  without
limitation, (i) the articles of incorporation and bylaws or other
organizational documents of such Subsidiary, (ii) resolutions  of
the  board of directors or other appropriate consents authorizing
the execution of the Loan Documents described in clauses (a), (b)
and  (c)  above on behalf of such Subsidiary and the granting  of
all  relevant  Liens  as  security  for  the  Credit  Facilities,
(iii)  certificates  of  incumbency  for  the  officers  of  such
Subsidiary,  and (iv) certificates of corporate (or  other  legal
entity)  existence  and  good standing issued  by  the  state  of
organization  of such future Subsidiary and from the  appropriate
Governmental  Authority  of  each  state  in  which  such  future
Subsidiary is required by applicable law to be qualified.

          Section 5.1.4. Upon the request of Administrative Agent
at any time, Borrowers shall cause any one or more of the Foreign
Subsidiaries,  as  designated  by Administrative  Agent,  to  (a)
become a Borrower or, with respect to any Foreign Subsidiary that
is  not  a Guarantor as of the date hereof, to execute a Guaranty
(or  supplement  to  a  Guaranty) and/or a Pledge  Agreement  (or
supplement  to a Pledge Agreement) and take all other actions  to
become  a  Guarantor as provided in Section 5.1.3, and  (b)  with
respect  to  any  Foreign Subsidiary, to grant to  Administrative
Agent  (on  behalf of the Lenders) Liens on any  or  all  of  the
assets  of  such designated Foreign Subsidiaries, except  to  the
extent  any such Foreign Subsidiary is prohibited from  so  doing
pursuant  to  an agreement permitted by Section 7.15(b),  and  to
execute,  deliver to Administrative Agent and file all documents,
instruments  and  agreements (all at  Borrowers'  expense)  which
Administrative  Agent shall require to create  and  perfect  such
Liens;  provided, however, that Administrative  Agent  shall  not
make  any  such  request  with respect  to  an  Excluded  Foreign
Subsidiary  unless and until the assets of such Excluded  Foreign
Subsidiary  are no longer subject to the Lend Lease Agreement  or
the  Lend Lease Agreement is terminated or the Lend Lease Closing
Date  does not occur prior to March 1, 2000; and provided further
that  in no event shall AMRESCO Japan, Inc. (or any other Foreign
Subsidiary that is not legally permitted to do so) be required to
become a Borrower or a Guarantor.

           Section 5.1.5. Administrative Agent and Lenders  agree
that  SBA  Guaranteed Loans and the related SBA Lender  Agreement
Assets  are and shall be deemed excluded as Collateral under  the
Loan  Documents  and shall not be covered by or  subject  to  the
Security  Agreement or the Collateral Assignment or the financing
statements executed by AMRESCO Independence Funding, Inc. or  any
such  other  Subsidiary that originates or holds  SBA  Guaranteed
Loans that has been approved by Administrative Agent.

      Section  5.2.    Requirements For  Assigned  Loans.    With
respect to each of the Assigned Loans, the applicable Borrower or
Guarantor shall deliver to the applicable Custodian the documents
required  by  the  applicable Custodial  Agreement,  which  shall
include, without limitation, the following:

           (a)   Either (i) the original promissory note or notes
evidencing   such   Assigned  Loan  properly   endorsed   showing
endorsements  thereof from the original holder  thereof  and  all
subsequent  holders,  to  the applicable Borrower  or  Guarantor,
together  with an endorsement thereof in blank executed  by  such
Borrower  or  Guarantor (in form satisfactory  to  Administrative
Agent),  which  endorsement may be in the form  of  one  or  more
allonge  endorsements affixed to the respective promissory  note,
(ii)  with  respect  to  any Assigned  Loan  where  the  original
promissory note has been lost, an original lost note affidavit in
form  which  is  sufficient under the UCC  or  the  laws  of  any
applicable  jurisdiction to enable the owner thereof to  maintain
an  action on the related promissory notes and recover  from  any
party  liable thereon, and properly executed by the  Person  that
sold   such  promissory  note  to  the  applicable  Borrower   or
Guarantor, (iii) with respect to any Assigned Loan for which  any
Borrower  or Guarantor has a participation interest, the original
or   a   copy  of  the  participation  certificate  or  agreement
evidencing the applicable Borrower's or Guarantor's  interest  in
such Assigned Loan, or (iv) with respect to any Assigned Loan for
which  any  Borrower  or  Guarantor has a judgment,  an  original
Assignment of Judgment (as defined in the Collateral Assignment);

           (b)   Copies of the mortgage, deed of trust  or  other
security documents by which a lien or security interest has  been
granted to secure such Assigned Loan;

          (c)  An original Transfer of Liens, which is sufficient
under  the  laws of the applicable jurisdiction for recording  in
such  jurisdiction and to effect a transfer of the Liens  therein
described,  properly executed and acknowledged by the appropriate
Borrower or Guarantor;

          (d)  To the extent in the possession of any Borrower or
Guarantor or an Affiliate of any Borrower or Guarantor,  a  Title
Policy and certificate of hazard and/or liability insurance  with
respect  to  any Underlying Real Estate; provided  that  a  Title
Policy shall be furnished for the Underlying Real Estate for  any
Assigned  Loan owned by AMRESCO Funding Canada Inc. for any  such
Assigned Loan to be included in the Borrowing Base; and

          (e)   Such other information related to the Underlying
Real  Estate,  to the extent in the possession of  any  Borrower,
Guarantor   or  Affiliate  of  any  Borrower  or  Guarantor,   as
Administrative Agent shall reasonably request.

     Section 5.3.   Requirements for Mortgaged Properties.   With
respect  to  each  of  the Mortgaged Properties,  the  applicable
Borrower  or  Guarantor which owns such Mortgaged Property  shall
deliver to the applicable Custodian the documents required by the
applicable  Custodial Agreement with respect thereto which  shall
include, without limitation, the following:

           (a)   A  copy of the deed or conveyance instrument  by
which  the  applicable Borrower or Guarantor took  title  to  the
Mortgaged Property;

           (b)   A  Title  Policy (which Title Policy  may  be  a
mortgagee  policy of title insurance which has  converted  to  an
owner's  policy of title insurance after foreclosure),  for  each
Mortgaged Property with a value in excess of One Hundred Thousand
and  No/100  Dollars ($100,000.00) and, unless covered  under  an
umbrella  policy approved by Administrative Agent, a  certificate
of  hazard  and/or  liability insurance  covering  the  Mortgaged
Property;

           (c)   An  original, properly executed and acknowledged
Mortgage, together with such financing statements related thereto
as   are   necessary  or  advisable,  in  Administrative  Agent's
determination, to perfect the Lenders' Liens with respect to  the
fixtures and personal property subject to such mortgage; and

           (d)   Such  other information as Administrative  Agent
shall reasonably request.

      Section  5.4.    Recording.   Any  original  Mortgage  (and
related  financing statement) and Transfer of Lien  held  by  any
Custodian  shall be recorded in the appropriate real  estate  (or
UCC,  as  appropriate) records if and when (i) a  Default  or  an
Event  of  Default occurs, or (ii) Administrative Agent  delivers
ten  (10)  days prior written notice to the applicable  Custodian
and AMRESCO that the Required Lenders require the recordation  of
such   Mortgages   (and  related  financing  statements)   and/or
Transfers  of  Liens.  After the occurrence of any of  the  above
events,  the  applicable Custodian or Administrative Agent  shall
have  the  right  to  record any and all Mortgages  (and  related
financing  statements) and Transfers of Liens then  held  by  the
Custodian,  and Borrowers shall be required to pay, or  reimburse
the  Lenders  for the payment of, all filing fees,  mortgage  and
stamp   taxes   and   other   expenses   incurred   by   Lenders,
Administrative  Agent  or  Custodian  in  connection   with   the
recordation  of the Mortgages (and related financing  statements)
and  Transfers  of  Liens.   Notwithstanding  the  foregoing   or
anything else herein or in the Existing Credit Agreement  to  the
contrary,  on or before February 14, 2000, Mortgages and  related
UCC financing statements for each of the Mortgaged Properties  so
designated  for recordation on Schedule 16 shall be  recorded  in
all  appropriate filing offices, and Borrowers shall execute  and
deliver  all such documents and take all other actions  necessary
for such recordation in compliance with all applicable laws.

      Section  5.5.    Administrative Agent's  Discretion.    All
requirements   for   the  Collateral  are  imposed   solely   and
exclusively for the benefit of the Lenders but are to be enforced
and  monitored solely and exclusively by Administrative Agent  in
accordance with the provisions of the Loan Documents.  No  Person
(including any Borrower, any Guarantor or any Lender) other  than
Administrative   Agent  shall  have  any  standing   to   require
satisfaction  of  any  such requirements.   Administrative  Agent
shall be entitled to require delivery of the items referenced  in
Section  5.2 and Section 5.3 at any time and from time  to  time,
and the failure of Administrative Agent to request any such items
at  any  particular time shall not constitute  a  waiver  of  the
Lenders'  rights  to  thereafter  require  that  such  items   be
delivered.

     Section 5.6.   Lockbox; Lockbox Accounts; Other Accounts.

           (a)   Notwithstanding any provision herein or  in  the
other  Loan  Documents to the contrary, Borrowers and  Guarantors
agree  that  they have previously instructed all current  Account
Debtors,  and  they will cause instructions to be  given  to  all
future  Account  Debtors  within  thirty  (30)  days  after   the
acquisition  of  an  Assigned  Loan  that  will  be  included  in
computing  the  Borrowing Base, pursuant to  a  letter  from  the
appropriate Borrower or Guarantor, or the seller of such  Managed
Asset   Portfolio   or  the  Custodian  in   form   approved   by
Administrative Agent, to mail all payments and other  remittances
owing with respect to the Assigned Loans directly to the Lockbox.
Lockbox Agent will have exclusive and unrestricted access to  the
Lockbox  and  will  have  complete  and  exclusive  authority  to
receive,  pick  up and open all mail addressed  to  the  Lockbox,
whether registered, certified, insured or otherwise.  Neither any
Borrower  nor  any Guarantor will have access to or control  over
the Lockbox or any checks or monies received in the Lockbox.  All
items  received  and  monies collected  in  connection  with  the
Assigned Loans will be processed by the Lockbox Agent pursuant to
the  terms of the Lockbox Agreement, and in the event any  checks
or  monies shall be submitted to any Borrower or any Guarantor by
any  Account Debtor under the Assigned Loans, or shall  otherwise
come  into  the possession of any Borrower or any Guarantor,  the
same  shall be deemed held by such Borrower or Guarantor in trust
for  the  Lenders, and such Borrower or Guarantor  shall  deliver
the  same  to  the Lockbox Agent within three (3)  Business  Days
after  received  by  such  Borrower  or  Guarantor,  endorsed  if
appropriate, for deposit into one of the Lockbox Accounts.

           (b)  As provided in the Lockbox Agreement, the balance
of  funds  in the Lockbox Accounts shall be transferred daily  to
the   Capture  Account  (as  such  term  is  defined   and   more
particularly described in the Lockbox Agreement).  So long as  no
Default  or  Event  of Default has occurred  and  is  continuing,
amounts  in  the Capture Account will be deposited into AMRESCO's
operating  account  at Bank of America as designated  in  writing
from  time to time by AMRESCO to the Lockbox Agent (provided that
at the direction of Administrative Agent, in its sole discretion,
the  Lockbox Agent shall disburse funds from the Capture  Account
to  Administrative Agent for application to pay any amounts  then
due  on  any of the Credit Facilities).  Upon the occurrence  and
during  the  continuance of a Default or Event  of  Default,  all
amounts  in the Capture Account shall be disbursed to and applied
by   Lockbox  Agent  and  Administrative  Agent  to  reduce   the
outstanding  Obligations as provided herein and  to  be  paid  in
accordance  with  Section 9.19.  Neither  any  Borrower  nor  any
Guarantor nor any other Person (other than Administrative  Agent)
shall  have any access to or control over any Lockbox Account  or
the   Capture   Account,  or  any  of  the  funds  therein,   and
Administrative  Agent shall have sole dominion and  control  over
such  accounts,  subject to the terms of this Agreement  and  the
Lockbox Agreement.

           (c)  With respect to all of the Lockbox Accounts,  the
Capture  Account, the Lend Lease Post-Closing Adjustment Account,
any Letter of Credit escrow account and any other deposit account
whatsoever pledged or intended to be pledged as security for  the
Obligations,  each Borrower, and each Guarantor, hereby  pledges,
assigns,  sets  over  and transfers to Administrative  Agent,  as
agent  for  the  benefit and on behalf of the Lenders,  all  such
accounts  and  the funds therein and the rights of each  Borrower
and  each  Guarantor to such accounts and the funds therein,  and
grants a security interest in and to such accounts and the rights
of  each  Borrower  and each Guarantor to such accounts  and  the
funds therein in favor of Administrative Agent, as agent for  the
benefit  and  on behalf of Lenders.  Such pledge, assignment  and
security  interest herein granted shall secure  the  payment  and
performance   of   the  Loans  and  all  the   Obligations,   and
Administrative Agent, as agent for the benefit and on  behalf  of
Lenders,  shall be entitled to exercise all rights  and  remedies
available  hereunder and under all the Loan Documents,  the  UCC,
other  applicable  laws and equitable rights, including,  without
limitation, rights of setoff, with respect thereto.  The right of
setoff  is  hereby expressly granted with respect  to  and  shall
apply   to   amounts  on  deposit  in  any  such  accounts   with
Administrative  Agent  as  if such deposits  were  held  by  each
Lender.  Possession of any such accounts and the funds therein by
Administrative  Agent (or any successor depositary  institution),
as  agent  and  bailee  for  all the  Lenders,  shall  be  deemed
possession  by  each Lender.  Each Borrower, and each  Guarantor,
hereby  authorizes Administrative Agent (a) to withdraw,  collect
and receipt for any and all funds on deposit in or payable on any
such  accounts;  (b)  on  behalf of the  applicable  Borrower  or
Guarantor, to endorse the name of such Borrower or Guarantor upon
any  checks, drafts or other instruments payable to such Borrower
or  Guarantor  evidencing payment to such  account;  and  (c)  to
surrender  or  present  for notation of withdrawal  the  passbook
certificate   or  other  instruments  or  documents   issued   in
connection  with such account, all such documents and instruments
to  be issued to and retained in the possession of Administrative
Agent.   In  the  event of any setoff of the funds  in  any  such
account  or  application of such funds pursuant to the assignment
and  security interest herein granted, Administrative Agent shall
distribute  to each Lender its ratable portion of such  funds  in
accordance with the applicable terms of this Agreement.   AMRESCO
and  any applicable Borrowers or Guarantors shall execute any and
all   documents  reasonably  requested  by  Administrative  Agent
relating  to  such  accounts, including  without  limitation  any
Account  Assignments  and  financing statements.   Borrowers  and
Guarantors  expressly  understand and agree  that  Administrative
Agent  and the Lenders will have the right of setoff with respect
to  any such accounts upon the occurrence of an Event of Default.
No  such  account  shall be deemed to be a  special  account  for
purposes of limiting setoff rights with respect thereto,  and  no
third  party shall be a beneficiary of any such accounts,  or  of
the  terms  of  the  agreements regarding such  accounts  between
Administrative  Agent,  for the Lenders,  and  any  Borrowers  or
Guarantors.  Without limitation of the foregoing, it is expressly
understood  and agreed that the establishment of the  Lend  Lease
Post-Closing Adjustment Account is solely as an accommodation  to
those Borrowers who are sellers under the Lend Lease Agreement to
facilitate  satisfaction of their obligations under  Section  3.3
thereof,  and  that  such  account  and  the  funds  therein  are
Collateral  which  are  subject in all  respects  to  the  rights
(including  setoff) of Administrative Agent and the Lenders,  and
that no third party (including Lend Lease) shall be a beneficiary
of  such  account or the provisions of this Agreement  respecting
such account.

     Section 5.7.   Releases of Collateral.

           Section  5.7.1  Continuing Operations.  Prior  to  the
occurrence  of  a  Default  or Event of  Default,  Borrowers  and
Guarantors shall be entitled to obtain a release of the  Lenders'
Liens  with  respect to Collateral designated  by  Borrowers  and
which  is  owned  by the Subsidiaries conducting  the  Continuing
Operations  so  long  as  (a) either  (i)  the  Collateral  being
released  is  being  sold  by the applicable  Subsidiary  in  the
ordinary  course  of  business,  or  (ii)  the  Collateral  being
released is being pledged by the applicable Subsidiary to  secure
Warehouse  Lines as permitted under Section 7.11,  (b)  Borrowers
and  Guarantors  shall  continue to be in compliance  under  this
Agreement   following  the  release  of  such   Lenders'   Liens,
including,  without limitation, in compliance with the applicable
required  Borrowing Base Coverage Ratio, and (c)  Borrowers  have
reduced or will reduce on a date approved by Administrative Agent
the amount outstanding under the Revolving Credit Facility in  an
amount  deemed satisfactory by Administrative Agent, in its  sole
discretion, due to such release of Collateral.  In the case of  a
requested release for a sale or transfer of any such assets  that
does  not meet the requirements of the foregoing clause  (a)  but
does  meet the requirements of the foregoing clauses (b) and (c),
such  release  shall be subject to the consent of  Administrative
Agent, in its sole and absolute discretion.  Except as covered by
the  Specified  Asset  Release Agreement as provided  in  Section
5.7.6, or with respect to the release of all or substantially all
of  the  Collateral  as  referenced in  Section  11.3(a)(vii)  as
requiring the consent of all Lenders, any other release  of  such
Collateral shall be granted by Administrative Agent only with the
consent of the Required Lenders.

           Section 5.7.2. Discontinued Operations.  Prior to  the
occurrence  of  a  Default  or Event of  Default,  Borrowers  and
Guarantors shall be entitled to obtain a release of the  Lenders'
Liens  with  respect to Collateral designated  by  Borrowers  and
which  is  owned  by the Subsidiaries in which  the  Discontinued
Operations  are  or were conducted (including without  limitation
stock  and/or  other  ownership  interests  in  the  Discontinued
Subsidiaries), so long as (a) Administrative Agent, in  its  sole
and  absolute discretion, has approved the release price for  the
sale  of such assets, and (b) the proceeds of such sale (net only
of   reasonable  and  customary  closing  costs)  are   paid   to
Administrative  Agent, for the benefit of  the  Term  Lenders  as
required by Section 2.2.2.

          Section 5.7.3. Subsidiary Stock and Notes.  In no event
shall  Borrowers or Guarantors be entitled to a  release  of  the
Lenders'  Liens with respect to (a) the stock and other ownership
interests of AMRESCO's direct and indirect Subsidiaries  required
to  be  pledged  hereunder, except in connection with  a  merger,
consolidation,  or dissolution permitted by Section  7.12  or  as
specifically provided in Sections 5.7.2 and 5.7.6, and in Section
5.7.5  to  the extent the Lend Lease Agreement provides  for  the
transfer of any stock or other ownership interests, and  (b)  the
Foreign  Subsidiary Inter-Company Notes, unless  such  notes  are
paid in full.

            Section  5.7.4.  Structured  Real  Estate  Portfolio.
Notwithstanding  anything  in this  Section  5.7,  or  any  other
provision hereof or of the other Loan Documents, Borrowers  shall
be  entitled to the release of the Lenders' Liens with respect to
the  Assigned  Loans in the Structured Real Estate  Portfolio  so
long  as  (a)  the  SREP Required Payment,  and  the  Lend  Lease
Deferral if applicable, is paid to Administrative Agent, for  the
benefit  of  the  Lenders, as provided in Sections  2.2.1(c)  and
2.2.3(a), and (b) the gross cash proceeds of the Structured  Real
Estate  Portfolio  Sale  (or the subject Structured  Real  Estate
Asset Sale) received by Borrowers is not less than the greater of
(i) 95% of the book value of the Structured Real Estate Portfolio
(or  the  subject  Assigned Loan in the  Structured  Real  Estate
Portfolio), and (ii) an amount determined by Administrative Agent
to  be  95%  of  the market value of the Structured  Real  Estate
Portfolio  (or  the subject Assigned Loan in the Structured  Real
Estate  Portfolio), and (c) no Default or Event  of  Default  has
occurred and is continuing.

           Section  5.7.5.  Lend  Lease Assets.   Notwithstanding
anything in this Section 5.7, or any other provision hereof or of
the  other  Loan  Documents, Borrowers shall  be  entitled  to  a
release  of  the Lenders' Liens with respect to the assets  being
sold  to Lend Lease as set forth in the Lend Lease Agreement upon
closing  of  the transactions contemplated under the  Lend  Lease
Agreement  on  the  terms thereof, and receipt by  Administrative
Agent, for the benefit of the Lenders, of the Lend Lease Required
Payment as provided in Section 2.2.1(a), so long as no Default or
Event of Default has occurred and is continuing at such time; and
provided  that  (a) the original of the Lend Lease Holdback  Note
has  been  delivered to Administrative Agent,  together  with  an
allonge endorsement in blank in form acceptable to Administrative
Agent,  (b)  the Lend Lease Post-Closing Adjustment  Account  has
been  established  and  funded, and has  been  duly  assigned  to
Administrative Agent for the benefit of the Lenders, and (c)  the
Servicing Agreement has been duly executed and is in effect,  and
it has been duly assigned to Administrative Agent for the benefit
of  the  Lenders  as provided in Section 7.20; provided  further,
however,  that the requirements of the foregoing clauses (a), (b)
and (c) may be satisfied by delivery in escrow for Administrative
Agent,  on  terms reasonably acceptable to Administrative  Agent,
such   funds,  documents  and  other  items  (including   without
limitation the original Lend Lease Holdback Note and endorsement,
the  funds  to  be  deposited  in  the  Lend  Lease  Post-Closing
Adjustment   Account,  and  the  Servicing  Agreement),   pending
consummation of the closing of the Lend Lease Agreement  and  the
release of the Lenders' Liens contemplated in this Section 5.7.5.

           Section 5.7.6. Other Asset Sales.  Borrowers shall  be
entitled  to  the release of the Lenders' Liens with  respect  to
(a)  the  assets  of,  or  the stock of, the  Subsidiaries  whose
business  is the lines of business comprising AMRESCO's "Consumer
Finance"  operations, "Builders Group" division  and  operations,
and  "Telecapital" division and operations, (b) AMRESCO's Foreign
Subsidiaries  organized and operating in the United  Kingdom  and
Jersey, Channel Islands (and/or their assets), and (c) the  stock
and  stock  options  in AMRESCO Capital Trust owned  by  AMRESCO,
AMREIT  Holdings, Inc., and AMREIT Managers, L.P., and the rights
and  interests  of  AMREIT Managers, L.P.  under  its  management
agreement with AMRESCO Capital Trust, and related interests,  all
subject  to  and  in  accordance with the terms,  conditions  and
provisions of a separate written agreement (the "Specified  Asset
Release  Agreement")  regarding such  releases  executed  by  and
between  AMRESCO and Administrative Agent as of the date  hereof,
so  long  as no Default or Event of Default has occurred  and  is
continuing.

      Section  5.8.    Deposit  of Cash Collateral  for  Facility
Letters of Credit.   Upon the occurrence of a Default or an Event
of Default, Borrowers shall, on the next succeeding Business Day,
deposit   in   a   segregated,  interest  bearing  account   with
Administrative  Agent  such  funds as  Administrative  Agent  may
request,  up to a maximum amount equal to the aggregate  existing
Facility  Letter  of Credit Exposure, any such deposit  to  occur
automatically  (and  may  be made by a  transfer  of  funds  from
pledged  accounts with Administrative Agent) upon the  occurrence
of an Event of Default described in Sections 8.1.6 or 8.1.7.  Any
funds  so  deposited  shall be held by  Administrative  Agent  as
security  for  the  Obligations  (including  in  respect  of  the
Facility  Letters  of Credit) and Borrowers will,  in  connection
therewith,  execute  and  deliver such assignments  and  security
agreements  in  form and substance satisfactory to Administrative
Agent which Administrative Agent may, in its discretion, require.
As drafts or demands for payment are presented under any Facility
Letter   of   Credit,   Borrowers   hereby   irrevocably   direct
Administrative Agent to apply such funds to satisfy  such  drafts
or demands.  When all Facility Letters of Credit have expired and
the  Revolving  Notes  have been repaid in  full  (and  Revolving
Lenders  have  no  obligation to make further Advances  or  issue
Facility Letters of Credit hereunder) or such Default or Event of
Default  has  been  cured to the satisfaction  of  Administrative
Agent,  Administrative  Agent  shall  release  to  Borrowers  any
remaining  funds  deposited  under this  Section  5.8.   Whenever
Borrowers  are required to make deposits under this  Section  5.8
and  fail to do so on the day such deposit is due, Administrative
Agent may (but shall not be obligated to do so) make such deposit
from  an  Advance  under the Revolving Credit Facility  (provided
that  any  such  Advance,  together with  all  other  outstanding
Advances [including Swingline Advances], the Facility FX Exposure
and  the  Facility Letter of Credit Exposure [less the amount  of
such  Advance]  shall  not exceed the Revolving  Commitment),  or
using  any  funds of Borrowers (including without  limitation  in
pledged accounts) then available to the Revolving Lenders.

                           ARTICLE VI

                 REPRESENTATIONS AND WARRANTIES

     Each of the Borrowers and Guarantors represents and warrants
to Administrative Agent and the Lenders that:

      Section  6.1.    Existence  and  Standing.    Each  of  the
Borrowers, Guarantors, and Subsidiaries is a corporation, limited
partnership   or   limited  liability  company   (as   designated
respectively in Borrowers' Corporate Organizational  Chart)  duly
and  properly  incorporated or organized, as  the  case  may  be,
validly existing and (to the extent such concept applies to  such
entity)  in  good standing under the laws of its jurisdiction  of
incorporation or organization and has all requisite authority  to
own  and  lease its Property and to conduct its business in  each
jurisdiction in which its Property is located or its business  is
conducted.

      Section  6.2.   Authorization and Validity.   Each  of  the
Borrowers,  Guarantors  and  Subsidiaries  has  the   power   and
authority  and  legal  right  to execute  and  deliver  the  Loan
Documents  to which it is a party, to consummate the transactions
contemplated therein, and to perform its obligations  thereunder.
The  execution and delivery by each of the Borrowers, Guarantors,
and  other applicable Subsidiaries of the Loan Documents to which
it  is  a party and the performance of its obligations thereunder
have  been  duly authorized by proper corporate proceedings,  and
the  Loan  Documents to which each Borrower, each  Guarantor,  or
each other applicable Subsidiary is a party constitute the legal,
valid  and  binding  obligations of such Borrower,  Guarantor  or
other  applicable Subsidiary enforceable against  such  Borrower,
Guarantor or other applicable Subsidiary in accordance with their
terms,  except  as enforceability may be limited  by  bankruptcy,
insolvency   or   similar  laws  affecting  the  enforcement   of
creditors' rights generally.

      Section  6.3.   No Conflict; Government Consent.    Neither
the  execution and delivery by any Borrower, any Guarantor or any
other  Subsidiary of the Loan Documents to which it is  a  party,
nor  the  consummation of the transactions therein  contemplated,
nor  compliance with the provisions thereof will violate (i)  any
law,  rule, regulation, order, writ, judgment, injunction, decree
or award binding on any Borrower, any Guarantor or any Subsidiary
or  (ii)  any  Borrower's, any Guarantor's  or  any  Subsidiary's
articles  or certificate of incorporation, partnership agreement,
certificate   of   partnership,  articles   or   certificate   of
organization,   by-laws,  or  operating   or   other   management
agreement,  as  the case may be, or (iii) the provisions  of  any
indenture,  instrument or agreement to which  any  Borrower,  any
Guarantor or any Subsidiary is a party or is subject, or by which
it, or its Properties, is bound, or conflict with or constitute a
default  thereunder, or result in, or require,  the  creation  or
imposition  of  any  Lien  in, of or on  the  Properties  of  any
Borrower,  any Guarantor or any Subsidiary pursuant to the  terms
of  any  such  indenture,  instrument or  agreement.   No  order,
consent,  adjudication,  approval,  license,  authorization,   or
validation  of,  or  filing, recording or registration  with,  or
exemption  by, or other action in respect of any governmental  or
public  body or authority, or any subdivision thereof, which  has
not  been  obtained  by  AMRESCO or any of its  Subsidiaries,  is
required  to  be obtained by any Borrower, any Guarantor  or  any
Subsidiary in connection with the execution and delivery  of  the
Loan  Documents,  the borrowings and other extensions  of  credit
under  this  Agreement,  the  payment  and  performance  by   the
Borrowers  and  Guarantors of the Obligations  or  the  legality,
validity,  binding effect or enforceability of any  of  the  Loan
Documents.

      Section  6.4.    Financial Statements.   The September  30,
1999  consolidated  financial  statements  of  AMRESCO  and   its
Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with Agreement Accounting Principles in effect on  the
date  such  statements  were  prepared  and  fairly  present  the
consolidated  financial condition and operations of  AMRESCO  and
its  Subsidiaries  at such date and the consolidated  results  of
their operations for the period then ended.

     Section 6.5.   Material Adverse Change.  Except as disclosed
to  Administrative Agent and the Lenders in writing prior to  the
date  hereof, since September 30, 1999, there has been no  change
in  the business, financial condition or results of operations of
AMRESCO  and its  Subsidiaries which could reasonably be expected
to have a Material Adverse Effect.

      Section  6.6.   Taxes.   AMRESCO and its Subsidiaries  have
filed  all  United States federal tax returns and all  other  tax
returns  which are required to be filed and have paid  all  taxes
due  pursuant  to  said  returns or pursuant  to  any  assessment
received  by  AMRESCO  or  any of its Subsidiaries,  except  such
taxes,  if  any, as are being contested in good faith and  as  to
which  adequate  reserves have been provided in  accordance  with
Agreement  Accounting Principles.  No tax liens have  been  filed
and  no claims are being asserted with respect to any such taxes.
The  charges, accruals and reserves on the books of  AMRESCO  and
its  Subsidiaries  in respect of any taxes or other  governmental
charges are adequate.  If AMRESCO or any of its Subsidiaries is a
limited  liability  company, each such limited liability  company
qualifies  for  partnership  tax treatment  under  United  States
federal tax law.

       Section  6.7.    Litigation  and  Contingent  Obligations.
There  is no litigation, arbitration, governmental investigation,
proceeding  or  inquiry pending or, to the knowledge  of  any  of
their   respective  officers,  threatened  against  or  affecting
AMRESCO  or  any  of its Subsidiaries which could  reasonably  be
expected  to  have a Material Adverse Effect or  which  seeks  to
prevent, enjoin or delay the making of any Loans.  Other than any
liability  incident to any litigation, arbitration or  proceeding
which could not reasonably be expected to have a Material Adverse
Effect,  no  Borrower, Guarantor or Subsidiary has  any  material
Contingent  Obligations  not provided for  or  disclosed  in  the
financial statements referred to in Section 6.4.

      Section  6.8.    Subsidiaries.    Schedule  7  contains  an
accurate  list of all Subsidiaries of AMRESCO as of the  date  of
this  Agreement, setting forth for each Subsidiary its respective
jurisdiction of organization and the percentage of its respective
capital  stock  or  other ownership interests  owned  by  AMRESCO
and/or  other  Subsidiaries.  All of the issued  and  outstanding
shares  of  capital  stock or other ownership interests  of  such
Subsidiaries have been (to the extent such concepts are  relevant
with  respect  to such ownership interests) duly  authorized  and
issued and are fully paid and non-assessable.

      Section  6.9.    ERISA.   The Unfunded Liabilities  of  all
Single  Employer  Plans do not in the aggregate exceed  $500,000.
Neither AMRESCO nor any other member of the Controlled Group  has
incurred,  or  is  reasonably expected to incur,  any  withdrawal
liability  to  Multiemployer Plans in excess of $500,000  in  the
aggregate.  Each Plan complies in all material respects with  all
applicable  requirements  of law and regulations,  no  Reportable
Event has occurred with respect to any Plan, neither AMRESCO  nor
any  other member of the Controlled Group has withdrawn from  any
Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan.

      Section  6.10.  Accuracy of Information.   No  information,
exhibit  or  report furnished by any Borrower  or  any  of  their
Subsidiaries  to  the Administrative Agent or to  any  Lender  in
connection with the negotiation of, or compliance with, the  Loan
Documents, viewed in their totality insofar as any one or more of
such  items  must  be construed together, contains  any  material
misstatement  of fact or omits to state a material  fact  or  any
fact  necessary  to  make the statements  contained  therein  not
misleading.

      Section 6.11.  Purpose of Credit; Regulation U.   Borrowers
and Guarantors will use the proceeds of the Credit Facilities for
the  purposes stated in Section 2.1(a) and in connection with the
conduct  of the business AMRESCO and its Susidiaries as  provided
in Section 7.4.  No part of the proceeds of the Credit Facilities
will  be  used,  directly  or indirectly,  for  a  purpose  which
violates  any law, rule or regulation.  Borrowers and  Guarantors
will not, directly or indirectly, use any of the proceeds of  any
of  the  Credit  Facilities  for the  purpose  of  purchasing  or
carrying,  or  retiring  any Indebtedness  which  was  originally
incurred  to purchase or carry, any "margin stock" as defined  in
the  Margin  Regulations, or to purchase or carry  any  "security
that is publicly-held" within the meaning of Regulation T of  the
Board  of  Governors of the Federal Reserve System, or  otherwise
take or permit any action which would involve a violation of  the
Margin  Regulations  or any other regulation  of  such  Board  of
Governors.   The Credit Facilities are not secured,  directly  or
indirectly, in whole or in part, by collateral that includes  any
"margin stock" within the meaning of the Margin Regulations.   No
Borrower or Guarantor will engage principally, or as one  of  its
important activities, in the business of extending credit for the
purpose  of purchasing or carrying any "margin stock" within  the
meaning of the Margin Regulations.

      Section  6.12.  Material Agreements.   Neither AMRESCO  nor
any  of  its  Subsidiaries  is  in default  in  the  performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party,
or  (ii)  any  agreement  or instrument evidencing  or  governing
Indebtedness,  which  default could, as to either  (i)  or  (ii),
reasonably be expected to have a Material Adverse Effect or, with
respect to the applicable Borrower or Guarantor party thereto,  a
material   adverse  effect  on  such  Borrower's  or  Guarantor's
financial   condition   or  ability  to  conduct   its   business
operations.

      Section  6.13.   Compliance With Laws.    AMRESCO  and  its
Subsidiaries  have  complied in all material  respects  with  all
applicable  statutes, rules, regulations, orders and restrictions
of  any domestic or foreign government or any instrumentality  or
agency  thereof  having jurisdiction over the  conduct  of  their
respective  businesses  or  the  ownership  of  their  respective
Property  except  for  any failure to  comply  with  any  of  the
foregoing  which  could  not reasonably be  expected  to  have  a
Material Adverse Effect.

      Section  6.14.  Ownership of Properties.    Except  as  set
forth  on Schedule 8, on the date of this Agreement, AMRESCO  and
its  Subsidiaries will have good title, free of all  Liens  other
than  those permitted by Section 7.15(a), to all of the  Property
and  assets  reflected  in  AMRESCO's  most  recent  consolidated
financial  statements  provided to the  Administrative  Agent  as
owned by AMRESCO and its Subsidiaries.  Each of the Borrowers and
Guarantors  has  good  and  indefeasible  title  to  all  of  the
Collateral  and  all other assets reflected on the  most  current
financial  statements  of AMRESCO and most recent  Pledged  Asset
Schedule  and  Certification delivered to  Lenders.   Except  for
Permitted    Encumbrances   and   other   Liens   permitted    by
Section 7.15(a), there is no Lien on any property of any Borrower
or  any  Guarantor, and the execution, delivery, performance  and
observance  of the Loan Documents will not require or  result  in
the  creation  of any Lien (except Lenders' Liens)  on  any  such
property.   Each  of  the Borrowers and Guarantors  has  properly
granted to Lenders a perfected security interest or lien  in  all
Assigned Loans and other Collateral and a valid first lien on all
Mortgaged  Properties  (subject, in the  case  of  the  Mortgaged
Properties,   to  Section 5.4) owned by  such  Borrower  or  such
Guarantor,  which have not been previously released  pursuant  to
the  terms of the applicable Custodial Agreement.  Borrowers  and
Guarantors  have requested as an accommodation to  Borrowers  and
Guarantors because of the number of Assigned Loans and  for  ease
of administering the Credit Facilities that the Assigned Loans be
endorsed  by  using  an allonge endorsement,  and  Borrowers  and
Guarantors acknowledge that, if an allonge endorsement is so used
in  connection  with an Assigned Loan, Borrowers and   Guarantors
intend  such  endorsement to be a part of the  Assigned  Loan  as
fully as if such endorsement were made on the instrument itself.

      Section  6.15.  Plan Assets; Prohibited Transactions.    No
Borrower  is  an entity deemed to hold "plan assets"  within  the
meaning of 29 C.F.R.  2510.3-101 of an employee benefit plan  (as
defined in Section 3(3) of ERISA) which is subject to Title I  of
ERISA  or  any plan (within the meaning of Section  4975  of  the
Code), neither the execution of this Agreement nor the making  of
Loans hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code,  and
"benefit  plan  investors"  (as defined  in  29  C.F.R.   2510.3-
101(f))  do  not  own 25% or more of the value of  any  class  of
equity interests in AMRESCO.

      Section  6.16.   Environmental Matters.   In  the  ordinary
course  of  its  business, the officers of AMRESCO  consider  the
effect  of Environmental Laws on the business of AMRESCO and  its
Subsidiaries, in the course of which they identify  and  evaluate
potential   risks  and  liabilities  accruing  to  Borrowers   or
Guarantors  due  to  Environmental Laws.  On the  basis  of  this
consideration,  AMRESCO  has concluded  that  Environmental  Laws
cannot  reasonably be expected to have a Material Adverse Effect.
Neither AMRESCO nor any Subsidiary has received any notice to the
effect  that  its operations are not in material compliance  with
any  of the requirements of applicable Environmental Laws or  are
the  subject  of  any  federal or state investigation  evaluating
whether any remedial action is needed to respond to a release  of
any  toxic  or hazardous waste or substance into the environment,
which  non-compliance  or  remedial action  could  reasonably  be
expected to have a Material Adverse Effect.

      Section 6.17.  Investment Company; Investment Advisor.   No
Borrower,   Guarantor  or  other  Subsidiary  is  an  "investment
company"  or  a company "controlled" by an "investment  company",
within  the  meaning of the Investment Company Act  of  1940,  as
amended.  No Borrower, Guarantor or other Subsidiary (other  than
AMRESCO  Advisors, Inc.) is an "investment advisor" or an advisor
"controlled"  by an "investment company", within the  meaning  of
the Investment Advisors Act of 1940 as amended.

     Section 6.18.  Public Utility Holding Company Act.   Neither
AMRESCO  nor  any  Subsidiary  is  a  "holding  company"   or   a
"subsidiary company" of a "holding company", or an "affiliate" of
a  "holding  company" or of a "subsidiary company" of a  "holding
company",  within  the  meaning of  the  Public  Utility  Holding
Company Act of 1935, as amended.
      Section  6.19.  Year 2000.   AMRESCO has made  a  full  and
complete assessment of any potential Year 2000 Problems and has a
realistic  and achievable program for remediating such Year  2000
Problems  on  a timely basis, which program has been  implemented
and completed prior to the date hereof (the "Year 2000 Program").
Based  on such assessment and on the Year 2000 Program, Borrowers
do not reasonably anticipate that Year 2000 Problems will have  a
Material Adverse Effect.

        Section    6.20.    Subordinated   Indebtedness;    Other
Indebtedness.    The  Obligations constitute senior  indebtedness
which is entitled to the benefits of the subordination provisions
of  all  outstanding Subordinated Indebtedness.  No  Borrower  or
Guarantor   is  an  obligor  on  any  Indebtedness   other   than
Indebtedness permitted by Section 7.11.  No Borrower or Guarantor
is  (nor  will  any  Borrower or any Guarantor  ever  become)  an
obligor  on  any Indebtedness of any Excluded Subsidiary  or  any
Foreign Subsidiary, and none of the assets of any Borrower or any
Guarantor  have  been pledged to secure, or  otherwise  given  as
security for, any Indebtedness of any Excluded Subsidiary.

     Section 6.21.  Insurance.   Each Borrower and each Guarantor
maintains  with  financially  sound,  responsible  and  reputable
insurance   companies  or  associations  (or,  as   to   workers'
compensation or similar insurance, with an insurance fund  or  by
self-insurance  authorized  by  the  jurisdictions  in  which  it
operates)  insurance  concerning  its  properties  and   business
against  such casualties and contingencies and of such types  and
in  such  amounts (and with co-insurance and deductibles)  as  is
customary  for  the same or similar businesses.  The  certificate
signed  by an Authorized Accounting Officer that attests  to  the
existence  and  adequacy  of, and summarizes,  the  property  and
casualty  insurance program carried by AMRESCO  with  respect  to
itself  and  its  Subsidiaries and that  has  been  furnished  by
AMRESCO  to the Administrative Agent and the Lenders, is complete
and  accurate.  This summary includes the insurer's or  insurers'
name(s),  policy  number(s),  expiration  date(s),  amount(s)  of
coverage,  type(s)  of coverage, and deductibles.   This  summary
also  includes  similar information, and describes any  reserves,
relating to any self-insurance program that is in effect.

       Section  6.22.   Solvency.    (i)  Immediately  after  the
consummation of the transactions to occur on the date hereof  and
immediately  following  the refinancing  of  amounts  outstanding
under  the Existing Credit Agreement hereunder and the making  of
each  Loan or Advance, if any, made on the date hereof, and after
giving  effect  to  the  application  of  the  proceeds  of  such
refinancing  and Loans and Advances, (a) the fair  value  of  the
assets  of AMRESCO and its Subsidiaries on a consolidated  basis,
at  a  fair  valuation,  will exceed the debts  and  liabilities,
subordinated,  contingent  or  otherwise,  of  AMRESCO  and   its
Subsidiaries  on  a  consolidated basis;  (b)  the  present  fair
saleable value of the Property of AMRESCO and its Subsidiaries on
a consolidated basis will be greater than the amount that will be
required  to  pay  the  probable liability  of  AMRESCO  and  its
Subsidiaries  on  a consolidated basis on their debts  and  other
liabilities, subordinated, contingent or otherwise, as such debts
and  other  liabilities become absolute and matured; (c)  AMRESCO
and  its Subsidiaries on a consolidated basis will be able to pay
their   debts   and  liabilities,  subordinated,  contingent   or
otherwise,  as  such  debts and liabilities become  absolute  and
matured;  and  (d) AMRESCO and its Subsidiaries on a consolidated
basis  will  not have unreasonably small capital  with  which  to
conduct  the  businesses  in  which  they  are  engaged  as  such
businesses  are  now conducted and are proposed to  be  conducted
after the date hereof.

           (ii)  AMRESCO does not intend to, or to permit any  of
its  Subsidiaries to, and does not believe that it or any of  its
Subsidiaries  will, incur debts beyond its ability  to  pay  such
debts  as  they  mature, taking into account the  timing  of  and
amounts  of cash to be received by it or any such Subsidiary  and
the  timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.

      Section 6.23.  Lend Lease Agreement.   The copy of the Lend
Lease  Agreement delivered to the Lenders is a true  and  correct
copy  thereof,  and,  as  of  the date  hereof,  the  Lend  Lease
Agreement is in full force and effect, is not in default, has not
been  modified or amended and is enforceable against all  parties
thereto in accordance with its terms.

     Section 6.24.  Licenses.   Borrowers and Guarantors possess,
and  are  materially in compliance with all requirements  and  in
good standing under, all licenses, permits, franchises, consents,
authorizations  and exemptions required by any Legal  Requirement
or  otherwise  necessary to conduct their respective  businesses,
including without limitation, to the extent required or necessary
for the operation of any Borrower's or Guarantor's business on  a
basis  comparable to its operations as currently  conducted,  all
licenses and authorizations necessary to participate as a  lender
under  the programs of the Federal National Mortgage Association,
the  Federal  Home  Loan  Mortgage  Corporation,  the  Government
National   Mortgage  Association  and  the  U.S.  Small  Business
Administration  (collectively, the "Federal  Lending  Programs"),
and  all  licenses contemplated to be transferred to  Lend  Lease
under the Lend Lease Agreement, except for violations (other than
with  respect  to  such  licenses and  authorizations  under  the
Federal  Lending Programs or those intended to be transferred  to
Lend  Lease) that would not (either individually or collectively)
have  a  material  adverse effect on the financial  condition  or
operations of any Borrower or any Guarantor.

     Section 6.25.  Servicing Rights.   Borrowers, Guarantors and
all  other  Subsidiaries are materially in  compliance  with  all
servicing  agreements and contracts to which any  of  them  is  a
party, and no default exists on their part thereunder that  could
result   in  a  replacement  or  termination  of  the  applicable
Borrower,   Guarantor  or  other  Subsidiary  as  servicer.    No
Borrower, Guarantor or other Subsidiary has received notice that,
or  otherwise  has  actual knowledge that, the trustee  or  other
applicable  party under any such servicing agreement or  contract
intends to replace, or to terminate the rights and interests  of,
such Borrower, Guarantor or Subsidiary as servicer thereunder.

                           ARTICLE VII

                            COVENANTS

      During the term of this Agreement, and until full and final
payment of all the Notes and Obligations and termination  of  the
Revolving Commitment, unless the Required Lenders shall otherwise
consent in writing:

      Section  7.1.    Financial Reporting.   Each Borrower  will
maintain,  for itself and each of its Subsidiaries, a  system  of
accounting  established  and  administered  in  accordance   with
generally accepted accounting principles, and AMRESCO, for itself
and  on  behalf  of the other Borrowers, the Guarantors  and  its
other Subsidiaries, will furnish to Administrative Agent and each
of the Lenders:

           (i)   Within  95  days  after the  close  of  each  of
AMRESCO's  fiscal years, an unqualified audit report certified by
independent   certified   public   accountants   acceptable    to
Administrative  Agent,  prepared  in  accordance  with  Agreement
Accounting  Principles on a consolidated and consolidating  basis
(consolidating   statements  need  not  be  certified   by   such
accountants) for AMRESCO and each of its Subsidiaries,  including
balance  sheets as of the end of such period, related profit  and
loss and reconciliation of surplus statements, and a statement of
cash  flows, setting forth in each case in comparative  form  the
figures  as  of  the  end  of and for the previous  fiscal  year,
accompanied   by   any  management  letter   prepared   by   said
accountants.

           (ii)  Within 50 days after the last day of each fiscal
quarter,  for  AMRESCO  and  its Subsidiaries,  consolidated  and
consolidating  unaudited balance sheets as at the close  of  each
such  period and consolidated and consolidating profit  and  loss
and  reconciliation of surplus statements and a statement of cash
flows  for  such  fiscal  quarter and for  the  period  from  the
beginning  of the current fiscal year to the end of  such  fiscal
quarter, all certified by an Authorized Accounting Officer.

           (iii)      Within 25 days after the last day  of  each
calendar   month,   for   AMRESCO  and  its   Subsidiaries,   the
consolidated and consolidating unaudited balance sheets as of the
end  of such month, and income statements for such month and  for
the  period from the beginning of the current fiscal year to  the
end  of  such  month,  all certified by an Authorized  Accounting
Officer.

          (iv) INTENTIONALLY OMITTED.

           (v)   Together with the financial statements  required
under  Sections 7.1(i), (ii) and (iii), a compliance  certificate
in  substantially the form of Exhibit B signed by  an  Authorized
Officer   of  AMRESCO  showing  the  calculations  necessary   to
determine  compliance with this Agreement, and  stating  that  no
Default or Event of Default exists, or if any Default or Event of
Default exists, stating the nature and status thereof.

           (vi) As soon as available, but in any event within  50
days  after the end of each fiscal quarter of AMRESCO, a Residual
Interests Report.

          (vii)     As soon as available, but in any event within
50  days  after  the end of each fiscal quarter  of  AMRESCO,  an
organizational  chart  of  AMRESCO and  all  of  its  direct  and
indirect  Subsidiaries,  and  if a new  Subsidiary  is  reflected
thereon, separate written notification thereof, together with  an
updated  Schedule  6  listing all Excluded Subsidiaries  and  the
investments of AMRESCO or any of its Subsidiaries in the Excluded
Subsidiaries.

          (viii)    Within 25 days after the end of each calendar
month,  an  Interest Rate Exposure Report as of the last  day  of
such month.

           (ix) On or before the 25th day of each calendar month,
certified  calculations  of  the Borrowing  Base  (including  the
respective  Borrowing Base for the Revolving Credit Facility  and
the   Term  Loan  Facilities  after  the  Transition  Date)   and
compliance  with  the Borrowing Base Coverage  Ratio(s)  required
under  Section  7.24.4  as of the last  day  of  the  immediately
preceding calendar month, in the form of Schedules 10, 11, or 12,
as  applicable,  certified  by an Authorized  Accounting  Officer
(each a "Borrowing Base Certificate").

           (x)  As soon as available, but in any event within  50
days after the end of each fiscal quarter of AMRESCO, a report in
form acceptable to Administrative Agent detailing any loans which
had  been  sold or securitized by any Borrower, any Guarantor  or
any  other Subsidiary, but which were repurchased by such  Person
if  the amount of such loans so repurchased exceeds $2,000,000 in
the  aggregate during such quarter, together with an  explanation
of the reasons for such required repurchases.

           (xi) As soon as available, but in any event within  25
days  after  the  end of each calendar month,  a  Permitted  Debt
Report   and   Certification,  a  Pledged  Asset   Schedule   and
Certification,  a  delinquency report  in  form  satisfactory  to
Administrative Agent showing the amount and number of  loans  (on
an  aggregate basis) which have been originated, acquired  and/or
securitized  by  any  Borrower or any Subsidiary  (but  excluding
loans  contained in Managed Asset Portfolios) and are  past  due,
have  been determined to be uncollectible and charged off or  are
involved in a bankruptcy.

           (xii)      As soon as possible and in any event within
10  days  after  AMRESCO  knows that  any  Reportable  Event  has
occurred  with  respect to any Plan, a statement,  signed  by  an
Authorized  Officer of AMRESCO, describing said Reportable  Event
and  the  action  which  AMRESCO proposes to  take  with  respect
thereto.

           (xiii)    As soon as possible and in any event  within
10  days after receipt by any Borrower, a copy of (a) any  notice
or claim to the effect that AMRESCO or any of its Subsidiaries is
or  may be liable to any Person as a result of the release by any
Borrower,  any  of its Subsidiaries, or any other Person  of  any
toxic  or hazardous waste or substance into the environment,  and
(b)  any  notice alleging any violation of any federal, state  or
local  environmental,  health  or safety  law  or  regulation  by
AMRESCO or any of its Subsidiaries, which, in either case,  could
reasonably be expected to have a Material Adverse Effect.

           (xiv)     Promptly upon the furnishing thereof to  the
shareholders  of  AMRESCO,  copies of all  financial  statements,
reports and proxy statements so furnished.

           (xv)  Promptly upon the filing thereof, copies of  all
registration statements and annual, quarterly, monthly  or  other
regular  reports filed by or on behalf of AMRESCO or any  of  its
Subsidiaries with the Securities and Exchange Commission.

           (xvi)      On or before the 25th day of each  calendar
month,  an  updated  description of the  Assigned  Loans  in  the
Structured  Real  Estate Portfolio, and the unfunded  commitments
with respect thereto, in the form of Schedule 14, together with a
report detailing any amendments, modifications or waivers  to  or
regarding  any  Assigned  Loan  in  the  Structured  Real  Estate
Portfolio, the effect of which is to extend the maturity or  date
for  any  principal  payment thereon, or to reduce  or  otherwise
restructure the amount or timing of any payment thereon.

             (xvii)       Such   other   information   (including
non-financial information) as the Administrative Agent  may  from
time  to time reasonably request, including without limitation  a
listing  of  all  assets  in the Managed Asset  Portfolios  (such
listing not to be requested more often than once in each calendar
month  if  no  Default  or Event of Default  has  occurred),  and
information regarding Warehouse Lines and other Indebtedness, and
the renewal or refinancing thereof.

      Section  7.2.    Use  of  Proceeds.    The  Borrowers   and
Guarantors  will,  and  will cause each Subsidiary  to,  use  the
proceeds  of the Credit Facilities for the purposes set forth  in
Section 2.1 and as represented in Section 6.11 and each Borrowing
Notice.   The  Borrowers  will not,  nor  will  they  permit  any
Guarantor or other Subsidiary to, use any of the proceeds of  the
Credit  Facilities  to purchase or carry any "margin  stock"  (as
defined in Regulation U) or to make any Acquisition.

      Section  7.3.    Notice  of Default and  Material  Matters.
AMRESCO  will  give prompt notice in writing to  the  Lenders  of
(a)  the  occurrence of any Default or Event of Default, (b)  any
information  received or known by any Borrower or  any  Guarantor
regarding  the non-renewal or failure to extend or refinance  any
Warehouse  Line  or  other Indebtedness of any  Borrower  or  any
Guarantor  that is necessary for the operations of such  Borrower
or  Guarantor,  (c)  any information received  or  known  by  any
Borrower or any Guarantor regarding the default by or replacement
of   any  Borrower,  Guarantor  or  other  Subsidiary  under  any
servicing  agreement to which it is a party, (d) the  termination
of  any licensing of any applicable Borrower, Guarantor or  other
Subsidiary  under any Federal Lending Program, or any information
received or known by any Borrower or any Guarantor regarding  any
noncompliance by any applicable Borrower or Guarantor  under,  or
any  corrective actions or measures, or status changes taken with
respect  to  any  applicable Borrower  or  Guarantor  under,  any
Federal  Lending Program, (e) the occurrence of  any  default  or
breach under, or any termination of, the Lend Lease Agreement, or
receipt  of notice regarding same, and (f) any other development,
financial    or   otherwise   (including,   without   limitation,
developments  with  respect to Year 2000 Problems),  which  could
reasonably be expected to have a Material Adverse Effect.

      Section  7.4.   Conduct of Business.   The Borrowers  will,
and  will  cause  each Subsidiary to, carry on  and  conduct  its
business in a substantially similar manner and in a substantially
similar  field of enterprise as it is presently conducted,  other
than  as  contemplated  under the Lend Lease  Agreement,  or  the
Specified  Asset  Release Agreement, or in  connection  with  the
liquidation  and termination of the Discontinued Operations,  and
to  do  all  things  necessary  to remain  duly  incorporated  or
organized,  validly  existing and (to  the  extent  such  concept
applies   to  such  entity)  in  good  standing  as  a   domestic
corporation,  partnership  or limited liability  company  in  its
jurisdiction  of incorporation or organization, as the  case  may
be,  and  maintain all requisite authority to own and  lease  its
Property  and conduct its business in each jurisdiction in  which
its Property is located or its business is conducted.

      Section 7.5.   Taxes.   The Borrowers will, and will  cause
each  Subsidiary  to,  timely file complete  and  correct  United
States  federal  and  applicable foreign,  state  and  local  tax
returns  required by law and pay when due all taxes,  assessments
and  governmental  charges and levies  upon  it  or  its  income,
profits  or  Property, except those which are being contested  in
good  faith by appropriate proceedings and with respect to  which
adequate  reserves  have  been  set  aside  in  accordance   with
Agreement   Accounting  Principles.   At  any   time   that   any
Subsidiary is organized as a limited liability company, each such
limited  liability  company  will  qualify  for  partnership  tax
treatment under United States federal tax law.

      Section  7.6.   Insurance.   The Borrowers will,  and  will
cause  all  Subsidiaries to, maintain with financially sound  and
reputable insurance companies insurance on all their Property  in
such  amounts and covering such risks as is consistent with sound
business   practice  or  is  customarily  carried  by  businesses
similarly  situated, and AMRESCO will furnish  to  Administrative
Agent  or  any  Lender upon request full information  as  to  the
insurance carried.

      Section 7.7.   Compliance with Laws.   The Borrowers  will,
and  will cause the Subsidiaries to, comply with all laws, rules,
regulations,  orders, writs, judgments, injunctions,  decrees  or
awards  to which any of them it may be subject, including without
limitation  all  Environmental Laws, except  to  the  extent  the
failure to so comply alone or in the aggregate would not  have  a
Material Adverse Effect.

      Section  7.8.   Maintenance of Properties.   The  Borrowers
will, and will cause the Subsidiaries to, do all things necessary
to  maintain, preserve, protect and keep their Property  in  good
repair,  working order and condition, and make all necessary  and
proper  repairs, renewals and replacements so that  its  business
carried  on in connection therewith may be properly conducted  at
all times.

      Section  7.9.   Inspection.   The Borrowers will, and  will
cause  the  Subsidiaries to, permit the Administrative Agent  and
the Lenders, by their respective representatives and agents, with
reasonable  notice,  to inspect any of the  Property,  books  and
financial  records  of  the Borrowers and  all  Subsidiaries,  to
examine  and  make  copies of the books  of  accounts  and  other
financial  records  of  any Borrower or any  Subsidiary,  and  to
discuss the affairs, finances and accounts of any Borrower or any
Subsidiary  with,  and to be advised as to  the  same  by,  their
respective officers at such reasonable times and intervals as the
Administrative  Agent  or  any  Lender  may  designate.   Without
limiting  the  foregoing, Administrative Agent  may  conduct,  or
cause  to  be  conducted by its consultants and/or  attorneys,  a
review of the assets comprising the Borrowing Base, including the
valuation thereof, and the validity and priority of the  Lenders'
Liens with respect thereto, provided that unless a Default or  an
Event  of Default has occurred, any such review and valuation  by
consultants (except for legal review) shall not be performed more
frequently than once in any calendar quarter.

     Section 7.10.  Dividends; Purchase of Stock.   The Borrowers
will not, and they will not permit any Subsidiary to, declare  or
pay  any dividends or make any distributions on the capital stock
of  any  Borrower or any Subsidiary (other than dividends payable
in  its  own  capital stock) or redeem, repurchase  or  otherwise
acquire  or  retire  any capital stock of  any  Borrower  or  any
Subsidiary  at  any time outstanding, except that any  Subsidiary
may declare and pay dividends or make distributions to a Borrower
or  a Guarantor, and AMRESCO may issue Permitted Preferred Stock.
Neither  AMRESCO  nor any other Borrower, any Guarantor,  or  any
Subsidiary  shall  purchase  any of the  stock  or  other  equity
securities of AMRESCO.

      Section 7.11.  Indebtedness.   The Borrowers will not,  nor
will  they  permit any Subsidiary to, create, incur or suffer  to
exist any Indebtedness, except the following:

          (a)  The Loans and other Obligations hereunder.

           (b)   Indebtedness existing on the  date  hereof,  all
which  existing Indebtedness (other than (i) trade  payables  and
(ii)  Contingent Obligations that are not reasonably quantifiable
by  Borrowers)  is described in Schedule 8, and any  renewals  or
extensions   of  such  Indebtedness,  or  refinancing   of   such
Indebtedness  in  comparable  amounts  and  on  comparable  terms
generally.

          (c)  Indebtedness arising under Rate Hedging Agreements
related  to  the  operations  of the  Borrowers  and  Guarantors,
provided  that  any such Rate Hedging Agreements  are  unsecured,
except  for  (i) cash collateral deposits securing  Rate  Hedging
Obligations other than those under the Facility Foreign  Currency
Exchange  Agreements,  in a maximum amount  of  $10,000,000,  and
(ii)  Liens  in favor of an FX Lender or any other Lender  or  an
Affiliate of a Lender, securing Rate Hedging Obligations owed  to
such  Lender (or its Affiliate) pursuant to the terms hereof  and
of the Security Documents.

          (d)  Warehouse Lines.

          (e)  Trade payables of the Borrowers and the Guarantors
and  their  Subsidiaries  incurred  in  the  ordinary  course  of
business  which  are due and payable, and are  customarily  paid,
within sixty (60) days of the incurrence thereof.

           (f)   Contingent Obligations in the form of  indemnity
obligations or typical repurchase obligations related to the sale
by  any  Borrower (other than AMRESCO) or any Guarantor of assets
in   the   ordinary  course  of  its  business,   including   the
securitization of loans which are expressly permitted hereunder.

      Section  7.12.  Mergers and Consolidations.   The Borrowers
will  not, and they will not permit any Subsidiary to,  merge  or
consolidate  with  or  into  any  other  Person,  except  that  a
Subsidiary  may  merge into a Borrower or a  Guarantor,  or  into
another  Person which also becomes a "Borrower" or a  "Guarantor"
under this Agreement and delivers all Loan Documents required  by
this Agreement and otherwise complies with Section 5.1.3, and  an
Excluded  Subsidiary may merge into a similar  type  of  Excluded
Subsidiary, and in the case of a consolidation or merger  by  any
Subsidiary that is not a Borrower into a Borrower, the applicable
Borrower will remain the direct or indirect owner of all  of  the
outstanding  capital  stock and other equity  securities  of  the
continuing or surviving corporation.

     Section 7.13.  Sale of Assets.   The Borrowers will not, and
they  will not permit any Guarantor or any Subsidiary to,  lease,
sell  or otherwise dispose of their Property to any other Person,
except:

           (a)   Sales  or settlements of Assigned Loans  or  any
other  loans  or indebtedness owned or held by any Subsidiary  of
AMRESCO or any other Borrower in the orderly liquidation  of  the
assets of the Discontinued Operations, the proceeds of which  are
paid  to  Administrative  Agent for the  benefit  of  Lenders  as
provided in Section 2.2.2 and Section 5.7.2;

           (b)   Sales of Mortgaged Properties or any other  real
estate  owned by any Subsidiary of AMRESCO or any other  Borrower
in  the  orderly  liquidation of the assets of  the  Discontinued
Operations,  the  proceeds of which are  paid  to  Administrative
Agent for the benefit of the Lenders as provided in Section 2.2.2
and Section 5.7.2.

           (c)  Sale of the assets under and pursuant to the Lend
Lease  Agreement,  subject  to  Sections  2.2.1(a)  and  (b)  and
Section 5.7.5 and  and other provisions hereof;

           (d)   Sales  of Assigned Loans in the Structured  Real
Estate  Portfolio,  subject to Sections 2.2.1(c)  and  5.7.4  and
other applicable provisions of this Agreement; and

           (e)  Sale of assets contemplated in, and in accordance
with  the  terms  of, this Agreement described  in  Section  5.7,
including  without  limitation,  (i)  sales  of  assets  of   the
Subsidiaries  engaged in Continuing Operations  in  the  ordinary
course  of  business,  and (ii) sales of assets  covered  by  the
Specified Asset Release Agreement, the proceeds of which are paid
to Administrative Agent for the benefit of Lenders as provided in
Section 2.2.

Except  with  respect  to  sales permitted  under  the  foregoing
clauses  (a)  through (e), no Borrower, Guarantor  or  Subsidiary
shall  sell,  lease,  abandon  or otherwise  transfer  all  or  a
material part of its assets to any Person, in one or a series  of
related transactions.
 .
     Section 7.14.  Investments and Acquisitions.   The Borrowers
will  not,  and they will not permit any Subsidiary to,  make  or
suffer  to  exist any Investments (including without  limitation,
loans and advances to, and other Investments in, Subsidiaries  or
in  partnerships or joint ventures), or commitments therefor,  or
to  create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition  of  any
Person, except:

          (a)  Cash Equivalent Investments.

           (b)   Existing  Investments in  domestic  Subsidiaries
(whether  or  not  evidenced by Inter-Company  Notes)  and  other
Investments  in  existence on the date hereof  and  described  in
Schedule 9-A, and Investments made after the date hereof  in  the
ordinary  course  of  business in existing domestic  Subsidiaries
that  are  Borrowers  or  Guarantors.  Schedule  9-B  contains  a
description, including the principal face amount and  outstanding
principal balance, of each Inter-Company Note in existence on the
date hereof.

           (c)   Investments in (including the creation  of)  new
domestic Subsidiaries in the ordinary course of business so  long
as  the business of any such new Subsidiary is in the same  lines
of  business  of  the Borrowers and Guarantors,  as  approved  by
Administrative Agent, and such new Subsidiary becomes a  Borrower
(or  a  Guarantor  if not legally permitted  to  be  a  Borrower)
pursuant  to  Section 5.1.3, except in the case of  new  Excluded
Subsidiaries  formed  as  bankruptcy  -  remote  special  purpose
entities  formed in connection with the securitization of  assets
by Subsidiaries engaged in Continuing Operations.
 .
           (d)   Existing  Investments  in  Foreign  Subsidiaries
described  on  Schedule 9-A and which are  evidenced  by  Foreign
Subsidiary  Inter-Company Notes that have been duly  assigned  to
and  delivered  to Administrative Agent for the  benefit  of  the
Lenders,  and  Investments made after the date  hereof  only  for
operating  expenses of existing Foreign Subsidiaries incurred  in
the  ordinary  course  of  business.   Schedule  9-B  contains  a
description, including the principal face amount and  outstanding
principal balance, of each Foreign Subsidiary Inter-Company Note.

           (e)  The funding of the unfunded loan commitments  and
cost  overruns  of  AMRESCO Commercial Finance Inc.  and  AMRESCO
Funding  Canada  Inc.  in respect of the Assigned  Loans  in  the
Structured  Real Estate Portfolio, the amounts of  such  unfunded
commitments on the date hereof being as set forth on Schedule 14.

          (f)  The funding of the unfunded loan commitments, cost
overruns and expenses incurred in the ordinary course of business
with  respect to such assets of any Borrower or Guarantor related
to the Assigned Loans in the Managed Asset Portfolios.

           (g)   The  making and funding of loans in the ordinary
course   of  business  by  Borrowers  or  Guarantors   or   other
Subsidiaries that are in the business of lending money  to  other
Persons.

          (h)  The MIC Notes, and any other loans in an aggregate
amount not exceeding $1,500,000 to any employees of Borrowers  or
Guarantors or any Subsidiaries to facilitate relocations  or  for
other purposes.

                    (i)  The Lend Lease Holdback Note.

           (j)   Any promissory note issued to AMRESCO or another
Borrower as specifically permitted in the Specified Asset Release
Agreement, subject to the terms thereof.

      Notwithstanding  the  foregoing,  in  no  event  shall  any
Investment  permitted pursuant to this Section 7.14 be  permitted
if  (i)  there  shall  exist a Default or Event  of  Default,  or
(ii)  if  after  giving effect to any such Investment,  Borrowers
shall not be in compliance with any covenant set forth herein  or
in the other Loan Documents.

     Section 7.15.  Liens.   (a) The Borrowers will not, nor will
they  permit any Subsidiary to, create, incur, or suffer to exist
any  Lien  in,  of,  or on the Property of the Borrowers  or  the
Guarantors or any Subsidiary, except:

           (i)   Liens  for  taxes, assessments  or  governmental
charges or levies on their Property if the same shall not at  the
time be delinquent or thereafter can be paid without penalty,  or
are  being contested in good faith and by appropriate proceedings
and  for  which  adequate reserves in accordance  with  Agreement
Accounting Principles shall have been set aside on their books.

            (ii)   Liens  imposed  by  law,  such  as  carriers',
warehousemen's  and  mechanics' liens  and  other  similar  liens
arising  in the ordinary course of business which secure  payment
of  obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for  which
adequate reserves shall have been set aside on their books.

           (iii)      Liens  arising out of pledges  or  deposits
under worker's compensation laws, unemployment insurance, old age
pensions,  or  other social security or retirement  benefits,  or
similar legislation.

           (iv) Utility easements, building restrictions and such
other encumbrances or charges against real property as are  of  a
nature generally existing with respect to properties of a similar
character  and  which  do  not in any  material  way  affect  the
marketability  of the same or interfere with the use  thereof  in
the business of AMRESCO or its Subsidiaries.

           (v)   Liens  existing on the date hereof and  securing
Indebtedness described in Schedule 8, as such Liens are described
in Schedule 8.

            (vi)   Liens  in  favor  of  the  Lenders,   or   the
Administrative  Agent  for the benefit of  the  Lenders,  granted
pursuant to this Agreement or any Security Document.

           (vii)      Liens on the Collateral in favor of  an  FX
Lender  (and  all  Lenders upon the making  of  any  Advance  for
Settlement  Payments) securing Rate Hedging Obligations  owed  to
such Lender; Liens on the Collateral in favor of any Lender or an
Affiliate of a Lender securing any other Rate Hedging Obligations
owed  to  any  such Lender or Affiliate of a Lender (which  Liens
shall  be  subordinate to those in favor of Lenders securing  the
Credit   Facilities);  and  Liens  on  cash  collateral  deposits
securing  other  Rate  Hedging  Obligations  as  permitted  under
Section 7.11(c).

          (viii)    The Permitted Encumbrances.

            (ix)  With  respect  to  computer  and  other  office
equipment or inventory,

                 (A)   landlord's Liens arising  in
                       the  ordinary course of any Borrower's or any
                       Subsidiary's business, and

                 (B)   Purchase money liens in  the
                       ordinary course of business.

          (x)  Liens securing Warehouse Lines.

          (xi) Liens involuntarily filed against any asset of any
Borrower  or  any Subsidiary, provided, that within fifteen  (15)
days after such filing, the applicable Borrower or Subsidiary has
obtained  a release of any such Lien or is contesting the  filing
of such Lien in good faith and an adequate bond has been obtained
to satisfy in full any claim which such Lien secures.

     (b)  Borrowers shall not, and Borrowers shall not permit any
Subsidiary  (except  Excluded Subsidiaries) to,  enter  into  any
agreement  (excluding this Agreement or any other Loan Documents)
prohibiting  the  creation or assumption of  any  Lien  upon  any
Property,  revenues, or assets of such Person, whether now  owned
or  hereafter acquired, except (i) agreements in existence on the
date hereof under the terms of Indebtedness in effect on the date
hereof  described  in  Schedule 8 and the collateral  pledged  as
security  therefor,  (ii)  such limitations  as  are  imposed  by
applicable  law  (including  without  limitation  Small  Business
Association   regulations  applicable  to  AMRESCO   Independence
Funding,  Inc.),  and  (iii) such other agreements  as  to  which
Administrative Agent receives prior written notice and  that  are
on  terms  acceptable to Administrative Agent  in  its  sole  and
absolute discretion.

      Section  7.16.  Year 2000.   AMRESCO shall promptly  notify
Lenders  in  writing  in  the event of any  potential  Year  2000
Problem.   Such  written  notice shall specify  and  describe  in
detail  the  nature  of  the  Year  2000  Problem,  including   a
description of the equipment or systems involved, and  the  event
causing such Year 2000 Problem.

      Section  7.17.  Affiliates.   Borrowers will not, and  will
not   permit  any  Subsidiary  to,  enter  into  any  transaction
(including,  without  limitation, the purchase  or  sale  of  any
Property  or  service) with, or make any payment or transfer  to,
any  Affiliate  except  in the ordinary course  of  business  and
pursuant   to  the  reasonable  requirements  of  the  applicable
Borrower's  or Subsidiary's business and upon fair and reasonable
terms no less favorable to such Borrower or such Subsidiary  than
such  Borrower  or such Subsidiary would obtain in  a  comparable
arms-length transaction.

      Section  7.18.  Subordinated Indebtedness.   The  Borrowers
will  not,  and  will  not  permit any Subsidiary  to,  make  any
amendment  or  modification  to  the  indenture,  note  or  other
agreement  evidencing or governing any Subordinated Indebtedness,
or  directly  or  indirectly voluntarily prepay,  defease  or  in
substance  defease,  purchase,  repurchase,  redeem,  retire   or
otherwise  acquire, any Subordinated Indebtedness; provided  that
the  entering into of a  contract pursuant to which  AMRESCO  has
the  right  to   purchase or otherwise acquire a portion  of  the
Subordinated Indebtedness after the Revolving Credit  Termination
Date shall not be a violation of this Section 7.18 so long as  no
purchases,  repurchases  or  other acquisitions  of  Subordinated
Indebtedness  in respect thereof are made until  full  and  final
payment  of  the  Obligations and termination  of  the  Revolving
Credit Facility and this Agreement.

      Section  7.19.   Lend  Lease Agreement.    The  Lend  Lease
Agreement  shall  not be modified or amended in any  manner  that
affects the financial terms thereof in any manner adverse  as  to
the sellers thereunder, or that affects in any way the provisions
hereof  related  to the Lend Lease Agreement,  or  in  any  other
material  respect,  without prior notice to Administrative  Agent
and  the  Lenders and consent of the Required Lenders.  Borrowers
shall  promptly  deliver  to Administrative  Agent  any  and  all
amendments,  modifications  or  supplements  to  the  Lend  Lease
Agreement  (regardless of whether the Required  Lenders'  consent
was  required  therefor), and any notices  of  default  or  other
material notification received or sent by the sellers thereunder.
Each  Borrower  and each Guarantor that is a party  to  the  Lend
Lease  Agreement  shall  comply with  the  terms  and  provisions
thereof  and will take all reasonable actions, and will  use  its
best  faith  efforts,  to  close  the  transactions  contemplated
thereby  as  soon as possible.  On the Lend Lease  Closing  Date,
Borrowers  shall  deliver to Administrative  Agent  the  original
executed  Lend  Lease Holdback Note, together  with  an  executed
allonge endorsement in blank for such note.

       Section   7.20.   Servicing  Agreement.    The   Servicing
Agreement  entered into with respect to the servicing of  certain
assets of certain Subsidiaries after the Lend Lease Closing  Date
shall be substantially in the form attached as an exhibit to  the
Lend  Lease Agreement, and such Servicing Agreement shall not  be
modified   in  any  material  respect,  nor  shall  the  Servicer
thereunder  be  replaced, without the consent  of  Administrative
Agent.   On  the  Lend Lease Closing Date, the  Borrowers  and/or
Guarantors  party  to the Servicing Agreement shall  collaterally
assign  their  rights and benefits thereunder  to  Administrative
Agent,  for  the benefit of the Lenders pursuant to a  collateral
assignment  in  form  and  substance  reasonably  acceptable   to
Administrative Agent, and consented to by the Servicer.

      Section 7.21.  Contingent Obligations.   The Borrowers will
not,  nor  will they permit any Subsidiary to, make or suffer  to
exist  any  Contingent Obligation (including, without limitation,
any  Contingent Obligation with respect to the obligations  of  a
Subsidiary, except (i) by endorsement of instruments for  deposit
or  collection in the ordinary course of business, (ii)  for  the
Guaranty,  (iii)  those reflected in the notes to  the  financial
statements  delivered  to Lenders as reflected  in  Section  6.4,
(iv)  those permitted by Section 7.11, and (v) litigation  claims
that do not result in an Event of Default under Section 8.1.9.

     Section 7.22.  INTENTIONALLY OMITTED.

      Section 7.23.  Maintenance of Corporate Existence.    Other
than in connection with a consolidation or merger permitted under
Section  7.12 or the dissolution of any Borrower or any Guarantor
of   which  Administrative  Agent  has  been  notified  and   the
distribution  of all of the assets of such Borrower or  Guarantor
to another Borrower or Guarantor, no Borrower or Guarantor shall,
or  permit  any  of its Subsidiaries to, terminate,  or  fail  to
maintain,   its   corporate  existence   or   qualification,   as
applicable,  in  the  state of its incorporation  and  any  other
applicable  jurisdiction  where the business  of  such  Guarantor
requires  such qualification (provided that nothing herein  shall
permit the dissolution of AMRESCO or the failure of each Borrower
to  maintain  its  corporate existence and  qualification  to  do
business  as elsewhere required in this Agreement), or terminate,
or  fail  to  maintain,  its good standing and  qualification  to
transact  business  in  all jurisdictions where  the  failure  to
maintain  its good standing or qualification to transact business
could have a Material Adverse Effect.

     Section 7.24.  Financial Covenants.

           Section 7.24.1.     Minimum Consolidated Tangible  Net
Worth.   Borrowers  shall  not at any  time  permit  Consolidated
Tangible  Net  Worth to be less than (a) $180,000,000  until  the
date (the "Change Date") that is the earlier to occur of March 1,
2000,  and  the  first  day of the calendar month  following  the
calendar  month in which the Lend Lease Closing Date occurs,  and
(b)   from   and   after  the  Change  Date,   the   greater   of
(i)  $320,000,000  and (ii) the sum of (x)  93%  of  Consolidated
Tangible  Net  Worth  on  the  Change  Date,  plus  (y)  90%   of
Consolidated  Net  Income (without deduction if Consolidated  Net
Income  is  less  than $0.00) for each calendar month  commencing
from and after the Change Date, plus (z) 100% of the net proceeds
(i.e.  gross proceeds less reasonable and customary closing costs
and  expenses)  of  any  issuance of  equity  securities  by  any
Borrowers on or after the Change Date (exclusive of equity issued
to  the CLC Earnout Recipients as an "earnout" in connection with
the CLC Transaction).

           Section  7.24.2.     Leverage Ratio.  Borrowers  shall
not,  at  any  time,  permit the ratio of (a) Total  Consolidated
Indebtedness    (including   without    duplication    Contingent
Obligations)  to  (b)  Consolidated Tangible  Net  Worth,  to  be
greater  than  (a)  8.75 to 1.00 prior to the  Change  Date,  and
(b) 4.00 to 1.00 from and after the Change Date.

           Section 7.24.3.     Interest/Dividend Coverage  Ratio.
Borrowers  shall not permit the Interest/Dividend Coverage  Ratio
to  be less than (a) on December 31, 1999, .80 to 1.00, (b)  from
January  1, 2000 though January 31, 2000, .85 to 1.00,  (c)  from
February  1,  2000 through February 29, 2000, 1.30 to  1.00,  and
(d) from and after March 1, 2000, 1.35 to 1.00.

           Section   7.24.4.      Borrowing  Base   Requirement.
Borrowers shall not permit the Borrowing Base Coverage Ratio  (as
indicated on Schedules 10, 11 and 12, as applicable) to  be  less
than (a) 1.05 to 1.00 prior to and on the Transition Date for all
the  Credit  Facilities as calculated pursuant  to  Schedule  10,
(b)  1.25  to  1.00 after the Transition Date for  the  Revolving
Credit  Facility as calculated pursuant to Schedule 11, (c)  2.00
to  1.00 after the Transition Date through March 30, 2000 for the
Term  Loan Facilities as calculated pursuant to Schedule  12,  or
(d)  4.00 to 1.00 from and after March 31, 2000 for the Term Loan
Facilities as calculated pursuant to Schedule 12.

              Section     7.24.5.        Covenant     Adjustment.
Administrative Agent shall have the right at any time  after  the
SREP Sale Date, in its sole discretion, to modify and adjust  any
of  the  financial covenants in this Section 7.24, to the  extent
and  in  a manner such that the new terms are comparable to  such
covenants  as now in effect after taking into account any  change
in  Borrowers'  financial position as a result of the  SREP  Sale
Date  having  occurred; provided that any such adjustments  shall
not  impose less restrictive requirements on Borrowers and  shall
not  be made in order to pre-empt or prevent the occurrence of  a
Default  or an Event of Default.  Any such modifications  to  the
provisions  of  Sections 7.24.1, 7.24.2,  7.24.3  and/or  7.24.4,
shall  become  effective  upon notice thereof  by  Administrative
Agent to AMRESCO and the Lenders.

     Section 7.25.  Investment Company.   The Borrowers will, and
will cause each Subsidiary which is an "investment company" or  a
company  "controlled"  by  an "investment  company",  within  the
meaning  of  the Investment Company Act of 1940, as  amended  (15
U.S.C.A.  80a, et. seq.) (the "Investment Company Act") or  which
is  otherwise  subject to the Investment Company  Act  to  be  in
compliance  with  the Investment Company Act, including,  without
limitation, 15 U.S.C.A.  80a-18(f)(1).

      Section  7.26.   Exceptions  to  Covenants.    Neither  any
Borrower  nor any Guarantor shall take or permit to be taken  any
action  or fail to take any action which is permitted by  any  of
the  covenants  contained in this Agreement  if  such  action  or
omission  would  result  in  the breach  of  any  other  covenant
contained in this Agreement.

     ARTICLE VIII

                      DEFAULTS AND REMEDIES

      Section 8.1.   Events of Default.   The occurrence  of  any
one  or more of the following conditions, circumstances or events
shall constitute an Event of Default:

           Section 8.1.1. Any representation or warranty made  or
deemed made by or on behalf of any Borrower, any Guarantor or any
Subsidiary to the Lenders or the Administrative Agent under or in
connection  with  this Agreement, any other  Loan  Document,  any
Loan,  or  any certificate or information delivered in connection
with this Agreement or any other Loan Document shall be, or prove
to  have been untrue in any material respect when made or  deemed
to have been made or delivered.

            Section   8.1.2.      Nonpayment  when  due  of   any
principal  of any Loan or Note, or of interest upon any  Loan  or
Note, or of any commitment fee or any other amount payable on any
of  the Credit Facilities, or any other Obligations under any  of
the Loan Documents.

            Section  8.1.3.  The  breach  by  any  Borrower,  any
Guarantor  or  any  other  Subsidiary of  any  of  the  terms  or
provisions  of  Sections 7.2, 7.3, 7.4, 7.9,  7.10,  7.11,  7.12,
7.13,  7.14, 7.15, 7.17, 7.18, 7.19, 7.20, 7.21, 7.22,  7.23,  or
7.24;  or any breach by AMRESCO of the terms and requirements  of
Section  7.1  that  is not cured within three (3)  Business  Days
after the occurrence thereof.

           Section  8.1.4.  The  breach by any  Borrower  or  any
Guarantor  (other  than a breach which constitutes  an  Event  of
Default under another Section of this Article VIII) of any of the
terms  or provisions of this Agreement or any other Loan Document
which  is not remedied within ten (10) days after written  notice
from  the Administrative Agent or any Lender; provided,  that  if
such  breach  can be cured and such Borrower or Guarantor  begins
and is diligently pursuing a cure thereof prior to the expiration
of  the  ten (10) day cure period above provided, then  Borrowers
shall not be in default hereunder if such failure is cured within
twenty (20) days after the above provided written notice of  such
breach.

            Section  8.1.5.  Failure  of  any  Borrower  or   any
Subsidiary  or  any  Guarantor to pay when due  any  Indebtedness
aggregating  in excess of $250,000 ("Material Indebtedness");  or
the default by any Borrower or any Subsidiary or any Guarantor in
the  performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in
any  agreement  under  which any such Material  Indebtedness  was
created  or  is  governed,  or any other  event  shall  occur  or
condition  exist,  the  effect  of  which  default  or  event  or
condition is to cause, or to permit the holder or holders of such
Material  Indebtedness  to cause, such Material  Indebtedness  to
become  due  prior  to  its  stated  maturity;  or  any  Material
Indebtedness shall be declared to be due and payable or  required
to be prepaid or repurchased (other than by a regularly scheduled
payment)  prior to the stated maturity thereof; or a  payment  or
purchase  by AMRESCO or any Subsidiary, or, subject to the  terms
of  Section  7.18,  the  approval of the board  of  directors  of
AMRESCO or any Subsidiary for the payment or purchase, of amounts
under  any  Subordinated  Indebtedness or  publicly  held  senior
unsecured debt in excess of the regularly scheduled payments,  or
which  would  otherwise  cause  a violation  by  AMRESCO  or  any
Subsidiary of any covenant or condition contained in any  of  the
Loan Documents.

           Section 8.1.6. Any Borrower or any Subsidiary  or  any
Guarantor shall (i) have an order for relief entered with respect
to  it  under the Federal bankruptcy laws as now or hereafter  in
effect,  (ii)  make an assignment for the benefit  of  creditors,
(iii)  apply  for,  seek,  consent  to,  or  acquiesce  in,   the
appointment   of   a  receiver,  custodian,  trustee,   examiner,
liquidator or similar official for it or any Substantial  Portion
of  its Property, (iv) institute any proceeding seeking an  order
for  relief under the Federal bankruptcy laws as now or hereafter
in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking  dissolution,  winding  up, liquidation,  reorganization,
arrangement, adjustment or composition of it or its  debts  under
any  law relating to bankruptcy, insolvency or reorganization  or
relief  of  debtors or fail to file an answer or  other  pleading
denying  the  material allegations of any such  proceeding  filed
against  it,  (v) consent to or acquiesce in any such  proceeding
against  it,  (vi) not pay, or admit in writing its inability  to
pay,  its  debts  generally as they become due,  (vii)  take  any
corporate or partnership or company action to authorize or effect
any of the foregoing actions set forth in this Section 8.1.6,  or
(viii)  fail  to  contest  in  good  faith  any  appointment   or
proceeding described in Section 8.1.7.

           Section  8.1.7. Without the application,  approval  or
consent  of  any Borrower or any Subsidiary, or any Guarantor,  a
receiver, trustee, examiner, liquidator or similar official shall
be  appointed for a  Borrower or any Subsidiary or any  Guarantor
or  any  Substantial  Portion of such Person's   Property,  or  a
proceeding  described in Section 8.1.6(iv)  shall  be  instituted
against any Borrower or any Subsidiary or any Guarantor and  such
appointment  continues undischarged or such proceeding  continues
undismissed or unstayed for a period of 60 consecutive days.

           Section  8.1.8. Any court, government or  governmental
agency  shall  condemn, seize or otherwise appropriate,  or  take
custody or control of, all or any portion of the Property of  any
Borrower,  any  Subsidiary  or any Guarantor  which,  when  taken
together   with   all  other  Property  of  the  Borrowers,   the
Subsidiaries,   and   the   Guarantors  so   condemned,   seized,
appropriated,  or  taken  custody  or  control  of,  during   the
twelve-month  period  ending with the month  in  which  any  such
action occurs, constitutes a Substantial Portion.

           Section  8.1.9.  Any Borrower or any Subsidiary  shall
fail  within thirty (30) days to pay, bond or otherwise discharge
one  or more (i) judgments or orders for the payment of money  in
excess of $500,000 (or the equivalent thereof in currencies other
than Dollars) in the aggregate, or (ii) non-monetary judgments or
orders  which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, which judgment(s),
in  any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.

           Section  8.1.10.     The Unfunded Liabilities  of  all
Single  Employer Plans shall exceed in the aggregate $100,000  or
any Reportable Event shall occur in connection with any Plan.

          Section 8.1.11.     Any Borrower or any other member of
the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal  liability  to
such  Multiemployer Plan in an amount which, when aggregated with
all  other amounts required to be paid to Multiemployer Plans  by
such  Borrower  or  any other member of the Controlled  Group  as
withdrawal  liability  (determined  as  of  the  date   of   such
notification), exceeds $500,000 or requires payments exceeding  $
250,000 per annum.

          Section 8.1.12.     Any Borrower or any other member of
the Controlled Group shall have been notified by the sponsor of a
Multiemployer   Plan   that  such  Multiemployer   Plan   is   in
reorganization  or  is being terminated, within  the  meaning  of
Title  IV  of  ERISA,  if as a result of such  reorganization  or
termination  the aggregate annual contributions of the  Borrowers
and  the other members of the Controlled Group (taken as a whole)
to  all  Multiemployer Plans which are then in reorganization  or
being  terminated have been or will be increased over the amounts
contributed  to such Multiemployer Plans for the respective  plan
years  of each such Multiemployer Plan immediately preceding  the
plan year in which the reorganization or termination occurs by an
amount exceeding $100,000.

           Section 8.1.13.     Any Borrower, any Guarantor or any
Subsidiary  shall  (i)  be  the  subject  of  any  proceeding  or
investigation  pertaining to the release  by  any  Borrower,  any
Guarantor,  any Subsidiary or any other Person of  any  toxic  or
hazardous   waste   or   substance  into  the   environment,   or
(ii)  violate  any Environmental Law, which, in the  case  of  an
event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect.

          Section 8.1.14.     Any Change in Control shall occur.

           Section 8.1.15.     The occurrence of any "default" or
"event  of default", as defined in any Loan Document (other  than
this  Agreement) or the breach of any of the terms or  provisions
of  any  Loan Document (other than this Agreement), which default
or breach continues beyond any period of grace therein provided.

            Section  8.1.16.      Nonpayment  by  the  applicable
Borrower, Guarantor or Subsidiary of any Rate Hedging Obligations
(including  without  limitation pursuant to  a  Facility  Foreign
Exchange  Agreement)  when due or the  breach  by  any  Borrower,
Guarantor  or  Subsidiary  of any term,  provision  or  condition
contained  in  any Rate Hedging Agreement, and the expiration  of
any applicable cure period.

           Section 8.1.17.     Any Guaranty shall fail to  remain
in  full  force  or  effect  or any  action  shall  be  taken  to
discontinue  or  to assert the invalidity or unenforceability  of
any  Guaranty, or any Guarantor shall fail to comply with any  of
the  terms or provisions of any Guaranty to which it is a  party,
or  any  Guarantor  shall deny that it has any further  liability
under  any Guaranty to which it is a party, or shall give  notice
to such effect.

          Section 8.1.18.     Any Security Document shall for any
reason  fail  to  create  a  valid and perfected  first  priority
security  interest  in  any collateral purported  to  be  covered
thereby,  except  as  permitted by  the  terms  of  any  Security
Document, or any Security Document shall fail to remain  in  full
force or effect or any action shall be taken to discontinue or to
assert   the  invalidity  or  unenforceability  of  any  Security
Document, or any Borrower or Guarantor shall fail to comply  with
any of the terms or provisions of any Security Document.

      It  is  understood  and agreed by each  Borrower  and  each
Guarantor  that  any of the foregoing "Events of  Default"  shall
constitute an Event of Default under each of the Notes, and  that
such  "Events of Default" are cumulative and in addition  to  any
defaults or events of default contained in any of the other  Loan
Documents,   and  that  in  the  event  of  any  discrepancy   or
inconsistency  between  any Event of Default  hereunder  and  any
default or event of default contained in any other Loan Document,
the  description  of  the Event of Default  stated  herein  shall
control.

      Section 8.2.   Remedies .  Upon the occurrence of an  Event
of  Default, Administrative Agent may, and  at the direction  and
election of the Required Lenders shall, acting by or through  any
of  its agents, trustees or other Persons, without notice (unless
expressly provided for herein), demand or presentment (including,
without  limitation,  notice  of default,  notice  of  intent  to
accelerate  or  of acceleration) all of which are hereby  waived,
and  in addition to any other provision of this Agreement or  any
other Loan Document, exercise any or all of the following rights,
remedies and recourses:

          (a)  Terminate the Lenders' commitment to make Advances
hereunder and declare the unpaid principal balance of each of the
Notes,  the  accrued and unpaid interest thereon  and  any  other
accrued  but  unpaid portion of the Obligations to be immediately
due  and  payable, without notice (expressly including,  but  not
limited to, notice of default, notice of intent to accelerate  or
of acceleration), except any notice that is expressly required by
the  terms  of  this Agreement, presentment, protest,  demand  or
action  of  any  nature  whatsoever,  each  of  which  hereby  is
expressly  waived by each Borrower and Guarantor, to  the  extent
permitted  by  applicable law, whereupon the  same  shall  become
immediately  due and payable.  Notwithstanding the  foregoing  or
anything  to the contrary contained herein or in any  other  Loan
Document, upon the occurrence of an Event of Default described in
Section 8.1.6 or 8.1.7 by or with respect to any Borrower or  any
Guarantor  or any Subsidiary of AMRESCO, the Revolving Commitment
shall  terminate and the entire unpaid principal balance  of  the
Notes,  and all accrued, unpaid interest thereon, and  all  other
Obligations,  shall automatically be accelerated and  immediately
be  due and payable in full, without notice (expressly including,
but not limited to, notice of default, intent to accelerate or of
acceleration),  presentment, protest, demand  or  action  of  any
nature  whatsoever, each of which hereby is expressly  waived  by
each  Borrower  and  each Guarantor, to the extent  permitted  by
applicable   law;   provided,  however,   that   if   accelerated
automatically pursuant to this sentence, the Notes and  all  such
indebtedness may be reinstated at the option and upon the written
approval of the Required Lenders.

           (b)   Enter upon the Mortgaged Property or  any  other
Collateral  or  any  part thereof and take  exclusive  possession
thereof  and of all books, records and accounts relating thereto.
If  any Borrower or any Guarantor remains in possession of all or
any  part of the Collateral after an Event of Default occurs  and
is  continuing  and without Administrative Agent's prior  written
consent  thereto,  Administrative Agent may invoke  any  and  all
legal  remedies  to dispossess such Borrower or  such  Guarantor,
including  specifically one or more actions  for  declaratory  or
injunctive relief, forcible entry and detainer, trespass  to  try
title  and  writ  of  restriction.   Nothing  contained  in   the
foregoing  sentence shall, however, be construed  to  impose  any
greater  obligation or any prerequisites to acquiring  possession
of  the  Collateral or any part thereof after an Event of Default
occurs than would have existed in the absence of such sentence.

           (c)  Hold, lease, manage, operate or otherwise use  or
permit the use of the Mortgaged Property, the Assigned Loans  and
all other Collateral, or any part thereof, either by itself or by
other  Persons, in such manner, for such time and upon such other
terms  as  Administrative  Agent  may  deem  to  be  prudent  and
reasonable   under  the  circumstances  (making   such   repairs,
alterations,  additions and improvements thereto and  taking  any
and  all other action with reference thereto, from time to  time,
as  Administrative Agent shall deem necessary or desirable),  and
apply  all  proceeds  from the Mortgaged Property,  the  Assigned
Loans  and  all  other  Collateral  in  connection  therewith  in
accordance with the provisions of Section 8.10.

          (d)  Sell or offer for sale the Collateral, or any part
thereof,  in  such portions, order and parcels as  Administrative
Agent   may  determine,  with  or  without  having  first   taken
possession  of  same, in accordance with the  provisions  of  the
applicable Loan Documents and applicable Legal Requirements.

            (e)    Make  application  to  a  court  of  competent
jurisdiction,  as  a  matter  of  strict  right  and,  except  as
otherwise  provided  by  applicable law, without  notice  to  any
Borrower  or Guarantor or without regard to the adequacy  of  the
Collateral   for  the  payment  of  the  Obligations,   for   the
appointment of a receiver of the Collateral, or any part thereof,
and, to the extent permitted by applicable law, each Borrower and
each   Guarantor   does  hereby  irrevocably  consent   to   such
appointment.   Any such receiver shall have all the usual  powers
and  duties  of  receivers in similar cases, including  the  full
power to rent, maintain, sell, dispose and otherwise operate  the
Collateral,  or  any part thereof, upon such terms  that  may  be
approved  by  the court, and shall apply all proceeds  from  such
operation of the Collateral in accordance with the provisions  of
Section 8.10.

           (f)   Exercise any and all other rights, remedies  and
recourses granted hereunder or under the other Loan Documents  or
otherwise now or hereafter existing in equity, at law, by  virtue
of statute or otherwise.

     Section 8.3.   Rights of Set-Off .

           (a)   In addition to the Lenders' Liens, each Borrower
and  each  Guarantor hereby expressly grant to  the  Lenders  the
right  of setoff against all deposits and other sums at any  time
held or credited by or due from any Lender to any Borrower or any
Guarantor, in accordance with the provisions of this Section 8.3.
The  rights of each Lender under this Section 8.3 are in addition
to  other  rights  and  remedies (including, without  limitation,
other rights of setoff under law or equity) which such Lender may
have under law or by agreement.

           (b)  Upon the occurrence and during the continuance of
any  Event  of Default, each Lender is hereby authorized  at  any
time  and  from time to time, to the fullest extent permitted  by
law,  at  its  option,  without  notice  or  demand  and  without
liability, to set off and apply any and all deposits (general  or
special,   time  or  demand,  provisional  or  final,  excepting,
however,  any  fiduciary or escrow accounts  established  by  any
Borrower  or  any  Guarantor into which only funds  of  unrelated
third-parties are deposited, and provided that such  Borrower  or
such  Guarantor has informed such Lender and Administrative Agent
of  the  nature  of such accounts) at any time  held,  and  other
indebtedness  at  any time owing, by any Lender  to  or  for  the
credit  or  the account of any Borrower or any Guarantor  against
any  and  all of the Obligations now or hereafter existing  under
this  Agreement, the Notes and the other Loan Documents, in  such
order  and manner as such Lender may determine, subject, however,
to  the  agreements  contained  in Section  9.18,  regardless  of
whether  such  Lender  shall  have made  any  demand  under  this
Agreement  or  the  Notes and although such  obligations  may  be
unmatured.

           (c)   Each Borrower and each Guarantor agree,  to  the
fullest  extent  it may effectively do so under  applicable  law,
that each Lender and any holder of a participation in any of  the
Notes  (with the appropriate consent of such Lender) may exercise
rights of setoff or counterclaim and other rights with respect to
such  participation as fully as if such holder of a participation
were a direct creditor of such Borrower or such Guarantor in  the
amount of such participation.

       Section   8.4.     Remedies  Cumulative,  Concurrent   and
Non-Exclusive .  Administrative Agent and Lenders shall have  all
rights, remedies and recourses granted in the Loan Documents, and
available  at law or equity and the same (a) shall be  cumulative
and  concurrent,  (b) may be pursued separately, successively  or
concurrently against any Borrower or any Guarantor, or any others
obligated under any of the Notes, or against any one or  more  of
them,  at the sole discretion of Administrative Agent and/or  the
Lenders,  (c) may be exercised as often as the occasion  therefor
shall  arise, it being agreed by each Borrower and each Guarantor
that the exercise or failure to exercise any of the same shall in
no  event be construed as a waiver or release thereof or  of  any
other right, remedy or recourse, and (d) are intended to be,  and
shall be, non-exclusive.

      Section 8.5.   No Conditions Precedent to Exercise Remedies
 .   Each Borrower, each Guarantor and each other Person hereafter
obligated  for payment or fulfillment of all or any part  of  the
Obligations shall not, except as otherwise provided by applicable
law,  be relieved of such obligation by reason of (a) the failure
of  a  trustee  to  comply with any request of  any  Borrower  or
Guarantor  or  any  other Person so obligated, to  foreclose  the
Lenders'  Liens  or  to  enforce  any  provisions  of  the   Loan
Documents, (b) the release, regardless of consideration,  of  any
Person  obligated  with  respect to the Obligations,  or  of  the
Collateral  or  any part thereof, or the addition  of  any  other
property  to  the  Collateral, (c) any agreement  or  stipulation
between any subsequent owner of the Collateral and Administrative
Agent  or any Lender extending, renewing, rearranging or  in  any
other way modifying the terms of the Loan Documents without first
having  obtained  the consent of, given notice  to  or  paid  any
consideration  to  such Borrower, such Guarantor  or  such  other
Person, and in such event, each Borrower, each Guarantor and  all
such  other Persons shall continue to be liable to make  payments
in   accordance  with  the  terms  of  any  such   extension   or
modification  agreement unless expressly released and  discharged
in  writing  by  the  Required Lenders (or  all  the  Lenders  if
required  under  Section  11.3),  and  (d)  any  other   act   or
occurrence, save and except the complete indefeasible payment  of
the  Obligations.   Each Borrower and each  Guarantor  waive  any
right  to require Lenders or the Administrative Agent to  proceed
against  any other Person, exhaust any Collateral, or pursue  any
other  remedy  in  Administrative Agent's or the Lenders'  power.
All   dealings   between  any  Borrower  or  any  Guarantor   and
Administrative Agent or any Lender, whether or not  resulting  in
the  creation of the Obligations, shall conclusively be  presumed
to   have  been  had  or  consummated  upon  reliance  upon  this
Agreement.    Each   Borrower  and  each   Guarantor   authorizes
Administrative  Agent and the Lenders, without notice  or  demand
and without any reservation of rights against any Borrower or any
Guarantor  and without affecting liability hereunder  or  on  the
Obligations,  from  time to time, to (i) renew,  extend  for  any
period,  accelerate, modify, compromise, settle, or  release  the
obligation of any other Person that may be obligated with respect
to  any  or all of the Obligations or Collateral; (ii)  take  and
hold any other property as collateral, other than the Collateral,
for  the  payment of any or all of the Obligations, and exchange,
enforce, waive, and release any or all of the Collateral or other
property; and (iii) after the occurrence of an Event of  Default,
apply  the Collateral or other property and direct the  order  or
manner  of  sale  thereof in accordance with the  terms  of  this
Agreement and the Security Documents.

      Section 8.6.   Release of and Resort to Collateral  .   The
release  or  substitution of all or any part of  the  Collateral,
regardless of consideration, shall not in any way impair, affect,
subordinate,  or  release the Lenders' Liens or their  status  as
first  and  prior Liens in and to any remaining Collateral.   For
payment and performance of the Obligations, Lenders may resort to
any  other security therefor held by a trustee in such order  and
manner as Required Lenders may elect.

      Section  8.7.   Waivers .  To the full extent permitted  by
law,  each  Borrower  and each Guarantor hereby  irrevocably  and
unconditionally  waive  and release (a) all  benefit  that  might
accrue  to any Borrower or any Guarantor by virtue of any present
or  future law exempting the Collateral from attachment, levy  or
sale  on execution or providing for any appraisement, evaluation,
stay  of  execution, exemption from civil process, redemption  or
extension  of  time  for  payment,  (b)  except  as  specifically
provided  for  herein, all notices of any  Default  or  Event  of
Default  or of any trustee's or Lenders' election to exercise  or
his  or  their actual exercise of any right, remedy  or  recourse
provided  for  under  the Loan Documents,  (c)  any  right  to  a
marshalling of assets with respect to this Agreement,  the  Notes
or the Facility Letters of Credit or any of the Collateral or any
Indebtedness  of  any Borrower or any Guarantor,  or  a  sale  in
inverse  order  of  alienation and  (d)  except  as  specifically
provided for herein, any and all right to receive demand,  grace,
notice, presentment for payment, protest, notice of intention  to
accelerate  the  Obligations or notice  of  acceleration  of  the
Obligations.

      Section  8.8.   Discontinuance of Proceedings  .   In  case
Administrative  Agent shall have proceeded to invoke  any  right,
remedy  or recourse permitted under the Loan Documents and  shall
thereafter  elect to discontinue or abandon same for any  reason,
Administrative Agent shall have the unqualified right  to  do  so
and, in such event, each Borrower, each Guarantor and the Lenders
shall  be restored to their former positions with respect to  the
Obligations,  the Loan Documents, the Collateral  and  otherwise,
and  the rights, remedies, recourses and powers of Administrative
Agent  and  Lenders  shall continue as if  same  had  never  been
invoked.

      Section 8.9.   Power of Attorney .  Each Borrower and  each
Guarantor hereby irrevocably appoint Administrative Agent, acting
for  all  the  Lenders, as the true and lawful attorney  of  such
Borrower  or such Guarantor with full power of substitution  for,
and  on  behalf of such Borrower and such Guarantor, and  in  its
name,  upon the request and instruction of such Borrower or  such
Guarantor  and in any event after the occurrence of an  Event  of
Default  (or prior to the occurrence of any Event of  Default  if
Administrative   Agent  otherwise  reasonably  believes   it   is
necessary  to take such action), to take any action to  preserve,
maintain,  protect  or enforce the rights and interests  of  such
Borrower  or  such  Guarantor  with respect  to  the  Collateral,
including, without limitation, to (a) endorse any Assigned  Loans
to  Administrative Agent, on behalf of Lenders, or to  any  other
Person,  (b)  enforce,  cure any default or  otherwise  act  with
respect  to any leases, sales contracts, management or  marketing
contracts or any other agreements pertaining to or affecting  any
of the Mortgaged Properties, (c) take all such action and execute
all  such  documents as Administrative Agent deems  necessary  or
desirable  to  operate or preserve or protect the Assigned  Loans
and  the collateral therefor, any Mortgaged Property or any other
Collateral, (d) sue for, demand or collect any sums owing to  any
Borrower  or  any  Guarantor under the Assigned  Loans  or  under
leases  or  other  agreements  affecting  any  of  the  Mortgaged
Properties  and  (e)  exercise rights  of  any  Borrower  or  any
Guarantor  under any purchase agreement related to  any  Assigned
Loan.   The  power so vested in Administrative Agent  under  this
Section  8.9  is  one  coupled with  an  interest  and  shall  be
irrevocable,  except  by written instrument executed  jointly  by
each  Borrower, each Guarantor and Administrative Agent and filed
for  record  in the Office of the County Clerk of Dallas  County,
Texas.  Notwithstanding the foregoing, Administrative Agent shall
be under no obligation to exercise any of the foregoing rights or
take  any  action necessary to preserve any right  in  any  asset
subject  to  the  Lenders' Liens against any  other  Person,  and
Administrative  Agent,  to  the extent  permitted  herein  or  by
applicable law, may exercise any of the foregoing rights  without
incurring any responsibility or liability to any Borrower or  any
other Person and without in any way affecting the Obligations  or
any  other  obligations  of  any Borrower  or  any  Guarantor  to
Lenders.  Borrowers and Guarantors, jointly and severally,  agree
to reimburse Administrative Agent and Lenders upon demand for any
costs  and  expenses,  including, without limitation,  reasonable
attorneys'  fees and collection costs, that Administrative  Agent
or  any Lender may incur while acting as the attorney-in-fact  of
Borrowers  and Guarantors as provided hereunder (or  pursuant  to
the  attorney-in-fact herein created), all  of  which  costs  and
expenses shall be included in the Obligations.
      Section  8.10.  Application of Proceeds .  All payments  on
the  Notes  or  in respect of the Facility Letters of  Credit  or
otherwise  on  the  Credit Facilities received by  Administrative
Agent  or any Lender during the existence of an Event of Default,
and  the proceeds of any sale or disposition of, and all proceeds
generated by the holding, leasing, operation or other use of, the
Collateral, or any part thereof, during the existence of an Event
of  Default  and  upon  the exercise of the Lenders'  rights  and
remedies  hereunder  or  under any of the other  Loan  Documents,
shall  be applied to the Obligations by the Administrative Agent,
the  applicable trustee or the receiver, if one is appointed,  to
the  extent  that funds are so available therefrom, as determined
by the Required Lenders (subject to Section 11.3(iv) and provided
that,  as  among  themselves, the Administrative  Agent  and  the
Lenders  agree  that  any  such  proceeds  shall  be  applied  as
contemplated by Article IX).

                           ARTICLE IX

                    THE ADMINISTRATIVE AGENT

     Section 9.1.   Appointment; Nature of Relationship.   Bank
of America  is hereby appointed by each of the Lenders as its
contractual representative hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein
and in the other Loan Documents.  The Administrative Agent agrees
to act as such contractual representative upon the express
conditions contained in this Article IX.  Notwithstanding the use
of the defined term "Administrative Agent," it is expressly
understood and agreed that the Administrative Agent shall not
have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual
representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan
Documents.  In its capacity as the Lenders' contractual
representative, the Administrative Agent (i) does not hereby
assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-
105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the
other Loan Documents.  Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency
theory or any other theory of liability for breach of fiduciary
duty, all of which claims each Lender hereby waives.

     Section 9.2.   Powers.   The Administrative Agent shall have
and may exercise such powers under the Loan Documents as are
specifically delegated to the Administrative Agent by the terms
of each thereof, together with such powers as are reasonably
incidental thereto.  The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders
to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Administrative
Agent.

     Section 9.3.   General Immunity.   Neither the
Administrative Agent nor any of its directors, officers, agents
or employees shall be liable to any Borrower, any Guarantor, the
Lenders or any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except to the extent such action
or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.

     Section 9.4.   No Responsibility for Loans, Recitals, etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor
under any Loan Document, including, without limitation, any
agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered
solely to the Administrative Agent; (d) the existence or possible
existence of any Default or Event of Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any
Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or
(g) the financial condition of any Borrower or Guarantor or of
any of the Borrowers' or Guarantors' respective Subsidiaries.
The Administrative Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by any
Borrower to the Administrative Agent at such time, but is
voluntarily furnished by any Borrower to the Administrative Agent
(either in its capacity as Administrative Agent or in its
individual capacity).

     Section 9.5.   Action on Instructions of Lenders.   The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions
signed by the Required Lenders (unless the consent of more than
the Required Lenders is required pursuant to Section 11.3, in
which case the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written
instructions signed by the Lenders required by such Section), and
such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.  The Lenders
hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the
Required Lenders.  The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against
any and all liability, cost and expense (other than any
liability, cost or expense resulting from its gross negligence or
willful misconduct) that it may incur by reason of taking or
continuing to take any such action.

     Section 9.6.   Employment of Agents and Counsel.   The
Administrative Agent may execute any of its duties as
Administrative Agent hereunder and under any other Loan Document
by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or
securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.  The Administrative Agent
shall be entitled to advice of counsel concerning the contractual
arrangement between the Administrative Agent and the Lenders and
all matters pertaining to the Administrative Agent's duties
hereunder and under any other Loan Document.

     Section 9.7.   Reliance on Documents; Counsel.   The
Administrative Agent shall be entitled to rely upon any Note,
notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or
persons, and, in respect of legal matters, upon the opinion of
counsel selected by the Administrative Agent, which counsel may
be employees of the Administrative Agent.

     Section 9.8.   Administrative Agent's Reimbursement and
Indemnification.   The Lenders agree to reimburse and indemnify
the Administrative Agent ratably in proportion to their
respective Aggregate  Loan Percentages (i) for any amounts not
reimbursed by the Borrowers for which the Administrative Agent is
entitled to reimbursement by the Borrowers under the Loan
Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with
the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation,
for any expenses incurred by the Administrative Agent in
connection with any dispute between the Administrative Agent and
any Lender or between two or more of the Lenders) and (iii) for
any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind and nature whatsoever which may be imposed on, incurred
by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Administrative Agent
in connection with any dispute between the Administrative Agent
and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any
such other documents, provided that (i) no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or
willful misconduct of the Administrative Agent, IT BEING
EXPRESSLY UNDERSTOOD AND AGREED THAT ADMINISTRATIVE AGENT SHALL
HAVE THE RIGHT TO BE AND SHALL BE INDEMNIFIED FOR ITS NEGLIGENCE
(SOLE, COMPARATIVE, CONTINGENT OR OTHERWISE), and (ii) any
indemnification required pursuant to Section 3.5(vii) shall,
notwithstanding the provisions of this Section 9.8, be paid by
the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 9.8 shall
survive payment of the Obligations and termination of this
Agreement.

     Section 9.9.   Notice of Default.   The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or
a Borrower referring to this Agreement describing such Default or
Event of Default and stating that such notice is a "notice of
default".

     Section 9.10.  Rights as a Lender.   In the event the
Administrative Agent is a Lender, the Administrative Agent shall
have the same rights and powers hereunder and under any other
Loan Document with respect to its Commitment and its Loans as any
Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall,
at any time when the Administrative Agent is a Lender, unless the
context otherwise indicates, include the Administrative Agent in
its individual capacity.  The Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction,
in addition to those contemplated by this Agreement or any other
Loan Document, with any Borrower or any of its Subsidiaries in
which such Borrower or Subsidiary is not restricted hereby from
engaging with any other Person.  The Administrative Agent, in its
individual capacity, is not obligated to remain a Lender.

     Section 9.11.  Lender Credit Decision.   Each Lender
acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Lead Arranger or any other Lender
and based on the financial statements prepared by the Borrowers
and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents.  Each Lender
also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Lead Arranger or any
other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.

     Section 9.12.  Successor Administrative Agent.   The
Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and AMRESCO, such resignation to be
effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative
Agent gives notice of its intention to resign.  The
Administrative Agent may be removed at any time with or without
cause by written notice received by the Administrative Agent from
the Required Lenders, such removal to be effective on the date
specified by the Required Lenders.  Upon any such resignation or
removal, the Required Lenders shall have the right to appoint, on
behalf of the Lenders, a successor Administrative Agent.  If no
successor Administrative Agent shall have been so appointed by
the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign,
then the resigning Administrative Agent may appoint, on behalf of
the Lenders, a successor Administrative Agent.  Notwithstanding
the previous sentence, the Administrative Agent may at any time
without the consent of the Borrowers or any Lender, appoint any
of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder.  If the Administrative Agent has
resigned or been removed and no successor Administrative Agent
has been appointed, the Lenders may perform all the duties of the
Administrative Agent hereunder and the Borrowers shall make all
payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders.
No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted
the appointment.  Any such successor Administrative Agent shall
be a Lender that is a commercial bank having capital and retained
earnings of at least $100,000,000.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the resigning or removed
Administrative Agent.  Upon the effectiveness of the resignation
or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents.  After
the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article IX shall
continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent hereunder and
under the other Loan Documents.  In the event that there is a
successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 9.12, then the term "Corporate
Base Rate" as used in this Agreement shall mean the prime rate,
base rate or other analogous rate of the new Administrative
Agent.

     Section 9.13.  Administrative Agent's Fee.  The Borrowers
agree to pay to the Administrative Agent, for its own account,
the fees agreed to by the Borrowers and the Administrative Agent
pursuant to that certain letter agreement dated November 24,
1999, or as otherwise agreed from time to time.

     Section 9.14.  Delegation to Affiliates.   The Borrowers and
the Lenders agree that the Administrative Agent may delegate any
of its duties under this Agreement to any of its Affiliates.  Any
such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which
the Administrative Agent is entitled under Article IX and
Section 11.6.

     Section 9.15.  Execution of Security Documents.   The
Lenders hereby empower and authorize the Administrative Agent to
execute and deliver to the Borrowers and the Guarantors, or any
of them, on their behalf the Security Documents and all related
financing statements and any financing statements, agreements,
documents or instruments as shall be necessary or appropriate to
effect the purposes of the Security Documents.

     Section 9.16.  Collateral Releases; Lender Consents;
Amendments, etc.   The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to AMRESCO, the other
Borrowers and the Guarantors, or any of them, for and on behalf
of the Lenders any and all agreements, notices, letters,
documents or instruments as shall be necessary or appropriate to
effect (a) any releases of Collateral which are permitted by the
terms hereof or of any other Loan Document or which shall
otherwise have been approved by the Required Lenders (or, if
required by the terms of Section 11.3, all of the Lenders), or
(b) any consents, approvals, waivers, amendments or supplements
relating to the Loan Documents or the Credit Facilities as
permitted to be given by Administrative Agent hereunder or under
another Loan Document, or which shall have been agreed to by the
Required Lenders (or if required by the terms of Section 11.3,
all of the Lenders), it being expressly agreed that
Administrative Agent may deliver the consent required to be
delivered by the Lenders on the Lend Lease Closing Date as a
condition to such closing, as attached as Exhibit J to the Lend
Lease Agreement, so long as the conditions set forth in
Section 5.7.5 for the Lenders' consent and the release of
Collateral for such transaction have been satisfied.

     Section 9.17.  Co-Agents and Arrangers.   Neither any of the
Lenders identified in this Agreement as a "co-agent" (if any), or
"syndication agent" nor the Lead Arranger shall have any right,
power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of such Lenders nor the Lead
Arranger shall have or be deemed to have a fiduciary relationship
with any Lender.  Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with
respect to the Administrative Agent in Section 9.11.

     Section 9.18.  Ratable Payments.   If any Lender, whether by
setoff or otherwise, has payment made to it upon its Loans (other
than payments received pursuant to Sections 3.1, 3.2, 3.4, 3.5 or
3.7) in a greater proportion than that received by any other
Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans.
If any Lender, whether in connection with setoff of amounts which
might be subject to setoff or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be
subject to set off, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.  If an
amount to be set off is to be applied to Indebtedness of a
Borrower to a Lender other than Indebtedness comprised of Loans
made by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness comprised of such
Loans.

     Section 9.19.  Proceeds of Collateral.   The Lenders agree,
among themselves, that unless an alternative order of application
among clauses (a) through (e) (treating each clause as a separate
class) is otherwise agreed to by Administrative Agent and the
Required Lenders, all monies collected or received by
Administrative Agent, after the occurrence of an Event of
Default, in respect of the Collateral or otherwise on the
Obligations, directly or indirectly, or by any other means shall
be applied (a) first to all costs of collection or maintenance of
the Collateral, (b) then to the unpaid fees and expenses
(including consultants and attorneys' fees) owing by Borrowers
hereunder, (c) then to interest on and principal of the Loans
(including without limitation all Advances and participations
with respect to Facility Letters of Credit and Facility Foreign
Currency Exchange Agreements), as recommended by  Administrative
Agent and approved by the Required Lenders (except that,
notwithstanding anything herein expressed or implied to the
contrary, any amounts to be applied to interest or principal
shall in all cases, unless all of the Lenders agree otherwise, be
distributed to the Lenders pro rata based on each Lender's
Aggregate Loan Percentage), (d) then to any unreimbursed
Settlement Payments or other Rate Hedging Obligations of any FX
Lender with respect to Facility Foreign Currency Exchange
Agreements, and (e) then, only after payment in full of the
outstanding principal and interest under the Loans and the Credit
Facilities, to any other Rate Hedging Obligations owed to any
Lender or any Affiliate of a Lender under any Rate Hedging
Agreement.

     Section 9.20.  Non-Advancing Lenders.   In the event that a
Revolving Lender shall fail or refuse to advance its Commitment
Percentage of any Advance under the Revolving Credit Facility, or
any Lender shall fail or refuse to advance its share of any
payment or reimbursement by Lenders as required hereunder,
including without limitation any amount to be funded pursuant to
Sections 2.22 or 9.8, when it is obligated to do so (such Lender,
a "non-advancing Lender"), Administrative Agent shall notify, in
the case of the failure or refusal to make an Advance under the
Revolving Credit Facility, the Revolving Lenders, and, in all
other instances, the other Lenders, and such remaining Revolving
Lenders or all other Lenders, as applicable, or any of them, may
elect, at their sole option and discretion (without any
obligation whatsoever to do so), to advance such non-advancing
Lender's portion, pro rata in accordance with the proportion that
(i) in the case of the failure or refusal to make an Advance
under the Revolving Credit Facility, the Commitment Percentage of
each Revolving Lender electing to make such advance bears to the
Commitment Percentages of all Revolving Lenders electing to make
such advance, or (ii) in all other instances, the Aggregate Loan
Percentage of each Lender electing to make such advance bears to
the Aggregate Loan Percentage of all Lenders electing to make
such advance.  Upon making any such advance, and notwithstanding
anything to the contrary expressed or implied herein or in the
Notes or any other Loan Document, all subsequent payments made on
the Revolving Credit Facility, or Term Loan Facilities, as
applicable, and all proceeds realized from the sale of any
Collateral securing the Credit Facilities or from the exercise of
any right of setoff or other remedies under this Agreement or the
other Loan Documents, shall be applied, in the manner described
below, only to Revolving Lenders, or all other Lenders, as
applicable, other than the non-advancing Lender (and the
non-advancing Lender shall not be entitled to receive the same),
until the amounts advanced by such advancing Revolving Lenders,
or all other Lenders, as applicable, on behalf of the
non-advancing Lender (together with the interest earned thereon
pursuant to this Agreement and the applicable Notes), have been
repaid in full.  As among Lenders other than the non-advancing
Lender, Lenders that advanced funds on behalf of the
non-advancing Lender shall receive the portion the non-advancing
Lender would have been entitled to receive had it advanced
(together with the interest earned thereon pursuant to this
Agreement and the applicable Notes), to be applied pro rata in
accordance with the amounts advanced by each such advancing
Lender, until the amounts advanced by such Lenders on behalf of
the non-advancing Lender (together with the interest earned
thereon pursuant to this Agreement and the applicable Notes),
have been repaid in full; any Revolving Lender that advanced only
on its own behalf based on its Commitment Percentage shall be
repaid based on such Revolving Loan Percentage or its Aggregate
Loan Percentage, as applicable.  In addition, any Lenders that
advance funds on behalf of a non-advancing Lender pursuant to
this Section 9.20 shall (i) receive a proportionate share (based
on the amounts so advanced by such Lenders) of the amount the
non-advancing Lender would have been entitled to receive of any
distribution of any Collateral securing the Credit Facilities in
the event the same are distributed among Lenders, and (ii) have a
claim against such non-advancing Lender for the amounts so
advanced and shall be entitled to all rights and remedies at law
or in equity to recover any unpaid amounts.  A non-advancing
Lender shall not be entitled to vote on any matters hereunder or
related to either or both of the Credit Facilities (and its
interest shall be excluded for purposes of determining the
requisite percentage or number of Lenders for a vote) so long as
such Lender remains a non-advancing Lender.

                            ARTICLE X

        BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     Section 10.1.  Successors and Assigns.   The terms and
provisions of the Loan Documents shall be binding upon and inure
to the benefit of the Borrowers, the Guarantors and the Lenders,
and their respective successors and assigns, except that (a) no
Borrower shall have the right to assign any of its rights or
obligations hereunder or under any of the other Loan Documents
without the consent of all the Lenders, and (b) any assignment by
any Lender must be made in compliance with Section 10.3.  The
Administrative Agent may treat the Person which made any Loan or
which holds any Note as the owner thereof for all purposes hereof
unless and until such Person complies with Section 10.3 in the
case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the
Administrative Agent.  Any assignee or transferee of the rights
to any Loan or any Note agrees by acceptance of such transfer or
assignment to be bound by all the terms and provisions of the
Loan Documents.  Any request, authority or consent of any Person,
who at the time of making such request or giving such authority
or consent is the owner of the rights to any Loan shall be
conclusive and binding on any subsequent holder, transferee or
assignee of the rights to such Loan.

     Section 10.2.  Participations.

          Section 10.2.1.  Permitted Participants; Effect.  Any
Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests
in any Note held by such Lender, any interest of such Lender in
Term Loan A or Term Loan B, or the Commitment Amount, if any, of
such Lender, or any other interest or obligation of such Lender
under the Loan Documents (in amounts of not less than $5,000,000,
or a lesser amount with the consent of Administrative Agent).  In
the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of its
Commitment Amount, if any, interests in Term Loan A or Term Loan
B, if any, and all of its Loans, and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrowers under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrowers and the Administrative
Agent and other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under the Loan Documents.

          Section 10.2.2.  Voting Rights.  Each Lender shall
retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any
provision of the Loan Documents; provided that the agreement
between a Lender and any Participant may provide that such
Participant shall be entitled to approve only any amendments,
modifications or waivers reducing the amount of principal of or
the rate of interest payable on any Note in which such
Participant has an interest, extending any scheduled principal
payment date or the date fixed for payment of interest on any
such Note, or extending the Revolving Credit Termination Date or
the Term Loan Facilities Maturity Date, or, except for releases
expressly provided for herein, releases of all or substantially
all of the Collateral.

          Section 10.2.3.  Benefit of Setoff.  Each Participant
shall be deemed to have the right of setoff provided in
Sections 8.3 and 9.18 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if
the amount of its participating interest were owing directly to
it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 8.3
with respect to the amount of participating interests sold to
each Participant.  The Lenders agree to share with each
Participant, and each Participant, by exercising the right of
setoff provided in Section 8.3, agrees to share with each Lender,
any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 9.18
as if each Participant were a Lender.

     Section 10.3.  Assignments.

          Section 10.3.1.  Permitted Assignments.  Any Lender
may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one or more banks,
financial institutions or funds, or other entities (herein, a
"Purchaser") all or any part of its rights and obligations under
the Loan Documents.  Such assignment shall be substantially in
the form of Exhibit C.  The consent of the Administrative Agent
(which shall not be unreasonably withheld) shall be required
prior to an assignment becoming effective with respect to (a) a
Purchaser that is not a Lender, or an Affiliate of a Lender or a
Related Fund, and (b) with respect to an assignment of all or a
portion of the Revolving Credit Facility, Term Loan A, or Term
Loan B without a corresponding assignment in the same proportion
of the assigning Lender's interest in any of the other Credit
Facilities in which it has an interest.  Each such assignment
with respect to a Purchaser which is not a Lender, an Affiliate
of a Lender or a Related Fund shall (unless Administrative Agent
otherwise consents) be in an amount not less than the lesser of
(i) with respect to the Revolving Credit Facility and Term Loan
B, $5,000,000 and with respect to Term Loan A, $2,500,000 or
(ii) the remaining amount of the assigning Lender's Commitment
Amount (calculated as at the date of such assignment) with
respect to the Revolving Credit Facility, or its outstanding
Loans (in the case of Term Loan A or Term Loan B or if the
Revolving Commitment has been terminated).

          Section 10.3.2.  Effect; Effective Date.  Upon
(a) delivery to the Administrative Agent of an assignment, and
subject to any consent required by Section 10.3.1, and
(b) payment of a $3,500 fee paid by the assigning Lender or the
Purchaser to Administrative Agent for processing such assignment
(unless such fee is waived by the Administrative Agent), together
with payment of reasonable legal fees and expenses incurred by
Administrative Agent in connection with such assignment if, and
in the amount, requested by Administrative Agent, such assignment
shall become effective on the effective date specified in such
assignment.  The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to
make its purchase of such interests in the Revolving Credit
Facility and/or either of the Term Loan Facilities, as the case
may be, under the applicable assignment agreement constitutes
"plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA.  On and after the effective
date of such assignment, such Purchaser shall for all purposes be
a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no
further consent or action by Borrowers, the Lenders or the
Administrative Agent shall be required to release the transferor
Lender with respect to the portion of the Credit Facilities
assigned to such Purchaser.  Upon the consummation of any
assignment to a Purchaser pursuant to this Section 10.3.2, the
transferor Lender, the Administrative Agent and the Borrowers
shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender (if applicable) and such
Purchaser, in each case in principal amounts reflecting their
respective Commitment Amounts or Term Loan A Percentage or Term
Loan B Percentage (as applicable) in Term Loan A or Term Loan B
(as applicable), as adjusted pursuant to such assignment.

     Section 10.4.  Dissemination of Information.   Each Borrower
authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan
Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's
possession concerning the creditworthiness of the Borrowers and
their Subsidiaries, including without limitation any information
contained in any Reports; provided that each Transferee and
prospective Transferee agrees to be bound by Section 11.11.

     Section 10.5.  Tax Treatment.   If any interest in any Loan
Document is transferred to any Transferee which is organized
under the laws of any jurisdiction other than the United States
or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer,
to comply with the provisions of Section 3.5(iv).

     Section 10.6.  Federal Reserve Bank.   Notwithstanding
Section 10.1(b) or any other provision of this Agreement, any
Lender may at any time, without the consent of Administrative
Agent or any Borrower, assign and pledge all or any portion of
its Note(s) or any amount outstanding thereunder to any Federal
Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank, and
any Lender that is a fund that invests in bank loans may, without
the consent of the Administrative Agent or the Borrowers, pledge
all or any portion of its Note(s) to any trustee for, or any
other representative of, holders of obligations owed, or
securities issued, by such fund, as security for such obligations
or securities; provided that any foreclosure or similar action by
such trustee shall be subject to the provisions of this Article X
concerning assignments.  Additionally, any Lender that is not a
fund may, with the consent of Administrative Agent, pledge all or
any portion of its Note(s) to any trustee for, or any other
representative of, holders of obligations owed by such Lender, as
security for such obligations; provided that any foreclosure or
similar action by such trustee shall be subject to the provisions
of this Article X concerning assignments.   No such assignment
contemplated under this Section 10.6 shall release the assigning
Lender from its obligations hereunder.

                           ARTICLE XI

                       GENERAL PROVISIONS

       Section   11.1.    Survival  of   Representations.     All
representations and warranties of the Borrowers contained in this
Agreement  shall  survive  the making  of  the  Loans  and  other
extensions of credit herein contemplated.

      Section 11.2.  Notices.   Except as otherwise permitted  by
Section  2.18  with  respect to borrowing notices,  all  notices,
requests and other communications to any party hereunder shall be
in   writing   (including   electronic  transmission,   facsimile
transmission  or  similar writing) and shall  be  given  to  such
party:  (a)  in  the case of any Borrower, any Guarantor  or  any
other  Subsidiary of AMRESCO, in care of AMRESCO, at its  address
or  facsimile number set forth on Schedule 1, and in the case  of
Administrative  Agent,  at its address or  facsimile  number  set
forth  on  Schedule  1, (b) in the case of  any  Lender,  at  its
address or facsimile number set forth on Schedule 1 or (c) in the
case  of any party, at such other address or facsimile number  as
such party may hereafter specify for the purpose by notice to the
Administrative  Agent and the Borrowers in  accordance  with  the
provisions  of this Section 11.2.  Each such notice,  request  or
other  communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number  specified
in  this Section and confirmation of receipt is received, (ii) if
given by mail, 72 hours after such communication is deposited  in
the  mails  with  first  class  postage  prepaid,  addressed   as
aforesaid, or (iii) if sent by Federal Express, the express  mail
service  of  the United States Postal Service or other equivalent
overnight  or  expedited delivery service, upon  the  earlier  of
(A) actual receipt or (B) one (1) Business Day after delivery  to
such  overnight  or expedited delivery service, delivery  charges
prepaid,   and   properly  addressed  to  Administrative   Agent,
Borrowers,  the  applicable Guarantor or the  applicable  Lender,
unless  such notice is delayed or lost by such delivery  service,
in  which case it shall not be deemed given until actual receipt,
or  (iv) if given by any other means, when delivered (or, in  the
case   of  electronic  transmission,  received)  at  the  address
specified  in  this  Section;  provided  that  notices   to   the
Administrative  Agent  under Article II shall  not  be  effective
until  received.   Each Borrower and each Guarantor  acknowledges
and  agrees  that any notice required to be given,  or  otherwise
given, by Administrative Agent or any Lender under this Agreement
or any other Loan Document or any Legal Requirement to all or any
of the Borrowers or Guarantors, shall be deemed given to any such
Borrower or Guarantor if sent to AMRESCO (without any requirement
that  any  such Borrower or Guarantor be expressly referenced  in
such  notice) in the manner provided by this Section  11.2.   Any
Borrower, the Administrative Agent and any Lender may change  the
address  for service of notice upon it by a notice in writing  to
the other parties hereto as provided in clause (c) above.

      Section  11.3.   Amendments;  Lender  Votes  and  Consents.
(a)  Subject to the provisions of this Section 11.3, the Required
Lenders (or the Administrative Agent acting for and on behalf  of
the  Lenders  with the consent of the Required Lenders)  and  the
Borrowers  (and  the  Guarantors if applicable)  may  enter  into
agreements supplemental or related to this Agreement or the other
Loan  Documents  for the purpose of adding to  or  modifying  any
provisions  of  the  Loan  Documents, consenting  to  any  matter
requiring  consent,  or for which Borrowers  request  consent  or
approval,  hereunder,  or changing in any manner  the  rights  or
obligations  of  the  Lenders, the Borrowers  or  the  Guarantors
hereunder,  or  waiving  any requirement,  Default  or  Event  of
Default  hereunder; provided, however, that no such  supplemental
or  related  agreement shall, without the consent of all  of  the
Lenders:

               (i)  Extend the Revolving Credit Termination Date,
the Term Loan Facilities Maturity Date, or the final maturity  of
any  Loan,  or  postpone or reduce the amount  of  any  regularly
scheduled payment of principal on Term Loan A or Term Loan B or a
payment  required  as a result of a mandatory  reduction  of  the
Revolving  Credit  Facility pursuant to Section  2.17.1,  or  any
other required payment of principal of any Loan, or any mandatory
payment  of  principal under Section 2.2, or forgive all  or  any
portion  of the principal amount of any of the Credit Facilities,
or  reduce  the rate of interest or the Applicable Fee  Rate,  or
extend  the  time of payment of interest or fees  on  the  Credit
Facilities  (excluding fees payable solely to the  Administrative
Agent, the Issuing Lender or an FX Lender).

                (ii)  Reduce  the  percentage  specified  in,  or
otherwise change, the definition of Required Lenders.

                (iii)      Increase the amount of  the  Revolving
Commitment  or  of the Commitment Amount of any Revolving  Lender
hereunder.

                (iv) Change the Balancing Ratio or the manner  in
which  payments of principal and interest and other sums  payable
for the benefit of the Lenders under the Credit Facilities are to
be allocated among the Lenders.

                (v)   Permit  any  Borrower or any  Guarantor  to
assign  its  rights or obligations under this  Agreement  or  any
other Loan Document.

               (vi) Amend this Section 11.3.

               (vii)     Release any Borrower or Guarantor  from
its  agreements and obligations hereunder or under the  Notes  or
the Guaranty, as applicable, or, except as provided herein or  in
the   Security  Documents,  in  one  transaction  or  series   of
transactions, release all or substantially all of the Collateral.

          (b)  Notwithstanding the foregoing, any supplemental or
related  agreement  or  modification hereto,  or  other  consent,
approval or vote, relating to the Lend Lease Agreement (including
without  limitation  the  amount and timing  of  the  Lend  Lease
Required  Payment),  to  the  extent  requiring  the  consent  or
approval  of  the  Lenders  shall require  only  the  consent  or
approval of the Required Lenders.

          (c)  Except as provided in this Section 11.3, or in the
case  that  all  Lenders  are  specifically  designated  in   the
applicable  provisions  hereof or of the  other  Loan  Documents,
votes,  approvals and consents of the Lenders shall be determined
by the Required Lenders.

           (d)   No  amendment of any provision of this Agreement
relating  to the Administrative Agent shall be effective  without
the   written   consent   of  the  Administrative   Agent.    The
Administrative Agent may waive payment of the fee required  under
Section  10.3.2 without obtaining the consent of any other  party
to this Agreement.

     Section 11.4.  Governmental Regulations.  Anything contained
in  this  Agreement  to the contrary notwithstanding,  no  Lender
shall be obligated to extend credit to a Borrower in violation of
any  limitation or prohibition provided by any applicable statute
or regulation.

       Section  11.5.   Several  Obligations;  Benefits  of  this
Agreement.   The respective obligations of the Lenders  hereunder
are  several and not joint and no Lender shall be the partner  or
agent   of  any  other  (except  to  the  extent  to  which   the
Administrative Agent is authorized to act as such).  The  failure
of  any Lender to perform any of its obligations hereunder  shall
not  relieve  any  other  Lender  from  any  of  its  obligations
hereunder.  This Agreement shall not be construed so as to confer
any  right  or benefit upon any Person other than the parties  to
this  Agreement  and  their respective  successors  and  assigns,
provided,  however, that the parties hereto expressly agree  that
the  Lead Arranger shall enjoy the benefits of the provisions  of
Sections 9.6, 11.10 and 9.11 to the extent specifically set forth
therein  and  shall have the right to enforce such provisions  on
its  own behalf and in its own name to the same extent as  if  it
were a party to this Agreement.

       Section  11.6.   Expenses;  Indemnification.    (i)    THE
BORROWERS  AND  THE GUARANTORS SHALL REIMBURSE THE ADMINISTRATIVE
AGENT  AND THE LEAD ARRANGER FOR ANY COSTS, INTERNAL CHARGES  AND
OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES  AND
TIME  CHARGES  OF ATTORNEYS FOR THE ADMINISTRATIVE  AGENT,  WHICH
ATTORNEYS MAY BE EMPLOYEES OF THE ADMINISTRATIVE AGENT)  PAID  OR
INCURRED  BY  THE  ADMINISTRATIVE AGENT OR THE LEAD  ARRANGER  IN
CONNECTION   WITH   THE   PREPARATION,  NEGOTIATION,   EXECUTION,
DELIVERY,  SYNDICATION,  REVIEW,  AMENDMENT,  MODIFICATION,   AND
ADMINISTRATION  OF  THE LOAN DOCUMENTS.  THE  BORROWERS  AND  THE
GUARANTORS ALSO AGREE TO REIMBURSE THE ADMINISTRATIVE AGENT,  THE
LEAD ARRANGER AND THE LENDERS FOR ANY COSTS, INTERNAL CHARGES AND
OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES  AND
TIME  CHARGES OF ATTORNEYS FOR THE ADMINISTRATIVE AGENT, THE LEAD
ARRANGER AND THE LENDERS, WHICH ATTORNEYS MAY BE EMPLOYEES OF THE
ADMINISTRATIVE  AGENT, THE LEAD ARRANGER OR ANY OF  THE  LENDERS)
PAID  OR  INCURRED BY THE ADMINISTRATIVE AGENT, THE LEAD ARRANGER
OR  ANY  LENDER IN CONNECTION WITH THE COLLECTION AND ENFORCEMENT
OF   THE  LOAN  DOCUMENTS.   EXPENSES  BEING  REIMBURSED  BY  THE
BORROWERS  UNDER THIS SECTION INCLUDE, WITHOUT LIMITATION,  COSTS
AND EXPENSES INCURRED IN CONNECTION WITH THE REPORTS DESCRIBED IN
THE   FOLLOWING  SENTENCE.   THE  BORROWERS  AND  THE  GUARANTORS
ACKNOWLEDGE  THAT FROM TIME TO TIME BANK OF AMERICA  MAY  PREPARE
AND  MAY  DISTRIBUTE TO THE LENDERS (BUT SHALL HAVE NO OBLIGATION
OR DUTY TO PREPARE OR TO DISTRIBUTE TO THE LENDERS) CERTAIN AUDIT
REPORTS  (THE "REPORTS") PERTAINING TO THE BORROWERS' ASSETS  FOR
INTERNAL USE BY BANK OF AMERICA FROM INFORMATION FURNISHED TO  IT
BY  OR  ON  BEHALF OF THE BORROWERS, AFTER BANK  OF  AMERICA  HAS
EXERCISED ITS RIGHTS OF INSPECTION PURSUANT TO THIS AGREEMENT.

           (ii)   THE BORROWERS AND THE GUARANTORS HEREBY FURTHER
AGREE  TO  INDEMNIFY THE ADMINISTRATIVE AGENT, THE LEAD  ARRANGER
AND   EACH  LENDER,  AND  EACH  OF  THEIR  RESPECTIVE  DIRECTORS,
OFFICERS,  EMPLOYEES, ATTORNEYS, AGENTS OR OTHER  REPRESENTATIVES
("REPRESENTATIVES")   AGAINST  ALL   LOSSES,   CLAIMS,   DAMAGES,
PENALTIES,   JUDGMENTS,  LIABILITIES  AND  EXPENSES   (INCLUDING,
WITHOUT  LIMITATION, ALL EXPENSES OF LITIGATION,  ARBITRATION  OR
MEDIATION,   OR   PREPARATION  THEREFOR  WHETHER   OR   NOT   THE
ADMINISTRATIVE  AGENT, THE LEAD ARRANGER OR ANY  LENDER,  OR  ANY
REPRESENTATIVE IS A PARTY THERETO) WHICH ANY OF THEM MAY  PAY  OR
INCUR  ARISING  OUT OF OR RELATING TO THIS AGREEMENT,  THE  OTHER
LOAN  DOCUMENTS,  THE  TRANSACTIONS CONTEMPLATED  HEREBY  OR  THE
DIRECT  OR  INDIRECT APPLICATION OR PROPOSED APPLICATION  OF  THE
PROCEEDS  OF  ANY  LOAN OR OTHER EXTENSION  OF  CREDIT  HEREUNDER
EXCEPT  TO  THE EXTENT THAT THEY ARE DETERMINED IN A  FINAL  NON-
APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO  HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT  OF  THE
PARTY SEEKING INDEMNIFICATION, IT BEING THE INTENTION HEREBY THAT
ADMINISTRATIVE AGENT, LEAD ARRANGER, AND EACH LENDER,  AND  THEIR
RESPECTIVE   REPRESENTATIVES   SHALL  BE  INDEMNIFIED   FOR   THE
CONSEQUENCES   OF ITS NEGLIGENCE (SOLE, CONTRIBUTORY,  CONTINGENT
OR  OTHERWISE), WHETHER IN WHOLE OR IN PART.  THE OBLIGATIONS  OF
THE  BORROWERS AND THE GUARANTORS UNDER THIS SECTION  11.6  SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.

      Section  11.7.   Usury Savings Clause .   It  is  expressly
stipulated  and agreed to be the intent of Administrative  Agent,
each  Lender,  each Borrower and each Guarantor at all  times  to
comply  with  the  applicable law governing the maximum  rate  or
amount  of  interest payable on or in connection with the  Notes,
the  Loans and the Facility Letters of Credit.  If the applicable
law  is ever judicially interpreted so as to render usurious  any
amount called for hereunder, under the Notes or under any of  the
other Loan Documents, or contracted for, charged, taken, reserved
or  received  with respect to any of the Notes or the Obligations
or  the  Facility  Letters of Credit, or if acceleration  of  the
maturity of the Notes, any prepayment by a Borrower, or any other
circumstance whatsoever, results in any Lender having  been  paid
any  interest in excess of that permitted by applicable law, then
it  is  the express intent of Administrative Agent, the  Lenders,
Borrowers  and the Guarantors that all excess amounts theretofore
collected by Administrative Agent and/or the Lenders be  credited
on the principal balance of the Notes (or, if the Notes have been
or  would thereby be paid in full, refunded to AMRESCO or another
applicable  Borrower), and the provisions of the  Notes  and  the
other  applicable Loan Documents immediately be  deemed  reformed
and  the  amounts thereafter collectible hereunder and thereunder
reduced,  without  the  necessity of the  execution  of  any  new
document, so as to comply with the applicable law, but so  as  to
permit  the  recovery of the fullest amount otherwise called  for
hereunder  and thereunder.  The right to accelerate the  maturity
of  the  Notes  does  not  include the right  to  accelerate  any
interest  which  has not otherwise accrued on the  date  of  such
acceleration, and Lenders do not intend to collect  any  unearned
interest  in the event of acceleration.  All sums paid or  agreed
to  be  paid to Lenders for the use, forbearance or detention  of
the  indebtedness evidenced hereby or by the Notes shall, to  the
extent  permitted  by  applicable law,  be  amortized,  prorated,
allocated   and  spread  throughout  the  full   term   of   such
indebtedness until payment in full so that the rate or amount  of
interest  on  account of such indebtedness does  not  exceed  the
Maximum Lawful Rate or maximum amount of interest permitted under
applicable  law.  The term "applicable law" as used herein  shall
mean  the laws of the state which govern this Agreement,  or  any
applicable pre-emptive federal statute or other applicable United
States  federal law to the extent that it permits the Lenders  to
contract  for, charge, take, reserve or receive a greater  amount
of  interest  than  under  laws of the state  which  govern  this
Agreement.  The provisions of this Section 11.7 shall control all
agreements between Borrowers and Lenders.

      Section  11.8.   Accounting.   Except as  provided  to  the
contrary  herein,  all  accounting terms  used  herein  shall  be
interpreted and all accounting determinations hereunder shall  be
made  in  accordance with Agreement Accounting Principles  (other
than  the  concept of the "Discontinued Operations"  which  shall
have  the  meaning  set  forth in Section 1.1,  rather  than  the
meaning under Agreement Accounting Principles).

      Section  11.9.  Severability of Provisions.   Any provision
in   any   Loan   Document  that  is  held  to  be   inoperative,
unenforceable, or invalid in any jurisdiction shall, as  to  that
jurisdiction,  be inoperative, unenforceable, or invalid  without
affecting  the remaining provisions in that jurisdiction  or  the
operation, enforceability, or validity of that provision  in  any
other  jurisdiction, and to this end the provisions of  all  Loan
Documents are declared to be severable.

      Section  11.10. Nonliability of Lenders.   The relationship
between  the  Borrowers on the one hand and the Lenders  and  the
Administrative  Agent on the other hand shall be solely  that  of
borrower and lender.  Neither the Administrative Agent, the  Lead
Arranger nor any Lender shall have any fiduciary responsibilities
to  the  Borrowers.  Neither the Administrative Agent,  the  Lead
Arranger  nor  any  Lender undertakes any responsibility  to  the
Borrowers  to  review or inform any Borrower  of  any  matter  in
connection  with  any  phase  of  the  Borrowers'  businesses  or
operations.   The Borrowers agree that neither the Administrative
Agent,  the Lead Arranger nor any Lender shall have liability  to
any  Borrower  (whether sounding in tort, contract or  otherwise)
for  losses suffered by such Borrower in connection with, arising
out  of,  or in any way related to, the transactions contemplated
and  the relationship established by the Loan Documents,  or  any
act,  omission or event occurring in connection therewith, unless
it is determined in a final non-appealable judgment by a court of
competent  jurisdiction that such losses resulted from the  gross
negligence or willful misconduct of the party from which recovery
is  sought.  Neither the Administrative Agent, the Lead  Arranger
nor  any Lender shall have any liability with respect to, and the
Borrowers  hereby waive, release and agree not to  sue  for,  any
special,  indirect  or  consequential  damages  suffered  by  any
Borrower  in  connection with, arising out  of,  or  in  any  way
related  to  the Loan Documents or the transactions  contemplated
thereby.

      Section  11.11.  Confidentiality; Non-Solicitation.    Each
Lender  agrees to hold any confidential information which it  may
receive   from  any  Borrower  pursuant  to  this  Agreement   in
confidence,  except for disclosure (a) to its Affiliates  and  to
other  Lenders  and  their respective Affiliates,  (b)  to  legal
counsel,  accountants, and other professional  advisors  to  such
Lender  or  to  an  actual  or  prospective  Transferee,  (c)  to
regulatory officials, (d) to any Person as requested pursuant  to
or  as required by law, regulation, or legal process, (e) to  any
Person  in  connection with any legal proceeding  to  which  such
Lender  is  a  party,  (f) to such Lender's  direct  or  indirect
contractual  counterparties  in  swap  agreements  or  to   legal
counsel,  accountants  and other professional  advisors  to  such
counterparties, (g) permitted by Section 11.13, and (h) to rating
agencies  if requested or required by such agencies in connection
with a rating relating to the Advances hereunder.  Subject to the
foregoing,  each  Lender  covenants and agrees  to  preserve  the
confidentiality  of  any  data  or  information,   financial   or
otherwise, concerning any Borrower or Guarantor or any  Affiliate
of  a Borrower, or related to the businesses or operations of any
Borrower or Guarantor or any Affiliate of Borrower, with  respect
to  which  any Borrower or Guarantor or any Affiliate of Borrower
has (a) an obligation of confidentiality to a third party (to the
extent  such  obligation has been disclosed to  such  Lender)  or
(b)  informed  such  Lender  of the confidential  nature  of  the
specific  information,  except  to  the  extent  such  Lender  is
required  to disclose such information pursuant to any applicable
law,  rule,  regulation  or order of any Governmental  Authority;
provided that (i) any information contained in any annual report,
or  any  Form 10-K, Form 10-Q or Form 8-K reports (if any)  which
have  been delivered to the SEC, or any other annual or quarterly
reports  to the stockholders of Borrower subject to the reporting
requirements of the Securities Exchange Act of 1934, as  amended,
proxy  material delivered to the stockholders of any Borrower  or
any report delivered to the SEC, or any other information that is
in  the public domain or has become publicly known, shall not  in
any  event be deemed confidential, and (ii) each Lender may  make
any  information  received by it available (A) to  an  actual  or
prospective  transferee  of or participant  in  any  interest  in
either of the Credit Facilities or the Notes, provided that  such
transferee  or participant agrees in writing to be bound  by  the
provisions of this Section 11.11, (B) to any accountants or other
professionals  engaged by such Lender, or (C) in connection  with
the enforcement of any of the Loan Documents or any litigation in
connection  therewith.  Additionally, each Lender  covenants  and
agrees to preserve the confidentiality of this Agreement and  the
transactions  contemplated herein, except as  set  forth  in  the
first  sentence of this Section 11.11 and in (ii)(A),(B) and  (C)
of  the  preceding  sentence.  Further each Lender  agrees  that,
during  the  term of the Credit Facilities, it will not  use  the
information provided by Borrowers or Guarantors and not otherwise
generally   known  or  obtainable  through  sources  other   than
Borrowers  or  Guarantors to take any action  to  personally,  by
telephone  or  mail, solicit any Account Debtor for  any  purpose
which  is  in  conflict  with  the services  and  products  which
Borrowers and Guarantors are providing or can provide with  their
current  products and services to such Account Debtor,  including
to  refinance  loans  made by Borrowers  or  Guarantors  to  such
Account  Debtor,  without  the  prior  written  consent  of   the
applicable Borrowers or Guarantors.  It is understood and  agreed
that  all rights, title and interest in and to the list  of  such
Account  Debtors  and data relating to their  mortgages  are  the
property of the applicable Borrowers and Guarantors, and  Lenders
shall take no action to undermine these rights and benefits.

      Section 11.12. Nonreliance.   Each Lender hereby represents
that  it  is  not relying on or looking to any margin  stock  (as
defined  in Regulation U) for the repayment of the Loans provided
for herein.

      Section 11.13. Disclosure.   Each Borrower and each  Lender
hereby  (i) acknowledge and agree that (a) one or more Affiliates
of  Bank  of America are or may become direct or indirect  equity
investors in a Borrower or any Subsidiary, (b) Bank of America is
or  may become a lender to, and agent bank for, a Borrower  or  a
Subsidiary,  and  (c) Bank of America and/or its Affiliates  from
time  to time may hold other investments in, make other loans  to
or  have other relationships with a Borrower or a Subsidiary, and
(ii) waive any liability of Bank of America or such Affiliate  to
any  Borrower  or  any Lender, respectively, arising  out  of  or
resulting  from  such  investments, loans or relationships  other
than  liabilities arising out of the gross negligence or  willful
misconduct of Bank of America or its Affiliates.

      Section  11.14.  Compliance With  Credit  and  Underwriting
Policies.    Each of the Borrowers and  Guarantors shall  at  all
times  comply with such Person's current practices and procedures
related   to   credit  control,  underwriting,   due   diligence,
collateral control, collection and reporting procedures  as  such
practices and procedures may be modified or amended from time  to
time  so that such practices and procedures are no less stringent
than  those  used  by  comparable  companies  in  Borrowers'   or
Guarantors' lines of business or as in effect on the date of this
Agreement.  Each Borrower's and each Guarantor's chief  executive
office   shall  at  all  times  be  as  shown  in   the   current
organizational chart and the amendment to the Security  Agreement
delivered to Administrative Agent in connection with the  closing
under  this Agreement (unless AMRESCO has delivered prior written
notice to Administrative Agent and its counsel of a change of the
chief  executive  office  of  any Borrower  or  Guarantor).   The
material  documents  and  files related  to  the  Assigned  Loans
included  in  the  Collateral shall at all times  be  held  by  a
Custodian.  Borrowers  and Guarantors shall  maintain  all  files
related  to  the Assigned Loans included in the Collateral  in  a
reasonably prudent manner.

       Section  11.15.  Appraisals.    Administrative  Agent  may
require, and AMRESCO or the appropriate Borrower or Guarantor, at
its  sole cost and expense, shall deliver to Administrative Agent
promptly  upon request therefor (provided that if no  Default  or
Event  of Default occurs, Borrowers and Guarantors shall  not  be
required  to  pay  the cost of more than one appraisal   for  any
particular item or portion of the Collateral in any twelve  month
period),  with  respect to any item or portion of the  Collateral
which  has  a cost in excess of One Hundred Thousand  and  No/100
Dollars  ($100,000.00),  an appraisal thereof.   If  required  by
applicable regulations, Administrative Agent may order  any  such
appraisal  directly, and Borrowers shall reimburse Administrative
Agent  for the reasonable cost of such appraisal upon request  by
Administrative Agent.  Each such appraisal shall be in  form  and
substance satisfactory to Administrative Agent.

     Section 11.16. Senior Indebtedness; Borrowers Subordination.
The  indebtedness of Borrowers and Guarantors hereunder and under
the  Notes and all of the Obligations is intended to be and shall
be  senior  to any subordinated indebtedness of AMRESCO  and  any
other Borrower and any Guarantor or any other indebtedness of any
Borrower or any Guarantor secured by a Lien on any portion of the
Collateral  (the  foregoing shall not in any way  imply  Lenders'
consent  to  any  such subordinate debt or Liens  which  are  not
otherwise permitted by this Agreement).  The Notes and any  other
amounts  advanced to or on behalf of any Borrower  or  any  other
Person pursuant to the terms of this Agreement or any other  Loan
Document  shall  never  be  in  a  position  subordinate  to  any
Indebtedness of any Borrower or any Guarantor owing to any  other
Person, except with the knowledge and written consent of all  the
Lenders.   If  any Borrower or any Guarantor is now or  hereafter
becomes  indebted  to  another Borrower or any  other  Guarantor,
(a)  such  indebtedness and all interest thereon  shall,  at  all
times,  be subordinate in all respects to the Obligations and  to
all  liens,  security  interests  and  rights  now  or  hereafter
existing to secure the Obligations; and (b) any Borrower  or  any
other Guarantor holding such inter-company indebtedness shall not
be entitled after the occurrence of a Default or Event of Default
to  enforce  or receive payment, directly or indirectly,  of  any
such  indebtedness  until the Obligations  have  been  fully  and
finally paid and performed.

      Section  11.17.  Consolidated Group.    The  operations  of
Borrowers  and Guarantors require financing on a basis such  that
the  credit supplied can be made available from time to  time  to
Borrowers   and   Guarantors,  as  required  for  the   continued
successful operation of Borrowers and Guarantors.  Borrowers  and
Guarantors  have requested that Lenders make the Loans  available
primarily  for  the  purposes  of  financing  the  operations  of
Borrowers  and  Guarantors.  Borrowers and Guarantors  expect  to
derive  benefit  (and the boards of directors or other  governing
body  of  each  of  Borrowers and Guarantors  may  reasonably  be
expected  to  derive benefit), directly or indirectly,  from  the
Loans  established by Lenders, both in their separate  capacities
and  as  members of the group of companies, since the  successful
operation  and condition of each Borrower and each  Guarantor  is
dependent  on  the  continued  successful  performance   of   the
functions of the group as a whole.

     Section 11.18. Amendment, Renewal and Extension.   Borrowers
and  Guarantors acknowledge and agree that all liens and security
interests  securing  all amounts outstanding under  the  Existing
Credit  Agreement  and all promissory notes evidencing  same  are
hereby  renewed  and extended and continue to secure  the  Loans,
which refinance, renew and extend the Credit Facilities under the
Existing Credit Agreement pursuant to this Agreement, and all  of
the other Obligations.

      Section  11.19.  Prior Understandings; No Defenses;  Entire
Agreement;  No  Oral Agreement .  This Agreement  supersedes  all
other  prior  understandings and agreements, whether  written  or
not,  between  the  parties hereto relating specifically  to  the
transactions  provided  for  herein.   Each  Borrower  and   each
Guarantor further confirms that neither Administrative Agent  nor
any  Lender  has  made  any agreements with,  or  commitments  or
representations  to,  any Borrower or any  Guarantor  (either  in
writing  or orally) other than as expressly stated herein  or  in
the other Loan Documents executed as of the date hereof.

     THIS  WRITTEN  CREDIT  AGREEMENT, TOGETHER  WITH  THE  OTHER
     WRITTEN  LOAN  DOCUMENTS,  REPRESENTS  THE  FINAL  AGREEMENT
     BETWEEN  THE  PARTIES AS TO THE SUBJECT  MATTER  HEREOF  AND
     THEREOF  AND MAY NOT BE CONTRADICTED BY EVIDENCE  OF  PRIOR,
     CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENT   OF   THE
     PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
     PARTIES.

To  the fullest extent applicable, each Borrower, each Guarantor,
Administrative Agent and each Lender acknowledge and  agree  that
this  Agreement  and  each of the other Loan Documents  shall  be
subject to Section 26.02 of the Texas Business and Commerce Code.

      Section 11.20. Release of Claims.   Each Borrower and  each
Guarantor  confirm  that there are no existing defenses,  claims,
counterclaims or rights of offset against Administrative Agent or
any  Lender  in  connection  with the  negotiation,  preparation,
execution,  performance  or any other  matters  related  to  this
Agreement or any of the other Loan Documents executed as  of  the
date  hereof and any of the transactions contemplated  hereby  or
thereby, or in connection with the Existing Credit Agreement, AND
EACH  BORROWER  AND EACH GUARANTOR HEREBY EXPRESSLY  RELEASE  AND
DISCHARGE  ADMINISTRATIVE  AGENT  AND   EACH  LENDER,   AND   ITS
REPRESENTATIVES, FROM ANY AND ALL SUCH CLAIMS, KNOWN OR UNKNOWN.

       Section   11.21.  Construction  .   The   parties   hereto
acknowledge and agree that neither this Agreement nor  any  other
Loan  Document shall be construed more favorably in favor of  one
than  the other based upon which party drafted the same, it being
acknowledged that all parties hereto contributed substantially to
the  negotiation and preparation of this Agreement and the  other
Loan Documents.

       Section  11.22.  Joint  and  Several  Obligations  .   The
obligations  of all the Borrowers hereunder and under  the  Notes
and  all  of  the other Loan Documents are expressly acknowledged
and  agreed  to be joint and several, and all of the obligations,
promises,     agreements,    covenants,    waivers,     consents,
representations,   warranties  and  other  provisions   in   this
Agreement and the other Loan Documents are made by and  shall  be
binding upon each and every Borrower, jointly and severally,  and
their respective successors and assigns.

       Section  11.23.  Counterparts.    This  Agreement  may  be
executed  in  any  number of counterparts,  all  of  which  taken
together  shall constitute one agreement, and any of the  parties
hereto   may   execute  this  Agreement  by  signing   any   such
counterpart.  This Agreement shall be effective when it has  been
executed  by  the  Borrowers, the Administrative  Agent  and  the
Lenders  and each party has notified the Administrative Agent  by
facsimile  transmission  or telephone  that  it  has  taken  such
action.

                           ARTICLE XII

  CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

      Section  12.1.  CHOICE OF LAW.   THE LOAN DOCUMENTS  (OTHER
THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION)
SHALL  BE  CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS  (  BUT
WITHOUT  REGARD TO THE CONFLICT OF LAWS PROVISIONS OR PRINCIPLES)
OF  THE  STATE  OF  TEXAS,  BUT GIVING  EFFECT  TO  FEDERAL  LAWS
APPLICABLE TO NATIONAL BANKS.

      Section 12.2.  CONSENT TO JURISDICTION.   EACH BORROWER AND
EACH  GUARANTOR  HEREBY IRREVOCABLY SUBMIT TO  THE  NON-EXCLUSIVE
JURISDICTION  OF ANY UNITED STATES FEDERAL OR TEXAS  STATE  COURT
SITTING IN DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING  OUT
OF  OR RELATING TO ANY LOAN DOCUMENTS, AND THE BORROWERS AND  THE
GUARANTORS HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT  AND  IRREVOCABLY  WAIVE ANY  OBJECTION  THEY  MAY  NOW  OR
HEREAFTER  HAVE  AS  TO  THE VENUE OF ANY SUCH  SUIT,  ACTION  OR
PROCEEDING  BROUGHT  IN SUCH A COURT OR THAT  SUCH  COURT  IS  AN
INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF  THE
ADMINISTRATIVE  AGENT OR ANY LENDER TO BRING PROCEEDINGS  AGAINST
ANY  BORROWER  OR  ANY  GUARANTOR IN  THE  COURTS  OF  ANY  OTHER
JURISDICTION.   ANY JUDICIAL PROCEEDING BY ANY  BORROWER  OR  ANY
GUARANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER, OR  ANY
OF  THEIR REPRESENTATIVES, OR ANY AFFILIATE OF THE ADMINISTRATIVE
AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN  ANY  WAY ARISING OUT OF, RELATED TO, OR CONNECTED  WITH  THIS
AGREEMENT  ANY  OTHER LOAN DOCUMENT SHALL BE BROUGHT  ONLY  IN  A
COURT IN DALLAS, TEXAS.

      Section 12.3.  WAIVER OF JURY TRIAL.   EACH BORROWER,  EACH
GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY  WAIVE
ANY  RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY  OR  INDIRECTLY, ANY MATTER (WHETHER SOUNDING  IN  TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,  OR
CONNECTED WITH THIS AGREEMENT, THE EXISTING CREDIT AGREEMENT, ANY
OTHER  LOAN  DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

      IN  WITNESS  WHEREOF, the Borrowers,  the  Guarantors,  the
Lenders,   and  the  Administrative  Agent  have  executed   this
Agreement as of the date first above written.

                         BORROWERS:

                         AMRESCO, INC., a Delaware corporation

                         By:
                         Name:
                         Title:

AFC EQUITIES INVESTORS, INC.
AFC EQUITIES, L.P.
AFC EQUITIES MANAGEMENT, INC.
AMREIT HOLDINGS, INC.
AMREIT MANAGERS G.P., INC.
AMREIT MANAGERS, L.P.
AMRESCO 1994-N2, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CAPITAL CONDUIT CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CAPITAL, L.P.
AMRESCO CMF, INC.
AMRESCO COMMERCIAL FINANCE, INC.
AMRESCO CONSOLIDATION CORP.
AMRESCO CONSUMER ACQUISITIONS CORP.
AMRESCO CONSUMER INVESTMENTS, L.P.
AMRESCO CONSUMER RECEIVABLES CORPORATION
AMRESCO EQUITY INVESTMENTS, INC.
AMRESCO EQUITY INVESTMENTS II, INC.
AMRESCO FINANCE AMERICA CORPORATION
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO-INSTITUTIONAL, INC.
AMRESCO INSURANCE SERVICES, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO MANAGEMENT, INC.
AMRESCO-MBS I, INC.
AMRESCO MBS-II, INC.
AMRESCO MORTGAGE CAPITAL, INC.
AMRESCO MORTGAGE CAPITAL LIMITED-I, INC.
AMRESCO MORTGAGE SERVICES LIMITED, INC.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RECEIVABLES MANAGEMENT CORP.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
AMRESCO RESIDENTIAL PROPERTIES, INC.
AMRESCO SERVICES, L.P.
AMRESCO VENTURES, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
COMMONWEALTH TRUST DEED SERVICES, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
EXPRESS FUNDING, INC.
FINANCE AMERICA CORPORATION
GRANITE EQUITIES, INC.
HF ACQUISITION SUB, INC.
HOLLIDAY FENOGLIO FOWLER, L.P.
LIFETIME HOMES, INC.
MORTGAGE INVESTORS CORPORATION
MSPI, INC.
OAK CLIFF FINANCIAL, INC.
PRESTON HOLLOW ASSET HOLDINGS, INC.
QUALITY FUNDING, INC.

By:   AMRESCO, INC., a Delaware
      corporation, as agent and attorney-in-fact

     By:
     Name:
     Title:

GUARANTORS:

AMRESCO INDEPENDENCE FUNDING, INC.

By:     AMRESCO, INC., a Delaware
        corporation, as agent and attorney-in-fact

By:
Name:
Title:

AMRESCO UK HOLDINGS LIMITED

By:
Name:
Title:

By:
Name:
Title:

AMRESCO JERSEY VENTURES LIMITED

By:
Name:
Title:

AMRESCO CANADA INC.

By:
Name:
Title:

AMRESCO EQUITIES CANADA INC.

By:
Name:
Title:

AMRESCO FUNDING CANADA INC.

By:
Name:
Title:

                         ADMINISTRATIVE AGENT:

                         BANK OF AMERICA, N.A., a national banking
                         association, as Administrative Agent for Lenders

                         By:
                                   Elizabeth Kurilecz
                                   Managing Director

                         LENDERS:

                         BANK OF AMERICA, N.A., a national banking association

                         By:
                                   Elizabeth Kurilecz
                                   Managing Director

                         CREDIT SUISSE FIRST BOSTON

                         By:
                         Name:
                         Title:

                         By:
                         Name:
                         Title:

                         THE BANK OF NEW YORK

                         By:
                         Name:
                         Title:

                         LASALLE BANK NATIONAL ASSOCIATION

                         By:
                         Name:
                         Title:

                         BANK ONE, TEXAS, N.A., a national banking association

                         By:
                         Name:
                         Title:

                         BANK UNITED, a federal savings bank

                         By:
                         Name:
                         Title:

                         COMERICA BANK - TEXAS, a state banking association

                         By:
                         Name:
                         Title:

                         CREDIT LYONNAIS NEW YORK BRANCH

                         By:
                         Name:
                         Title:

                         FLEET BANK, N.A., a national banking association

                         By:
                         Name:
                         Title:

                         U.S. BANK NATIONAL ASSOCIATION

                         By:
                         Name:
                         Title:

                         BEAR STEARNS INVESTMENT PRODUCTS, INC.

                         By:
                         Name:
                         Title:

                         PRUDENTIAL SECURITIES CREDIT CORP

                         By:
                         Name:
                         Title:

                         DRESDNER BANK AG, NEW YORK & GRAND
                         CAYMAN BRANCHES

                         By:
                         Name:
                         Title:

                         PNC BANK, N.A.

                         By:
                         Name:
                         Title:

                         ALLSTATE LIFE INSURANCE COMPANY

                         By:
                         Name:
                         Title:

                         By:
                         Name:
                         Title:

                         ALLSTATE INSURANCE COMPANY

                         By:
                         Name:
                         Title:

                         By:
                         Name:
                         Title:

                         STRATA FUNDING LTD.

                         By:  INVESCO Senior Secured Management, Inc., as
                              Sub-Managing Agent

                         By:
                         Name:
                         Title:

                         CERES FINANCE LTD.

                         By:  INVESCO Senior Secured Management, Inc., as
                              Sub-Managing Agent

                         By:
                         Name:
                         Title:

                         FARALLON DEBT INVESTORS I, LLC

                         By:
                         Name:
                         Title:

                         ING BARING (U.S.) CAPITAL LLC

                         By:
                         Name:
                         Title:

                         TYLER TRADING, INC.

                         By:
                         Name:
                         Title:

                         PACIFICA PARTNERS I, L.P.

                         By:
                         Name:
                         Title:

                         FLOATING RATE PORTFOLIO

                         By:
                         Name:
                         Title:

                         MERRILL LYNCH, PIERCE, FENNER & SMITH
                         INCORPORATED

                         By:
                         Name:
                         Title:FIRST MODIFICATION OF
             AMENDED AND RESTATED CREDIT AGREEMENT

     THIS  FIRST  MODIFICATION  OF AMENDED  AND  RESTATED  CREDIT
AGREEMENT (this "Modification Agreement") is entered into  as  of
February  25,  2000,  by  and  among AMRESCO,  INC.,  a  Delaware
corporation  ("AMRESCO"), the Subsidiaries of AMRESCO  listed  as
Borrowers  on the signature pages hereof (together with  AMRESCO,
collectively referred to herein as the "Borrowers", and each such
entity  referred to herein as a "Borrower"), and BANK OF AMERICA,
N.A.,   formerly  NationsBank,  N.A.,  as  Administrative   Agent
("Administrative  Agent"), for and on  behalf  of  the  Lenders
(defined below).

                      W I T N E S S E T H:

     WHEREAS,  reference  is made to the credit  facilities  made
pursuant  to  and governed by that certain Amended  and  Restated
Credit Agreement (as amended, the "Credit Agreement") dated as of
January   18,   2000,  executed  by  and  among  the   Borrowers,
Administrative Agent, and the financial institutions,  funds  and
other  entities from time to time designated as "Lenders" therein
(the "Lenders");

     WHEREAS, the Credit Agreement was executed in amendment  and
restatement  of  that  certain  Credit  Agreement  dated  as   of
August 12, 1998, among AMRESCO, as borrower, certain of the other
Borrowers, as guarantors, Administrative Agent, and the  Lenders,
as amended and supplemented;

     WHEREAS,  the Borrowers have requested certain modifications
to the Credit Agreement; and

     WHEREAS,  the  Lenders, acting through Administrative  Agent
pursuant  to  the Credit Agreement, have agreed to the  requested
modifications,  subject  to and upon  the  terms  and  conditions
contained herein.

     NOW,  THEREFORE, KNOW ALL MEN BY THESE PRESENTS,  that,  for
and  in  consideration  of the terms, conditions  and  agreements
contained  herein, and for other good and valuable consideration,
the  receipt  and  sufficiency of which is  hereby  acknowledged,
Administrative  Agent,  for and on behalf  of  the  Lenders,  and
Borrowers hereby agree as follows:

     1.    Definitions.   (a) The following definition  shall  be
inserted  in  alphabetical order in Section  1.1  of  the  Credit
Agreement:

          (i)   "Lend Lease Consent Holdbacks" means amounts
     held back from the gross cash purchase price to be paid
     to  the sellers under the Lend Lease Agreement for  the
     following  items  up to the maximum indicated  amounts:
     (a)  Holdback of $5,000,000 pending receipt of  consent
     from  the Japanese Ministry of Justice for the transfer
     of  AMRESCO's ownership in AMRESCO Japan, Inc.  to  the
     purchasers   under  the  Lend  Lease   Agreement;   and
     (b)  Holdback  of up to $6,400,000 pending  receipt  of
     consent to the assignment of various agreements between
     AMRESCO  Capital,. L.P. ("ACLP") and Teachers Insurance
     and  Annuity Association related to certain  commercial
     mortgage  loans  originated by ACLP to  the  purchasers
     under the Lend Lease Agreement.

          (b)  The definition of "Transition Date" in Section 1.1
of  the  Credit Agreement is amended in its entirety to  read  as
follows:

          "Transition  Date" means the earlier  of  (i)  the
     Lend Lease Closing Date and (ii) the date on which  the
     Borrowers are obligated to make a principal payment  on
     the Term Loans pursuant to Section 2.2.1(a)."

     2.    Extended  Date for Lend Lease Required  Payment.   The
outside  date for the payment of the Lend Lease Required  Payment
is   extended  to  April  6,  2000.   Accordingly,  the  date  of
"February   29,  2000"  set  forth  in  the  first  sentence   of
Section  2.2.1(a)  of  the  Credit Agreement  is  amended  to  be
"April 6, 2000."

     3.    Lend  Lease Consent Holdbacks.  If and to  the  extent
that  the  cash proceeds received by the sellers under  the  Lend
Lease Agreement upon closing thereof is reduced by virtue of  any
Lend  Lease  Consent  Holdbacks, then 95%  of  any  such  amounts
subsequently  paid to the sellers shall be paid to Administrative
Agent  for  application  to  the Term Loans  in  accordance  with
Section  2.2.1  of  the Credit Agreement,  and,  as  provided  in
Section 2.7(b) of the Credit Agreement, if Term Loan B is paid in
full,   then  any  such  amounts  shall  be  applied  to  amounts
outstanding  under  the  Revolving  Credit  Facility,   and   the
Revolving  Commitment shall be reduced by the amount so  applied.
Accordingly, Section 2.2.1(d) of the Credit Agreement is  amended
to read as follows:

          "(d)  On any day that a principal payment is  made
     on  the Lend Lease Holdback Note or any portion of  the
     Lend Lease Consent Holdbacks is paid to AMRESCO or  any
     other  seller under the Lend Lease Agreement, an amount
     equal to 95% of such payment (or 85% of such payment if
     neither  the SREP Sale Date nor Structured Real  Estate
     Asset Sales for all or substantially all [as defined in
     Section  2.2.1(b)]  of the SREP Assets  have  occurred,
     with  such  10% difference being included in  the  Lend
     Lease Deferral)."

     4.   Transition Date Borrowing Base Certificate.  To be able
to  determine compliance with the Borrowing Base requirements  of
Section  7.24.4  of the Credit Agreement and the  amount  of  any
payment(s)  on  the  Credit Facilities due to  a  Borrowing  Base
deficiency after the Transition Date pursuant to Section 2.2.4 of
the   Credit  Agreement,  AMRESCO,  for  itself  and  the   other
Borrowers, shall furnish to Administrative Agent within five  (5)
Business  Days  after the Transition Date a pro  forma  Borrowing
Base Certificate calculating the Borrowing Base for the Revolving
Credit  Facility and the Term Loan Facilities, in form acceptable
to  Administrative Agent.  Accordingly, Section  7.1(ix)  of  the
Credit Agreement is amended to add the following sentence at  the
end of that Section:

          "In addition, AMRESCO shall prepare and deliver to
     Administrative  Agent  within five  (5)  Business  Days
     after  the Transition Date, a pro forma Borrowing  Base
     Certificate,  in  form  and methodology  acceptable  to
     Administrative  Agent, calculating the  Borrowing  Base
     for  the Revolving Credit Facility (calculated pursuant
     to  Schedule  11) and the Borrowing Base for  the  Term
     Loan Facilities (calculated pursuant to Schedule 12) as
     of  the  first (1st) Business Day after the  Transition
     Date,  and such Borrowing Base Certificate shall  be  a
     Borrowing  Base Certificate for all purposes hereunder,
     including   without   limitation   for   purposes    of
     Section  2.2.4  and  for  calculating  compliance  with
     Section  7.24.4 from and after the date  following  the
     Transition Date."

     5.   Covenant Amendments.  The following amendments are made
to the referenced covenants contained in the Credit Agreement:

          (a)   Minimum  Consolidated Tangible  Net  Worth:   The
outside  date for the Change Date (as defined in Section 7.24  of
the   Credit  Agreement)  is  extended  until  April   6,   2000.
Accordingly, the date of "March 1, 2000" set forth in clause  (a)
of  Section  7.24.1  of the Credit Agreement  is  amended  to  be
"April 6, 2000."

          (b)   Leverage  Ratio:   The  term  "Change  Date"   in
Section 7.24.2 of the Credit Agreement is expressly understood to
refer  to the amended definition of Change Date set forth in  the
preceding Section 4(a) hereof.

           (c)   Interest/Dividend Coverage Ratio: Section 7.24.3
of  the  Credit  Agreement is hereby  amended  to  read  in   its
entirety as follows:

          "Section 7.24.3. Interest/Dividend Coverage Ratio.
     Borrowers   shall   not  permit  the  Interest/Dividend
     Coverage  Ratio  to be less than (a)  on  December  31,
     1999,  .80  to  1.00, (b) from January 1,  2000  though
     March  31,  2000, .85 to 1.00, and (c) from  and  after
     April 1, 2000, 1.35 to 1.00."

          (d)  Borrowing Base Requirement.  Section 7.24.4 of the
Credit  Agreement is hereby amended to read in  its  entirety  as
follows:

          "Section   7.24.4.   Borrowing  Base  Requirement.
     Borrowers shall not permit the Borrowing Base  Coverage
     Ratio  (as  indicated on Schedules 10, 11  and  12,  as
     applicable) to be less than (a) 1.05 to 1.00  prior  to
     and   on   the  Transition  Date  for  all  the  Credit
     Facilities  as  calculated  pursuant  to  Schedule  10,
     (b)  1.25  to  1.00 after the Transition Date  for  the
     Revolving  Credit  Facility as calculated  pursuant  to
     Schedule 11, (c) if the Transition Date has occurred by
     March 30, 2000, 2.00 to 1.00 after the Transition  Date
     through March 30, 2000, for the Term Loan Facilities as
     calculated pursuant to Schedule 12, or (d) 4.00 to 1.00
     from  and  after  the later to occur of the  Transition
     Date or March 31, 2000, for the Term Loan Facilities as
     calculated  pursuant to Schedule 12.   Compliance  with
     this  Section 7.24.4 from and after the Transition Date
     until  the  date  for  delivery of the  next  month-end
     Borrowing Base Certificate shall be determined from the
     pro  forma  Borrowing Base Certificate to be  delivered
     pursuant to the last sentence of Section 7.1(ix)."

     6.    SREP  Sale Date.  Borrowers and Administrative  Agent,
for and on behalf of the Lenders, acknowledge and agree that with
the  closing of the SREP-Ocwen Sale on January 18, 2000, the SREP
Sale  Date  has  occurred  for  all  purposes  under  the  Credit
Agreement.

     7.    Definition of Loan Documents.  The definition of "Loan
Documents", as defined in the Credit Agreement and as used in the
Credit Agreement, the other Loan Documents and herein, shall  be,
and  is  hereby, modified to include this Modification  Agreement
and any and all documents executed in connection herewith.

     8.    Conditions  Precedent to this Modification  Agreement.
As  conditions precedent to this Modification Agreement  and  the
modifications  to the Credit Agreement pursuant  hereto  and  the
consents granted hereunder, all of the following shall have  been
satisfied:

          (a)   The  Borrowers and Guarantors shall have executed
and   delivered   to   Administrative  Agent  this   Modification
Agreement;

          (b)    The   Borrowers   shall   have   delivered    to
Administrative Agent all corporate resolutions, consents,  powers
of  attorney,  certificates or documents as Administrative  Agent
may  request  relating  to (i) the existence  of  Borrowers,  and
(ii)  the  corporate and partnership authority for the  execution
and  validity of this Modification Agreement, together  with  all
other documents, instruments and agreements and any other matters
relevant  hereto or thereto, all in form and content satisfactory
to Administrative Agent;

          (c)   The  Borrowers  shall have  paid  all  applicable
amendment,  administration and other fees as agreed in connection
with this Modification Agreement; and

          (d)   If applicable, Borrowers shall have caused to  be
executed  and  delivered to Administrative Agent a Supplement  to
the  Loan Documents to add any additional Subsidiaries of AMRESCO
required  pursuant  to Section 5.13 of the  Credit  Agreement  as
Borrowers or Guarantors, as the case may be, and as assigning  or
pledging  parties under the Collateral Assignment,  the  Security
Agreement  and  the  Pledge Agreement, and  Administrative  Agent
shall  have  received all such corporate existence and  authority
documentation,   resolutions   and   other   agreements,    stock
certificates  and  other  equity  ownership  certificates,  stock
powers,  financing  statements, instruments and  certificates  as
Administrative  Agent shall reasonably require  with  respect  to
such  additional  Borrowers and/or Guarantors.   Borrowers  shall
also   have   caused   to   be  executed  and/or   delivered   to
Administrative  Agent  such modifications  to  the  Stock  Pledge
Agreement  and such stock certificates of, or other evidences  of
equity interests in, the Excluded Subsidiaries (with stock powers
as  applicable) to effectively evidence and perfect the  Lenders'
security interests therein.

     9.     Reaffirmation  of  Debt  and  Liens.   Each  Borrower
acknowledges and agrees that it is well and truly indebted to the
Lenders  pursuant to the terms of the Notes, the Credit Agreement
and  the  other Loan Documents, as modified hereby, and that  all
liens  and  security interests securing the Obligations  are  and
remain in full force and effect.

     10.   No  Implied  Waivers.   None  of  the  amendments   or
modifications provided for herein shall be deemed a consent to or
waiver of any breach of the same or any other covenant, condition
or  duty.   The  Borrowers  and  the Guarantors  acknowledge  and
understand  that  Administrative Agent and the  Lenders  have  no
obligation  to further amend or modify the Credit Agreement,  any
of  the  other Loan Documents or any of the terms, provisions  or
covenants thereof, and that Administrative Agent and the  Lenders
have  made  no  representations regarding any such amendments  or
modifications.  No failure or delay on the part of Administrative
Agent or any Lender in exercising, and no course of dealing  with
respect to, any right, power or privilege under this Modification
Agreement, the Credit Agreement or any other Loan Document  shall
operate  as  a  waiver thereof or of the exercise  of  any  other
right, power or privilege.

     11.   Representations and Warranties.  Each of the Borrowers
and  Guarantors  hereby represent and warrant  to  Administrative
Agent  and  the  Lenders  that (a) the execution,  delivery,  and
performance  by  the  Borrowers  and  the  Guarantors   of   this
Modification  Agreement  and  compliance  with  the   terms   and
provisions hereof (i) have been duly authorized by all  requisite
action on the part of each such Person and (ii) do not, and  will
not,  violate  or  conflict with, or result in a  breach  of,  or
require  any  consent  under (A) the articles  of  incorporation,
certificate  of incorporation, bylaws, partnership  agreement  or
other  organizational  documents of  any  such  Person,  (B)  any
applicable   law,  rule,  or  regulation  or  any  order,   writ,
injunction,   or   decree  of  any  Governmental   Authority   or
arbitrator, or (C) any material agreement or instrument to  which
any  such  Person is a party or by which any of them  or  any  of
their  property is bound or subject, (b) the representations  and
warranties contained in the Agreement, as amended hereby, and any
other Loan Document are true and correct in all material respects
on and as of the date hereof as though made on and as of the date
hereof, and (c) no Default has occurred and is continuing.

     12.   Release  of  Claims.  Each of the  Borrowers  and  the
Guarantors  hereby acknowledge and agree that none  of  them  has
any,  and there are no, claims or offsets against or defenses  or
counterclaims  to the terms and provisions of or the  obligations
of  any  Borrower,  any  Guarantor or any Subsidiary  created  or
evidenced  by  the  Credit Agreement or any  of  the  other  Loan
Documents,  and to the extent any such claims, offsets,  defenses
or  counterclaims exist, each Borrower and each Guarantor  hereby
waives  (to the fullest extent permitted by applicable law),  and
hereby  releases  each of Administrative Agent and  each  of  the
Lenders   from,  any  and  all  claims,  offsets,  defenses   and
counterclaims, whether known or unknown, such waiver and  release
being  with full knowledge and understanding of the circumstances
and effects of such waiver and release and after having consulted
legal counsel with respect thereto.

     13.   Ratification.  Except as otherwise expressly  modified
by  this Modification Agreement, all terms and provisions of  the
Credit  Agreement, the Notes, and the other Loan Documents  shall
remain unchanged and hereby are ratified and confirmed and  shall
be  and  shall  remain in full force and effect,  enforceable  in
accordance with their terms.

     14.    Payment   of  Expenses.   Borrowers  shall   pay   to
Administrative  Agent, for and on behalf  of  the  Lenders,  upon
demand,   the   reasonable  attorneys'  fees  and   expenses   of
Administrative Agent's counsel and all filing and recording  fees
and other reasonable expenses incurred by Administrative Agent in
connection with this Modification Agreement.

     15.     Current    Borrowers,   Guarantors   and    Excluded
Subsidiaries.   Borrowers  represent  that  the  Subsidiaries  of
AMRESCO  that  are required to be a "Borrower" or a "Guarantor",
respectively,  under  the  Credit  Agreement  and  related   Loan
Documents as of the date hereof, are and remain only the  initial
Borrowers and Guarantors that executed the Credit Agreement,  and
there are no additional Borrowers or Guarantors to be added by  a
Supplement to the Loan Documents, and that BEI Sanjac,  Inc.  has
merged  into  AMRESCO Consolidated Corp. and  is,  therefore,  no
longer a Borrower.

     16.   Further  Assurances.  AMRESCO and the other  Borrowers
shall  execute  and deliver to Administrative  Agent  such  other
documents  as  may  be necessary or as may be  required,  in  the
opinion  of Administrative Agent and/or counsel to Administrative
Agent,  to  effect the transactions contemplated  hereby  and  to
create,  evidence,  perfect and protect the  Lenders'  Liens  and
security interests, and the rights and remedies of Administrative
Agent and/or the Lenders under the Loan Documents.

     17.   Binding Agreement.  This Modification Agreement  shall
be  binding upon, and shall inure to the benefit of, the  parties
hereto,   and   the   Lenders,   and   their   respective   legal
representatives, successors and assigns.

     18.   Enforceability.   In the event the  enforceability  or
validity  of  any  portion  of this Modification  Agreement,  the
Credit  Agreement, the Notes, or any of the other Loan  Documents
is challenged or questioned, such provision shall be construed in
accordance  with, and shall be governed by, whichever  applicable
federal  or  Texas  law  would  uphold  or  would  enforce   such
challenged or questioned provision.

     19.   Choice  of Law.  THIS MODIFICATION AGREEMENT  AND  THE
OTHER  LOAN  DOCUMENTS  SHALL BE GOVERNED BY,  AND  CONSTRUED  IN
ACCORDANCE  WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT  TO  THE
EXTENT FEDERAL LAWS PREEMPT THE LAWS OF THE STATE OF TEXAS.

     20.   Counterparts.   This  Modification  Agreement  may  be
executed  in  multiple counterparts, all of which are  identical,
each  of  which  shall be deemed an original, and  all  of  which
counterparts   together  shall  constitute  one  and   the   same
instrument.

     21.   Entire  Agreement.  This Modification  Agreement,  the
Credit  Agreement  and the Notes, together with  the  other  Loan
Documents,  contain  the entire agreements  between  the  parties
relating  to the subject matter hereof and thereof and all  prior
agreements  relative  thereto which are not contained  herein  or
therein are terminated.

     THIS   MODIFICATION   AGREEMENT  AND   THE   OTHER   WRITTEN
INSTRUMENTS, AGREEMENTS AND DOCUMENTS EXECUTED IN CONNECTION WITH
THIS MODIFICATION AGREEMENT, AND THE CREDIT AGREEMENT, THE NOTES,
AND  THE  OTHER  LOAN  DOCUMENTS, REPRESENT THE  FINAL  AGREEMENT
BETWEEN  THE  PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE  OF
PRIOR,  CONTEMPORANEOUS  OR SUBSEQUENT  ORAL  AGREEMENTS  OF  THE
PARTIES.   THERE  ARE  NO UNWRITTEN ORAL AGREEMENTS  BETWEEN  THE
PARTIES.

     IN  WITNESS WHEREOF, this Modification Agreement is executed
effective as of the date first written above.

                         BORROWERS:

                         AMRESCO, INC., a Delaware corporation

                         By:
                         Name:
                              __________________________________________
                         Title:
                              __________________________________________

                         AFC EQUITIES INVESTORS, INC.
                         AFC EQUITIES, L.P.
                         AFC EQUITIES MANAGEMENT, INC.
                         AMREIT HOLDINGS, INC.
                         AMREIT MANAGERS G.P., INC.
                         AMREIT MANAGERS, L.P.
                         AMRESCO 1994-N2, INC.
                         AMRESCO ATLANTA INDUSTRIAL, INC.
                         AMRESCO BUILDERS GROUP, INC.
                         AMRESCO CAPITAL CONDUIT CORPORATION
                         AMRESCO CAPITAL LIMITED, INC.
                         AMRESCO CAPITAL, L.P.
                         AMRESCO CMF, INC.
                         AMRESCO COMMERCIAL FINANCE, INC.
                         AMRESCO CONSOLIDATION CORP.
                         AMRESCO CONSUMER ACQUISITIONS CORP.
                         AMRESCO CONSUMER INVESTMENTS, L.P.
                         AMRESCO CONSUMER RECEIVABLES CORPORATION
                         AMRESCO EQUITY INVESTMENTS, INC.
                         AMRESCO EQUITY INVESTMENTS II, INC.
                         AMRESCO FINANCE AMERICA CORPORATION
                         AMRESCO FINANCIAL I, INC.
                         AMRESCO FINANCIAL I, L.P.
                         AMRESCO FUNDING CORPORATION
                         AMRESCO-INSTITUTIONAL, INC.
                         AMRESCO INSURANCE SERVICES, INC.
                         AMRESCO INVESTMENTS, INC.
                         AMRESCO MANAGEMENT, INC.
                         AMRESCO-MBS I, INC.
                         AMRESCO MBS-II, INC.
                         AMRESCO MORTGAGE CAPITAL, INC.
                         AMRESCO MORTGAGE CAPITAL LIMITED-I, INC.
                         AMRESCO MORTGAGE SERVICES LIMITED, INC.
                         AMRESCO NEW ENGLAND, INC.
                         AMRESCO NEW ENGLAND II, INC.
                         AMRESCO NEW ENGLAND, L.P.
                         AMRESCO NEW ENGLAND II, L.P.
                         AMRESCO NEW HAMPSHIRE, INC.
                         AMRESCO NEW HAMPSHIRE, L.P.
                         AMRESCO OVERSEAS, INC.
                         AMRESCO PORTFOLIO INVESTMENTS, INC.
                         AMRESCO PRINCIPAL MANAGERS I, INC.
                         AMRESCO PRINCIPAL MANAGERS II, INC.
                         AMRESCO RECEIVABLES MANAGEMENT CORP.
                         AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
                         AMRESCO RESIDENTIAL CREDIT CORPORATION
                         AMRESCO RESIDENTIAL MORTGAGE CORPORATION
                         AMRESCO RESIDENTIAL PROPERTIES, INC.
                         AMRESCO SERVICES, L.P.
                         AMRESCO VENTURES, INC.
                         ASSET MANAGEMENT RESOLUTION COMPANY
                         BEI 1992 - N1, INC.
                         BEI 1993 - N3, INC.
                         BEI 1994 - N1, INC.
                         BEI MULTI-POOL, INC.
                         BEI PORTFOLIO INVESTMENTS, INC.
                         BEI PORTFOLIO MANAGERS, INC.
                         BEI REAL ESTATE SERVICES, INC.
                         COMMONWEALTH TRUST DEED SERVICES, INC.
                         ENT MIDWEST, INC.
                         ENT NEW JERSEY, INC.
                         ENT SOUTHERN CALIFORNIA, INC.
                         EXPRESS FUNDING, INC.
                         FINANCE AMERICA CORPORATION
                         GRANITE EQUITIES, INC.
                         HF ACQUISITION SUB, INC.
                         HOLLIDAY FENOGLIO FOWLER, L.P.
                         LIFETIME HOMES, INC.
                         MORTGAGE INVESTORS CORPORATION
                         MSPI, INC.
                         OAK CLIFF FINANCIAL, INC.
                         PRESTON HOLLOW ASSET HOLDINGS, INC.
                         QUALITY FUNDING, INC.

                         By:  AMRESCO, INC., a Delaware corporation,
                              as agent and attorney-in-fact

                         By:
                         Name:
                         Title:

                         ACKNOWLEDGED AND AGREED TO as of the
                         25th day of February, 2000, by:

                         GUARANTORS:

                         AMRESCO INDEPENDENCE FUNDING, INC.

                         By:  AMRESCO, INC., a Delaware corporation,
                              as agent and attorney-in-fact

                         By:
                         Name:
                         Title:

                         AMRESCO UK HOLDINGS LIMITED

                         By:
                         Name:
                         Title:

                         By:
                         Name:
                         Title:

                         AMRESCO JERSEY VENTURES LIMITED

                         By:
                         Name:
                         Title:

                         AMRESCO CANADA INC.

                         By:
                         Name:
                         Title:

                         AMRESCO EQUITIES CANADA INC.

                         By:
                         Name:
                         Title:

                         AMRESCO FUNDING CANADA INC.

                         By:
                         Name:
                         Title:

                         ADMINISTRATIVE AGENT:

                         BANK OF AMERICA, N.A., a national banking
                         association, as  Administrative Agent for and on
                         behalf of the Lenders

                         By:
                                   Elizabeth Kurilecz
                                   Managing Director

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