Document:

Exhibit 4.1

<PAGE>

                       AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                             Dated as of May 1, 2000

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

                Floating Rate Mortgage Pass-Through Certificates

                                  Series 2000-1

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<TABLE>
<CAPTION>
                                             TABLE OF CONTENTS

SECTION                                                                                               PAGE
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<S>                                                                                                   <C>
                                                 ARTICLE I

                                                DEFINITIONS

1.01.     Defined Terms..................................................................................4
          Accrued Certificate Interest...................................................................4
          Adjustment Date................................................................................4
          Affiliate......................................................................................4
          Agreement......................................................................................4
          Assignment.....................................................................................4
          Available Distribution Amount..................................................................5
          Bankruptcy Code................................................................................5
          Bankruptcy Loss................................................................................5
          Book-Entry Certificate.........................................................................5
          Book-Entry Custodian...........................................................................5
          Business Day...................................................................................5
          Certificate....................................................................................6
          Certificate Factor.............................................................................6
          Certificateholder" or "Holder..................................................................6
          Certificate Owner..............................................................................6
          Certificate Principal Balance..................................................................6
          Certificate Register" and "Certificate Registrar...............................................7
          Class   .......................................................................................7
          Class A Certificate............................................................................7
          Class A Principal Distribution Amount..........................................................7
          Class CE Certificate...........................................................................7
          Class Exemption................................................................................7
          Class M-1 Certificate..........................................................................7
          Class M-1 Principal Distribution Amount........................................................7
          Class M-2 Certificate..........................................................................8
          Class M-2 Principal Distribution Amount........................................................8
          Class M-3 Certificate..........................................................................8
          Class M-3 Principal Distribution Amount........................................................8
          Class P Certificate............................................................................8
          Class R-I Certificate..........................................................................8
          Class R-II Certificate.........................................................................8
          Class R-III Certificates.......................................................................9
          Closing Date...................................................................................9
          Code    .......................................................................................9
          Collection Account.............................................................................9
          Commission.....................................................................................9
          Corporate Trust Office.........................................................................9

                                                    i

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SECTION                                                                                               PAGE
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        Corresponding Certificate......................................................................9
        Credit Enhancement Percentage..................................................................9
        Cumulative Loss Percentage.....................................................................9
        Custodial Agreement...........................................................................10
        Custodian.....................................................................................10
        Cut-off Date..................................................................................10
        Debt Service Reduction........................................................................10
        Deficient Valuation...........................................................................10
        Definitive Certificates.......................................................................10
        Deleted Mortgage Loan.........................................................................10
        Delinquency Percentage........................................................................10
        Depositor.....................................................................................10
        Depository....................................................................................10
        Depository Institution........................................................................11
        Depository Participant........................................................................11
        Determination Date............................................................................11
        Directly Operate..............................................................................11
        Disqualified Organization.....................................................................11
        Distribution Account..........................................................................12
        Distribution Date.............................................................................12
        Due Date......................................................................................12
        Due Period....................................................................................12
        Eligible Account..............................................................................12
        ERISA   ......................................................................................12
        Estate in Real Property.......................................................................12
        Excess Overcollateralized Amount..............................................................12
        Expense Adjusted Mortgage Rate................................................................12
        Extraordinary Trust Fund Expense..............................................................12
        Fannie Mae....................................................................................12
        FDIC    ......................................................................................13
        Final Recovery Determination..................................................................13
        Fitch   ......................................................................................13
        Freddie Mac...................................................................................13
        Gross Margin..................................................................................13
        Independent...................................................................................13
        Independent Contractor........................................................................13
        Index   ......................................................................................14
        Insurance Proceeds............................................................................14
        Interest Accrual Period.......................................................................14
        Interest Carry Forward Amount.................................................................14
        Interest Determination Date...................................................................14
        Interest Distribution Amount..................................................................15
        Interest Remittance Amount....................................................................15
        Late Collections..............................................................................15

                                                    ii

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SECTION                                                                                               PAGE
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         Liquidation Event.............................................................................15
         Liquidation Proceeds..........................................................................15
         Loan-to-Value Ratio...........................................................................15
         London Business Day...........................................................................15
         Majority Class CE Certificateholder...........................................................15
         Master Servicer...............................................................................15
         Master Servicer Event of Default..............................................................15
         Master Servicer Prepayment Charge Payment Amount..............................................16
         Master Servicer Remittance Date...............................................................16
         Master Servicer Termination Test..............................................................16
         Maximum I-LT6 Uncertificated Interest Deferral Amount.........................................16
         Maximum Mortgage Rate.........................................................................16
         Mezzanine Certificate.........................................................................16
         Minimum Mortgage Rate.........................................................................16
         Monthly Payment...............................................................................16
         Moody's ......................................................................................16
         Mortgage......................................................................................16
         Mortgage File.................................................................................17
         Mortgage Loan.................................................................................17
         Mortgage Loan Purchase Agreement..............................................................17
         Mortgage Loan Schedule........................................................................17
         Mortgage Note.................................................................................18
         Mortgage Pool.................................................................................18
         Mortgage Rate.................................................................................19
         Mortgaged Property............................................................................19
         Mortgagor.....................................................................................19
         Net Monthly Excess Cashflow...................................................................19
         Net Mortgage Rate.............................................................................19
         Net WAC Pass-Through Rate.....................................................................19
         New Lease.....................................................................................19
         Nonrecoverable P&I Advance....................................................................20
         Nonrecoverable Servicing Advance..............................................................20
         Non-United States Person......................................................................20
         Notional Amount...............................................................................20
         Officers' Certificate.........................................................................20
         One-Month LIBOR...............................................................................20
         One-Month LIBOR Pass-Through Rate.............................................................21
         Opinion of Counsel............................................................................21
         Original Mortgage Loan........................................................................21
         Originator....................................................................................21
         Overcollateralized Amount.....................................................................21
         Overcollateralization Deficiency Amount.......................................................21
         Overcollateralization Increase Amount.........................................................22
         Overcollateralization Reduction Amount........................................................22

                                                   iii

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SECTION                                                                                                        PAGE
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        Ownership Interest............................................................................22
        Pass-Through Rate.............................................................................22
        Percentage Interest...........................................................................23
        Periodic Rate Cap.............................................................................23
        Permitted Investments.........................................................................23
        Permitted Transferee..........................................................................24
        Person  ......................................................................................24
        P&I Advance...................................................................................25
        Plan    ......................................................................................25
        Prepayment Assumption.........................................................................25
        Prepayment Charge.............................................................................25
        Prepayment Charge Schedule....................................................................25
        Prepayment Interest Shortfall.................................................................26
        Prepayment Period.............................................................................26
        Principal Distribution Amount.................................................................26
        Principal Prepayment..........................................................................27
        PTCE    ......................................................................................27
        Purchase Price................................................................................27
        Qualified Substitute Mortgage Loan............................................................27
        Rating Agency or Rating Agencies..............................................................28
        Realized Loss.................................................................................28
        Record Date...................................................................................29
        Reference Banks...............................................................................29
        Refinanced Mortgage Loan......................................................................29
        Regular Certificate...........................................................................29
        Regular Interest..............................................................................29
        Relief Act....................................................................................30
        Relief Act Interest Shortfall.................................................................30
        REMIC   ......................................................................................30
        REMIC I ......................................................................................30
        REMIC I Interest Loss Allocation Amount.......................................................30
        REMIC I Overcollateralized Amount.............................................................30
        REMIC I Principal Loss Allocation Amount......................................................30
        REMIC I Regular Interest......................................................................31
        REMIC I Regular Interest I-LT1................................................................31
        REMIC I Regular Interest I-LT2................................................................31
        REMIC I Regular Interest I-LT3................................................................31
        REMIC I Regular Interest I-LT4................................................................31
        REMIC I Regular Interest I-LT5................................................................31
        REMIC I Regular Interest I-LT6................................................................32
        REMIC I Regular Interest I-LTP................................................................32
        REMIC I Remittance Rate.......................................................................32
        REMIC I Required Overcollateralized Amount....................................................32
        REMIC II......................................................................................32

                                                    iv

<PAGE>

SECTION                                                                                               PAGE
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        REMIC II Regular Interest.....................................................................32
        REMIC II Regular Interest II-LT1..............................................................32
        REMIC II Regular Interest II-LT2..............................................................32
        REMIC II Regular Interest II-LT3..............................................................33
        REMIC II Regular Interest II-LT4..............................................................33
        REMIC II Regular Interest II-LT5..............................................................33
        REMIC II Regular Interest II-LT6..............................................................33
        REMIC II Regular Interest II-LTP..............................................................33
        REMIC II Regular Interest II-LT2S.............................................................33
        REMIC II Regular Interest II-LT3S.............................................................34
        REMIC II Regular Interest II-LT4S.............................................................34
        REMIC II Regular Interest II-LT5S.............................................................34
        REMIC II Remittance Rate......................................................................34
        REMIC III.....................................................................................34
        REMIC III Certificate.........................................................................34
        REMIC III Certificateholder...................................................................34
        REMIC Provisions..............................................................................34
        Remittance Report.............................................................................35
        Rents from Real Property......................................................................35
        REO Account...................................................................................35
        REO Disposition...............................................................................35
        REO Imputed Interest..........................................................................35
        REO Principal Amortization....................................................................35
        REO Property..................................................................................35
        Request for Release...........................................................................35
        Required Overcollateralized Amount............................................................35
        Reserve Interest Rate.........................................................................36
        Residential Dwelling..........................................................................36
        Residual Certificate..........................................................................36
        Residual Interest.............................................................................36
        Responsible Officer...........................................................................36
        Scheduled Principal Balance...................................................................36
        Senior Interest Distribution Amount...........................................................37
        Servicing Account.............................................................................37
        Servicing Advances............................................................................37
        Servicing Fee.................................................................................37
        Servicing Fee Rate............................................................................37
        Servicing Officer.............................................................................38
        Single Certificate............................................................................38
        S&P     ......................................................................................38
        Startup Day...................................................................................38
        Stated Principal Balance......................................................................38
        Stayed Funds..................................................................................39
        Stepdown Date.................................................................................39

                                                    v

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SECTION                                                                                               PAGE
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          Sub-Servicer..................................................................................39
          Sub-Servicing Account.........................................................................39
          Sub-Servicing Agreement.......................................................................39
          Substitution Shortfall Amount.................................................................39
          Tax Returns...................................................................................39
          Telerate Page 3750............................................................................39
          Termination Price.............................................................................39
          Terminator....................................................................................39
          Transfer......................................................................................39
          Transferee....................................................................................39
          Transferor....................................................................................40
          Trigger Event.................................................................................40
          Trust Fund....................................................................................40
          Trustee ......................................................................................40
          Trustee's Fee.................................................................................40
          Trustee's Fee Rate............................................................................40
          Uncertificated Balance........................................................................40
          Uncertificated Corresponding Component........................................................40
          Uncertificated Interest.......................................................................41
          Uncertificated Notional Amount................................................................41
          Uninsured Cause...............................................................................41
          United States Person..........................................................................41
          Value   ......................................................................................42
          Voting Rights.................................................................................42
1.02.     Allocation of Certain Interest Shortfalls.....................................................42

                                                ARTICLE II

                                       CONVEYANCE OF MORTGAGE LOANS;
                                     ORIGINAL ISSUANCE OF CERTIFICATES

2.01.     Conveyance of Mortgage Loans..................................................................44
2.02.     Acceptance of REMIC I by the Trustee..........................................................46
2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or the Depositor;
          Payment of Prepayment Charges in the event of breach..........................................47
2.04.     Representations and Warranties of the Depositor...............................................51
2.05.     Representations, Warranties and Covenants of the Master Servicer..............................52
2.06.     Issuance of Class R-I Certificates............................................................55
2.07.     Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by the Trustee................55
2.08.     Issuance of Class R-II Certificates...........................................................56
2.09.     Conveyance of REMIC II Regular Interests; Acceptance of REMIC III by the
          Trustee.......................................................................................56
2.10.     Issuance of REMIC III Certificates............................................................56

                                                    vi

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SECTION                                                                                               PAGE
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                                                ARTICLE III

                                       ADMINISTRATION AND SERVICING
                                           OF THE MORTGAGE LOANS

3.01.     Master Servicer to Act as Master Servicer.....................................................57
3.02.     Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................58
3.03.     Successor Sub-Servicers.......................................................................59
3.04.     Liability of the Master Servicer..............................................................60
3.05.     No Contractual Relationship Between Sub-Servicers and Trustee or
          Certificateholders............................................................................60
3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee..............................60
3.07.     Collection of Certain Mortgage Loan Payments..................................................61
3.08.     Sub-Servicing Accounts........................................................................61
3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................62
3.10.     Collection Account and Distribution Account...................................................62
3.11.     Withdrawals from the Collection Account and Distribution Account..............................65
3.12.     Investment of Funds in the Collection Account and the Distribution Account....................67
3.13.     [intentionally omitted].......................................................................68
3.14.     Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage................68
3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................69
3.16.     Realization Upon Defaulted Mortgage Loans.....................................................70
3.17.     Trustee to Cooperate; Release of Mortgage Files...............................................72
3.18.     Servicing Compensation........................................................................73
3.19.     Reports to the Trustee; Collection Account Statements.........................................74
3.20.     Statement as to Compliance....................................................................74
3.21.     Independent Public Accountants' Servicing Report..............................................74
3.22.     Access to Certain Documentation...............................................................75
3.23.     Title, Management and Disposition of REO Property.............................................75
3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls...............78
3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
          Payments......................................................................................79
3.26.     Advance Facility..............................................................................79

                                                   vii

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SECTION                                                                                               PAGE
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                                                ARTICLE IV

                                      PAYMENTS TO CERTIFICATEHOLDERS

4.01.     Distributions.................................................................................80
4.02.     Statements to Certificateholders..............................................................86
4.03.     Remittance Reports; P&I Advances..............................................................89
4.04.     Allocation of Realized Losses.................................................................91
4.05.     Compliance with Withholding Requirements......................................................93
4.06.     Commission Reporting..........................................................................93

                                                 ARTICLE V

                                             THE CERTIFICATES

5.01.     The Certificates..............................................................................94
5.02.     Registration of Transfer and Exchange of Certificates.........................................96
5.03.     Mutilated, Destroyed, Lost or Stolen Certificates............................................101
5.04.     Persons Deemed Owners........................................................................101
5.05.     Certain Available Information................................................................101

                                                ARTICLE VI

                                   THE DEPOSITOR AND THE MASTER SERVICER

6.01.     Liability of the Depositor and the Master Servicer...........................................103
6.02.     Merger or Consolidation of the Depositor or the Master Servicer..............................103
6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others.....................103
6.04.     Limitation on Resignation of the Master Servicer.............................................104
6.05.     Rights of the Depositor in Respect of the Master Servicer....................................105

                                                ARTICLE VII

                                                  DEFAULT

7.01.     Master Servicer Events of Default............................................................106
7.02.     Trustee to Act; Appointment of Successor.....................................................108
7.03.     Notification to Certificateholders...........................................................109
7.04.     Waiver of Master Servicer Events of Default..................................................110

                                               ARTICLE VIII

                                                   viii

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SECTION                                                                                               PAGE
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                                          CONCERNING THE TRUSTEE

8.01.     Duties of Trustee............................................................................111
8.02.     Certain Matters Affecting the Trustee........................................................112
8.03.     Trustee Not Liable for Certificates or Mortgage Loans........................................113
8.04.     Trustee May Own Certificates.................................................................113
8.05.     Trustee's Fees and Expenses..................................................................113
8.06.     Eligibility Requirements for Trustee.........................................................114
8.07.     Resignation and Removal of the Trustee.......................................................114
8.08.     Successor Trustee............................................................................115
8.09.     Merger or Consolidation of Trustee...........................................................116
8.10.     Appointment of Co-Trustee or Separate Trustee................................................116
8.11.     Appointment of Custodians....................................................................117
8.12.     Appointment of Office or Agency..............................................................117
8.13.     Representations and Warranties of the Trustee................................................117

                                                ARTICLE IX

                                                TERMINATION

9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................119
9.02      Additional Termination Requirements..........................................................121

                                                 ARTICLE X

                                             REMIC PROVISIONS

10.01.    REMIC Administration.........................................................................122
10.02.    Prohibited Transactions and Activities.......................................................124
10.03.    Master Servicer and Trustee Indemnification..................................................125

                                                ARTICLE XI

                                         MISCELLANEOUS PROVISIONS

11.01.    Amendment....................................................................................126
11.02.    Recordation of Agreement; Counterparts.......................................................127
11.03.    Limitation on Rights of Certificateholders...................................................127
11.04.    Governing Law................................................................................128
11.05.    Notices......................................................................................128
11.06.    Severability of Provisions...................................................................129
11.07.    Notice to Rating Agencies....................................................................129
11.08.    Article and Section References...............................................................130
11.09.    Grant of Security Interest...................................................................130
</TABLE>

                                       ix

<PAGE>

Exhibits
--------

Exhibit A-1       Form of Class A Certificate
Exhibit A-2       Form of Class M-1 Certificate
Exhibit A-3       Form of Class M-2 Certificate
Exhibit A-4       Form of Class M-3 Certificate
Exhibit A-5       Form of Class CE Certificate
Exhibit A-6       Form of Class P Certificate
Exhibit A-7       Form of Class R-I Certificate
Exhibit A-8       Form of Class R-II Certificate
Exhibit A-9       Form of Class R-III Certificate
Exhibit B         [Reserved]
Exhibit C-1       Form of Trustee's Initial Certification
Exhibit C-2       Form of Trustee's Interim Certification
Exhibit C-2       Form of Trustee's Final Certification
Exhibit D         Form of Mortgage Loan Purchase Agreement
Exhibit E-1       Request for Release
Exhibit E-2       Request for Release Mortgage Loans paid in full

Exhibit F-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of Class CE and Class P Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit G         Form of Certification with respect to ERISA and the Code
Exhibit H         Form of Custodial Agreement
Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule

<PAGE>

                   This Pooling and Servicing Agreement, is dated and effective
as of May 1, 2000, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                   The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
each REMIC (as defined herein) created hereunder. The Trust Fund will consist of
a segregated pool of assets comprising of the Mortgage Loans and certain other
related assets subject to this Agreement.

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

<TABLE>
<CAPTION>
                               REMIC I                       Initial                    Latest Possible
Designation                Remittance Rate            Uncertificated Balance            Maturity Date(1)
-----------                ---------------            ----------------------            ----------------
<S>                        <C>                        <C>                               <C>
   I-LT1                     Variable(2)                  $690,373,151.87                 May 15, 2030
   I-LT2                     Variable(2)                    $5,635,690.00                 May 15, 2030
   I-LT3                     Variable(2)                      $581,190.00                 May 15, 2030
   I-LT4                     Variable(2)                      $317,000.00                 May 15, 2030
   I-LT5                     Variable(2)                      $334,620.00                 May 15, 2030
   I-LT6                     Variable(2)                    $7,220,747.99                 May 15, 2030
   I-LTP                     Variable(2)                          $100.00                 May 15, 2030
</TABLE>

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

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

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

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

<PAGE>

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

<TABLE>
<CAPTION>
                              REMIC II                      Initial                     Latest Possible
Designation                Remittance Rate           Uncertificated Balance            Maturity Date(1)
-----------                ---------------           ----------------------            ----------------
<S>                        <C>                       <C>                               <C>
   II-LT1                    Variable(2)                $690,373,151.87                  May 15, 2030
   II-LT2                    Variable(2)                  $5,635,690.00                  May 15, 2030
   II-LT3                    Variable(2)                    $581,190.00                  May 15, 2030
   II-LT4                    Variable(2)                    $317,000.00                  May 15, 2030
   II-LT5                    Variable(2)                    $334,620.00                  May 15, 2030
   II-LT6                    Variable(2)                  $7,220,747.99                  May 15, 2030
   II-LTP                    Variable(2)                        $100.00                  May 15, 2030
  II-LT2S                    Variable(2)                      (3)                        May 15, 2030
  II-LT3S                    Variable(2)                      (3)                        May 15, 2030
  II-LT4S                    Variable(2)                      (3)                        May 15, 2030
  II-LT5S                    Variable(2)                      (3)                        May 15, 2030
</TABLE>

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

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

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

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

                                       2

<PAGE>

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

<TABLE>
<CAPTION>
                                                  Initial Aggregate               Latest Possible
 Designation           Pass-Through Rate    Certificate Principal Balance        Maturity Date(1)
 -----------           -----------------    -----------------------------        ----------------
<S>                    <C>                  <C>                                  <C>
Class A                   Variable(2)             $563,569,000.00                 May 15, 2030
Class M-1                 Variable(2)              $58,119,000.00                 May 15, 2030
Class M-2                 Variable(2)              $31,700,000.00                 May 15, 2030
Class M-3                 Variable(2)              $33,462,000.00                 May 15, 2030
Class CE                  Variable(2)              $17,612,399.87                 May 15, 2030
Class P                   Variable(2)                     $100.00                 May 15, 2030
</TABLE>

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

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

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

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

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

                  As of the Cut-off Date, the Original Mortgage Loans had an
aggregate Scheduled Principal Balance equal to $704,462,499.87.

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

                                       3

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

              SECTION 1.01. Defined Terms.

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

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

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

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

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

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom if applicable,
the mortgage recordation

                                       4

<PAGE>

information which has not been returned by the applicable recorder's office
and/or the assignee's name), which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.

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

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

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

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

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

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of Maryland or the State of New

                                       5
<PAGE>

York, or in the city in which the Corporate Trust Office of the Trustee is
located, are authorized or obligated by law or executive order to be closed.

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

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

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

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

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

                                       6
<PAGE>

II Regular Interests over (B) the then aggregate Certificate Principal Balances
of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding.

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

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

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

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 60.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period minus $5,283,469.

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

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

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
76.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$5,283,469.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form

                                       7
<PAGE>

annexed hereto as Exhibit A-3 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 85.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,283,469.

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

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $5,283,469.

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

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

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

                                       8
<PAGE>

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

                  "Closing Date":  May 10, 2000.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Norwest Bank
Minnesota, National Association, as Trustee, in trust for the registered holders
of Ameriquest Mortgage Securities Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 2000-1" The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

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

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

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class CE Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date.

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

                                       9
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       10
<PAGE>

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated F-1+ by Fitch (if rated by Fitch), P-1 by Moody's and A-1 by S&P (or
comparable ratings if Fitch, Moody's and S&P are not the Rating Agencies).

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

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

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

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Norwest Bank Minnesota, National Association, as Trustee, in trust for
the registered holders of Ameriquest Mortgage Securities Inc.,

                                       11
<PAGE>

Floating Rate Mortgage Pass-Through Certificates, Series 2000-1." The
Distribution Account must be an Eligible Account.

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

                  "Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.

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

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

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

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

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

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

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

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

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

                                       12
<PAGE>

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Depositor or the Master Servicer pursuant to or
as contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a
determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.

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

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

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

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

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

                                       13
<PAGE>

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

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

                  "Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificates and each
uncertificated Regular Interest, the period commencing on the Distribution Date
of the month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on the
Closing Date) and ending on the day preceding such Distribution Date.

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

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

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

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

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

                                       14
<PAGE>

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

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

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

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

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

                  "Master Servicer": Ameriquest Mortgage Company ("Ameriquest")
or any successor master servicer appointed as herein provided, in its capacity
as Master Servicer hereunder.

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

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

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

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

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

                                       15
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       16
<PAGE>

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

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

              (ii)    the Mortgagor's name;

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

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

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

              (vi)    the original months to maturity;

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

              (viii)  the Mortgage Rate in effect immediately following the
                      Cut-off Date;

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

              (x)     the stated maturity date;

              (xi)    the amount of the Monthly Payment due on the first Due
                      Date after the Cut-off Date;

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

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

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

              (xv)    the Gross Margin;

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

              (xvii)  the Maximum Mortgage Rate;

              (xviii) the Minimum Mortgage Rate;

              (xix)   the Mortgage Rate at origination;

                                       17
<PAGE>

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

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

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

              (xxiii) the risk grade;

              (xxiv)  the Value of the Mortgaged Property; and

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

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.

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

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

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.

                                       18
<PAGE>

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

                  "Mortgagor":  The obligor on a Mortgage Note.

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

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

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

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

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

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

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

                                       19
<PAGE>

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC II Regular
Interests (other than the Uncertificated Balance of REMIC II Regular Interest
II-LTP) for such Distribution Date.

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

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

                  "One-Month LIBOR Pass-Through Rate": With respect to the Class
A Certificates and REMIC II Regular Interest II-LT2 and any Distribution Date, a
per annum rate equal to One- Month LIBOR plus 0.32%, in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
remaining in the Trust Fund is reduced to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, or One-Month
LIBOR plus 0.64%, in the case of any Distribution Date thereafter.

                  With respect to the Class M-1 Certificates and REMIC II
Regular Interest II-LT3 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 0.57%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced

                                       20
<PAGE>

to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date, or One-Month LIBOR plus 0.855%, in the case of any
Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and REMIC II
Regular Interest II-LT4 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 0.95%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date, or One-Month LIBOR plus 1.425%, in the case of any
Distribution Date thereafter.

                  With respect to the Class M-3 Certificates and REMIC II
Regular Interest II-LT5 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 2.45%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date, or One-Month LIBOR plus 3.675%, in the case of any
Distribution Date thereafter.

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

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

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

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
over (b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates as of such
Distribution Date (after taking into account the payment of the amounts
described in clauses (b)(i) through (iv) of the definition of Principal
Distribution Amount on such Distribution Date).

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

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

                                       21
<PAGE>

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

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

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

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

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

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

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

                                       22
<PAGE>

         applied to an amount equal to the Uncertificated Balance of REMIC II
         Regular Interest II-LT6;

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

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

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

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

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

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

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

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

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

                           (ii) demand and time deposits in, certificates of
         deposit of, or bankers' acceptances (which shall each have an original
         maturity of not more than 90 days and, in the

                                       23
<PAGE>

         case of bankers' acceptances, shall in no event have an original
         maturity of more than 365 days or a remaining maturity of more than 30
         days) denominated in United States dollars and issued by, any
         Depository Institution;

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

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

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

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

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

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

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

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts

                                       24
<PAGE>

representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure of deed in lieu of foreclosure as
determined pursuant to Section 4.03.

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

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

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

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto). The
Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:

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

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

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

              (iv)    the term of the Prepayment Charge;

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

              (vi)    the principal balance of the related Mortgage Loan as of
                      the Cut-off Date;

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

              "Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in full or in part that was applied by the
Master Servicer to reduce the outstanding principal balance

                                       25
<PAGE>

of such loan on a date preceding the Due Date in the succeeding Prepayment
Period, an amount equal to interest at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
date on which the prepayment is applied and ending on the last day of the
related Prepayment Period. The obligations of the Master Servicer in respect of
any Prepayment Interest Shortfall are set forth in Section 3.24.

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

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

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

              (b)     the sum of:

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

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

                  (iii) the principal portion of all other unscheduled
                  collections (including, without limitation, Principal
                  Prepayments, Insurance Proceeds, Liquidation Proceeds and REO
                  Principal Amortization) received during the related Prepayment
                  Period, net of any portion thereof that represents a recovery
                  of principal for which an advance was made by the Master
                  Servicer pursuant to Section 4.03 in respect of a preceding
                  Distribution Date;

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

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

                  minus:

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

                                       26
<PAGE>

              "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest (without regard to
any prepayment charge that may have been collected by the Master Servicer in
connection with such payment of principal) representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.

              "PTCE":  A Prohibited Transaction Class Exemption.

              "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.11(ix) and 3.16(b), and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation.

              "Qualified Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) have a Minimum Mortgage
Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v)
have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi)
have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year

                                       27
<PAGE>

less than) that of the Deleted Mortgage Loan, (viii) have the same Due Date as
the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of
the date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan and (xi) conform to each representation and warranty set forth in Section 6
of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan.
In the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Rates, the risk gradings described in clause (x) hereof shall
be satisfied as to each such mortgage loan, the terms described in clause (vii)
hereof shall be determined on the basis of weighted average remaining terms to
maturity, the Loan-to-Value Ratios described in clause (ix) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xi) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.

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

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

              With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month

                                       28
<PAGE>

commencing with the calendar month in which such REO Property was acquired and
ending with the calendar month in which such Final Recovery Determination was
made, plus (iv) any amounts previously withdrawn from the Collection Account in
respect of the related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section
3.16(b), minus (v) the aggregate of all P&I Advances made by the Master Servicer
in respect of such REO Property or the related Mortgage Loan for which the
Master Servicer has been or, in connection with such Final Recovery
Determination, will be reimbursed pursuant to Section 3.23 out of rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property, minus (vi) the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property that has been, or
in connection with such Final Recovery Determination, will be transferred to the
Distribution Account pursuant to Section 3.23.

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

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

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

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

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

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

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

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

                                       29
<PAGE>

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

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

              "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amount), the Distribution Account
(other than any amounts representing any Master Servicer Prepayment Charge
Payment Amount) and any REO Account and such assets that are deposited therein
from time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, REMIC I specifically excludes all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with Principal Prepayments made
before the Cut-off Date.

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

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

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

                                       30
<PAGE>

I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I
Regular Interest I-LT5 and REMIC I Regular Interest I-LT6.

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

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

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

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

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

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

                                       31
<PAGE>

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

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

              "REMIC I Remittance Rate": With respect to each REMIC I Regular
Interest, the Net WAC Pass-Through Rate multiplied by the actual number of days
elapsed in the related Interest Accrual Period and divided by 360.

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

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

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

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

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

                                       32
<PAGE>

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

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

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

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

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

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

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

              "REMIC II Regular Interest II-LT3S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC

                                       33
<PAGE>

II. REMIC II Regular Interest II-LT3S shall accrue interest at the related REMIC
II Remittance Rate in effect from time to time on its related Uncertificated
Notional Amount.

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

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

              "REMIC II Remittance Rate": With respect to REMIC II Regular
Interest II-LT1, REMIC II Regular Interest II-LT6, REMIC II Regular Interest
II-LTP, the Net WAC Pass-Through Rate multiplied by the actual number of days
elapsed in the related Interest Accrual Period and divided by 360. With respect
to REMIC II Regular Interest II-LT2, REMIC II Regular Interest II- LT3, REMIC II
Regular Interest II-LT4 and REMIC II Regular Interest II-LT5, the lesser of (i)
the related One-Month LIBOR Pass-Through Rate (based on the actual number of
days elapsed in the applicable Interest Accrual Period and a 360-day year) and
(ii) the Net WAC Pass-Through Rate, multiplied by the actual number of days
elapsed in the related Interest Accrual Period divided by 360. With respect to
REMIC II Regular Interest II-LT2S, REMIC II Regular Interest II-LT3S, REMIC II
Regular Interest II-LT4S and REMIC II Regular Interest II-LT5S, a rate per annum
equal to excess of the REMIC I Remittance Rate for the related Uncertificated
Corresponding Component over the REMIC II Remittance Rate for REMIC II Regular
Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest
II-LT4 and REMIC II Regular Interest II-LT5, respectively.

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

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

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

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

              "Remittance Report": A report in form and substance that is
acceptable to the Trustee on a magnetic disk or tape prepared by the Master
Servicer pursuant to Section 4.03 with such additions, deletions and
modifications as agreed to by the Trustee and the Master Servicer.

                                       34
<PAGE>

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

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

              "REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.

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

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

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

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

              "Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $17,612,400, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
5.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) $5,283,469, and (iii) on or after the
Stepdown Date and a Trigger Event is in effect, the Required Overcollateralized
Amount for the immediately preceding Distribution Date.

              "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that

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<PAGE>

the Trustee can determine no such arithmetic mean, the lowest one-month U.S.
dollar lending rate which New York City banks selected by the Trustee are
quoting on such Interest Determination Date to leading European banks.

              "Residential Dwelling": Any one of the following: (i) an attached
or detached one- family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a detached or
attached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (unless such mobile or manufactured
home is defined as real property under applicable state law).

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

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

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

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

                                       36
<PAGE>

to the Scheduled Principal Balance of the related Mortgage Loan as of the Due
Date in the calendar month in which such REO Property was acquired, minus the
aggregate amount of REO Principal Amortization, if any, in respect of such REO
Property for all previously ended calendar months; and (b) as of any Due Date
subsequent to the occurrence of a Liquidation Event with respect to such REO
Property, zero.

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

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

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

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

              "Servicing Fee Rate":  0.50% per annum.

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

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

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<PAGE>

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

              "Startup Day": With respect to each of REMIC I, REMIC II and REMIC
III, the day designated as such pursuant to Section 10.01(b) hereof.

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

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

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

                                       38
<PAGE>

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

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

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

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

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

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

              "Termination Price":  As defined in Section 9.01.

              "Terminator":  As defined in Section 9.01.

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

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

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

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

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

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

                                       39
<PAGE>

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

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

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

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

              "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. With respect to any REMIC II Regular Interest
for any Distribution Date, one month's interest at the REMIC II Remittance Rate
applicable to such REMIC II Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of any REMIC I Regular Interest, REMIC
II Regular Interest II-LT1, REMIC II Regular Interest II-LT5, REMIC II Regular
Interest II-LT6, REMIC II Regular Interest II-LT2S, REMIC II Regular Interest
II-LT3S, REMIC II Regular Interest II-LT4S and REMIC II Regular Interest II-LT5S
shall accrue on the basis of a 360-day year consisting of twelve 30-day months;
Uncertificated Interest in respect of REMIC II Regular Interest II-LT2, REMIC II
Regular Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular
Interest II-LT5, shall accrue on the basis of a 360-day year and the actual
number

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<PAGE>

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

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

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

              "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust. To the extent prescribed in regulations by
the Secretary of the Treasury, which have not yet been issued, a trust which was
in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence. The term "United States" shall have the meaning set forth in Section
7701 of the Code.

              "Value": With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan,
provided, however, in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989.

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

                                       41
<PAGE>

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

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

              SECTION 1.02.         Allocation of Certain Interest Shortfalls.

              For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate and (2) the aggregate amount of any Realized
Losses incurred for any Distribution Date shall be allocated among the Class CE
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Notional Amount of each such Certificate.

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

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<PAGE>

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

                                       43
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

              SECTION 2.01. Conveyance of Mortgage Loans.

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

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

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

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

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

               (iv) the original recorded Assignment or Assignments of the
              Mortgage showing a complete chain of assignment from the
              originator to the Person assigning the Mortgage to the Trustee as
              contemplated by the immediately preceding clause (iii);

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

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

                                       44
<PAGE>

              were issued with or subsequent to the issuance of such policy,
              insuring the priority of the Mortgage as a first lien on the
              Mortgaged Property represented therein as a fee interest vested in
              the Mortgagor, or in the event such original title policy is
              unavailable, a written commitment or uniform binder or preliminary
              report of title issued by the title insurance or escrow company.

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

              If any of the documents referred to in Sections 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee, or to the appropriate
Custodian on behalf of the Trustee, of a copy of each such document certified by
the Originator in the case of (x) above or the applicable public recording
office in the case of (y) above to be a true and complete copy of the original
that was submitted for recording and (2) if such copy is certified by the
Originator, delivery to the Trustee, or to the appropriate Custodian on behalf
of the Trustee, promptly upon receipt thereof of either the original or a copy
of such document certified by the applicable public recording office to

                                       45
<PAGE>

be a true and complete copy of the original. If the original lender's title
insurance policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, promptly after receipt thereof,
the original lender's title insurance policy. The Depositor shall deliver or
cause to be delivered to the Trustee, or to the appropriate Custodian on behalf
of the Trustee, promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.

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

              SECTION 2.02. Acceptance of REMIC I by the Trustee.

              Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all other assets included
in the definition of "REMIC I" under clauses (i), (iii), (iv) and (v) (to the
extent of amounts deposited into the Distribution Account) and declares that it,
or such Custodian as its agent, holds and will hold such documents and the other
documents delivered to it constituting the Mortgage File, and that it holds or
will hold all such assets and such other assets included in the definition of
"REMIC I" in trust for the exclusive use and benefit of all present and future
Certificateholders.

              The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause a Custodian on its behalf to review) each Mortgage File on or
before the Closing Date and to certify in substantially the form attached hereto
as Exhibit C-1 (or cause the Custodian to certify in the form of the Initial
Certification attached to the Custodial Agreement) that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), the Trustee is in
possession of the Mortgage Note. Within 30 days following the Closing Date, the
Trustee agrees, for the benefit of the Certificateholders, to review (or cause a
Custodian on its behalf to review) each Mortgage File on or before the Closing
Date and to certify in substantially the form attached hereto as Exhibit C-2 (or
cause the Custodian to certify in the form of the Interim Certification attached
to the Custodial Agreement) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents

                                       46
<PAGE>

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

              Prior to the first anniversary date of this Agreement the Trustee
shall deliver to the Depositor and the Master Servicer a final certification in
the form annexed hereto as Exhibit C-3 (or shall cause the Custodian to deliver
to the Trustee, the Depositor and the Master Servicer a final certification in
the form attached to the Custodial Agreement) evidencing the completeness of the
Mortgage Files, with any applicable exceptions noted thereon.

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

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

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

              (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, the Mortgage File or
of the breach by the Originator of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders shall promptly notify the Originator and the
Master Servicer of such defect, missing document or breach and request that the
Originator deliver such missing document or cure such defect or breach within 90
days from the date the Originator was notified of such missing document, defect
or breach, and if the Originator does not deliver such missing document

                                       47
<PAGE>

or cure such defect or breach in all material respects during such period, the
Master Servicer (or, in accordance with Section 3.02(b), the Trustee) shall
enforce the obligations of the Originator under the Mortgage Loan Purchase
Agreement to repurchase such Mortgage Loan from REMIC I at the Purchase Price
within 90 days after the date on which the Originator was notified (subject to
Section 2.03(e)) of such missing document, defect or breach, if and to the
extent that the Originator is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Originator the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Originator shall furnish to it and as shall be necessary to vest in the
Originator any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Originator may cause such Mortgage Loan to
be removed from REMIC I (in which case it shall become a Deleted Mortgage Loan)
and substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood and
agreed that the obligation of the Originator to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.

              (b) Subject to Section 2.03(e), within 90 days of the earlier of
discovery by the Depositor or receipt of notice by the Depositor of the breach
of any representation or warranty of the Depositor set forth in Section 2.04
with respect to any Mortgage Loan, which materially adversely affects the value
of such Mortgage Loan or the interest therein of the Certificateholders, the
Depositor shall (i) cure such breach in all material respects, (ii) repurchase
the Mortgage Loan from REMIC I at the Purchase Price or (iii) remove such
Mortgage Loan from REMIC I (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d). If any such
breach is a breach of any of the representations and warranties included in
Section 2.04(a)(iv), and the Depositor is unable to cure such breach, the
Depositor shall repurchase or substitute the smallest number of Mortgage Loans
as shall be required to make such representation or warranty true and correct.
The Purchase Price for any repurchased Mortgage Loan shall be delivered to the
Master Servicer for deposit in the Collection Account, and the Trustee, upon
receipt of written certification from the Master Servicer of such deposit, shall
at the Depositor's direction release to the Depositor the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
furnished by the Depositor, in each case without recourse, as the Depositor
shall furnish to it and as shall be necessary to vest in the Depositor any
Mortgage Loan released pursuant hereto.

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

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<PAGE>

                      (ii) Within 90 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the Holders of the
Class P Certificates to any Prepayment Charge, the Master Servicer shall cure
such breach in all material respects. If the representation made by the Master
Servicer in Section 2.05(vii) is breached, the Master Servicer must pay into the
Collection Account the amount of the scheduled Prepayment Charge, less any
amount collected and paid by the Master Servicer into the Collection Account;
and if the covenant made by the Master Servicer in Section 2.05(viii) is
breached, the Master Servicer must pay into the Collection Account the amount of
the waived Prepayment Charge.

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

              As to any Deleted Mortgage Loan for which the Originator or the
Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Depositor, as the case
may be, delivering to the Trustee (or a Custodian on behalf of the Trustee), for
such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee (or a Custodian on behalf of the Trustee) shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents as specified in
Section 2.02 and deliver to the Depositor and the Master Servicer, with respect
to such Qualified Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit C-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver to the Depositor and the Master Servicer a certification
substantially in the form of Exhibit C-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of REMIC I and will be retained by the
Depositor or the Originator, as the case may be. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and the Depositor or the Originator, as the case may be, shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Depositor shall give or cause to be given written notice to
the Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof, and in the case
of a substitution effected by the Depositor, all applicable

                                       49
<PAGE>

representations and warranties thereof set forth in Section 2.04, in each case
as of the date of substitution.

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

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

              (e) Upon discovery by the Depositor, the Originator, the Master
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall within two Business Days give written notice thereof
to the other parties. In connection therewith, the Originator or the Depositor
shall repurchase or, subject to the limitations set forth in Section 2.03(d),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made by (i) the Originator, if the affected Mortgage
Loan's status as a non- qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator, under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.04, or if its status as a non-qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a),
if made by the Originator, or Section 2.03(b), if made by the Depositor. The
Trustee shall reconvey to the Depositor or the Originator, as the case may be,
the Mortgage Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Mortgage Loan repurchased for breach of
a representation or warranty.

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<PAGE>

              SECTION 2.04. Representations and Warranties of the Depositor.

              (a) The Depositor hereby represents and warrants to the Trustee
for the benefit of the Certificateholders that as of the Closing Date or as of
such other date specifically provided herein:

                (i) The information set forth in the Mortgage Loan Schedule for
              the Original Mortgage Loans is complete, true and correct in all
              material respects at the date or dates respecting which such
              information is furnished;

               (ii) As of April 30, 2000, the Monthly Payment due under each
              Original Mortgage Loan is not 30 or more days delinquent in
              payment and has not been 30 or more days delinquent in payment
              more than once in the twelve month period prior to the Cut-off
              Date (assuming that a "rolling" 30 day delinquency is considered
              to be one time delinquent);

              (iii) Each Original Mortgage Loan had an original term to maturity
              of not greater than 30 years; each Original Mortgage Loan is an
              adjustable-rate mortgage loan with payments due on the first day
              of each month and each such Mortgage Loan is fully amortizing;
              effective with the first payment due after each Adjustment Date,
              the monthly payment amount for each Original Mortgage Loan will be
              adjusted to an amount which would amortize fully the outstanding
              principal balance of such Mortgage Loan over its remaining term
              and pay interest at the Mortgage Rate so adjusted; on the first
              Adjustment Date and on each Adjustment Date thereafter the
              Mortgage Rate on each Original Mortgage Loan will be adjusted to
              equal the sum of the Index and the related Gross Margin, rounded
              to the nearest multiple of 0.125%, subject to the Periodic Rate
              Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate
              applicable to such Mortgage Loan;

              (iv) (A) No more than approximately 17.17%, approximately 6.67%,
         approximately 6.08%, approximately 3.40%, approximately 4.76%,
         approximately 5.12%, approximately 4.45%, approximately 5.60%,
         approximately 3.27%, approximately 3.44%, approximately 7.63% and
         approximately 3.51% of the Original Mortgage Loans, by outstanding
         principal balance of the Original Mortgage Loans as of the Cut-off
         Date, will be secured by Mortgaged Properties located in California,
         Florida, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New
         York, Ohio, Pennsylvania, Texas and Washington, respectively, and no
         more than approximately 3.00% of the Original Mortgage Loans, by
         outstanding principal balance of the Original Mortgage Loans as of the
         Cut-off Date, will be secured by Mortgaged Properties located in any
         other single state; (B) as of the Cut-off Date, no more than
         approximately 0.22% of the Original Mortgage Loans, by outstanding
         principal balance of the Original Mortgage Loans as of the Cut-off
         Date, are secured by Mortgaged Properties located in any one California
         zip code area, and no more than approximately 12.82% of the Original
         Mortgage Loans, by outstanding principal balance of the Original
         Mortgage Loans as of the Cut-off Date are secured by units in two- to
         four-family dwellings, condominiums, town houses, planned unit
         developments or manufactured housing; and (C) at least approximately
         87.18% of the Original Mortgage Loans, by outstanding principal balance
         of

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<PAGE>

         the Original Mortgage Loans as of the Cut-off Date, are secured by real
         property with a single family residence erected thereon;

            (v) If the Mortgaged Property securing an Original Mortgage Loan is
         identified in the Federal Register by the Federal Emergency Management
         Agency ("FEMA") as having special flood hazards, a flood insurance
         policy is in effect at the Closing Date which met the requirements of
         FEMA at the time such policy was issued;

           (vi) With respect to each Original Mortgage Loan, the Loan-to-Value
         Ratio was less than or equal to 90.00% at the origination of such
         Original Mortgage Loan; and

          (vii) With respect to at least approximately 94.14% of the Original
         Mortgage Loans by outstanding principal balance as of the Cut-off Date,
         at the time that the Mortgage Loan was made, the Mortgagor represented
         that the Mortgagor would occupy the Mortgaged Property as the
         Mortgagor's primary residence. With respect to approximately 5.86% of
         the Original Mortgage Loans by outstanding principal balance as of the
         Cut-off Date, at the time that the Mortgage Loan was made, the
         Mortgagor represented that the Mortgagor would occupy the Mortgaged
         Property as the Mortgagor's secondary residence or that the Mortgaged
         Property would be an investor property.

              (b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee or to a Custodian, as the case may be, and shall inure to
the benefit of the Certificateholders notwithstanding any restrictive or
qualified endorsement or assignment. Upon discovery by any of the Depositor, the
Master Servicer or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of any Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice to the other parties, and in no event later than two Business Days from
the date of such discovery. It is understood and agreed that the obligations of
the Depositor set forth in Section 2.03(b) to cure, substitute for or repurchase
a Mortgage Loan constitute the sole remedies available to the Certificateholders
or to the Trustee on their behalf respecting a breach of the representations and
warranties contained in this Section 2.04.

              SECTION 2.05. Representations, Warranties and Covenants of the
                            Master Servicer.

              The Master Servicer hereby represents, warrants and covenants to
the Trustee, for the benefit of each of the Trustee, the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:

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

                                       52
<PAGE>

              ensure its ability to enforce each Mortgage Loan and to service
              the Mortgage Loans in accordance with the terms of this Agreement;

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

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

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

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

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<PAGE>

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

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

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

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

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

              It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee or to a Custodian, as the case may be, and shall
inure to the benefit of the Trustee, the Depositor and the Certificateholders.
Upon discovery by any of the Depositor, the Master Servicer or the Trustee of a
breach of any of the foregoing representations, warranties and covenants which
materially and adversely affects the value of any Mortgage Loan, Prepayment
Charge or the interests therein of the Certificateholders, the party discovering
such breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Trustee. Subject to Section 7.01,
the obligation of the Master Servicer set forth in Section 2.03(c) to cure
breaches shall constitute the sole remedies against the Master Servicer
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.05. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the

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<PAGE>

Trustee on behalf of the Certificateholders, pursuant to the Mortgage Loan
Purchase Agreement signed by the Master Servicer in its capacity as Originator,
respecting a breach of the representations, warranties and covenants of the
Master Servicer in its capacity as Originator contained in such Mortgage Loan
Purchase Agreement.

              SECTION 2.06. Issuance of Class R-I Certificates.

              The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it, or any Custodian on its behalf, of the Mortgage
Files, subject to the provisions of Section 2.01 and Section 2.02, together with
the assignment to it of all other assets included in REMIC I, receipt of which
is hereby acknowledged. Concurrently with such assignment and delivery and in
exchange therefor, the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-I Certificates in
authorized denominations. The interests evidenced by the Class R-I Certificates,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Class R-I Certificateholders
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I
Certificates and the REMIC I Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-I Certificates and the REMIC I
Regular Interests, shall be as set forth in this Agreement.

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

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

              SECTION 2.08. Issuance of Class R-II Certificates.

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

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

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<PAGE>

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

              SECTION 2.10. Issuance of REMIC III Certificates.

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

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<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

              SECTION 3.01. Master Servicer to Act as Master Servicer.

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

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

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

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

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

To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall execute, at the
written

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<PAGE>

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

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

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

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

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

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

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

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<PAGE>

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

              (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

              SECTION 3.03. Successor Sub-Servicers.

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

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<PAGE>

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

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

              SECTION 3.04. Liability of the Master Servicer.

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

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

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

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

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

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<PAGE>

assuming party, except that (i) the Master Servicer shall not thereby be
relieved of any liability or obligations under any Sub-Servicing Agreement and
(ii) none of the Trustee, its designee or any successor Master Servicer shall be
deemed to have assumed any liability or obligation of the Master Servicer that
arose before it ceased to be the Master Servicer.

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

              SECTION 3.07. Collection of Certain Mortgage Loan Payments.

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

              SECTION 3.08. Sub-Servicing Accounts.

              In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event

                                       61
<PAGE>

more than two Business Days after the deposit of such funds into the clearing
account. The Sub- Servicer shall thereafter deposit such proceeds in the
Collection Account or remit such proceeds to the Master Servicer for deposit in
the Collection Account not later than two Business Days after the deposit of
such amounts in the Sub-Servicing Account. For purposes of this Agreement, the
Master Servicer shall be deemed to have received payments on the Mortgage Loans
when the Sub-Servicer receives such payments.

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

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

              SECTION 3.10. Collection Account and Distribution Account.

              (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall

                                       62
<PAGE>

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

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

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

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

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

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

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

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

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

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

              The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees or assumption fees and other similar fees and charges
need not be deposited by the Master Servicer in the Collection Account and
shall, upon collection, belong to the Master Servicer as additional compensation
for its servicing activities.

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<PAGE>

In the event the Master Servicer shall deposit in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding.

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

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

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

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

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

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

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

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

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

              (e) Promptly upon receipt of any Stayed Funds, whether from the
Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder. In addition, the Trustee shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.12(c) in
connection with losses realized on Permitted Investments with respect to funds
held in the Distribution Account.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                (ii) to pay to itself the Trustee's Fee and expenses pursuant to
              Section 8.05;

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

                (iv) to reimburse itself pursuant to Section 7.01 and Section
              7.02;

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

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

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

              (a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon and (ii) no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:

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

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

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

              (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution
Account,

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the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.

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

              SECTION 3.13. [intentionally omitted]

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

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

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<PAGE>

maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program).

              In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.

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

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

              The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer is authorized to enter into an assumption and modification agreement
from or with

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<PAGE>

the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of an assumption or substitution of liability agreement will
be retained by the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof or otherwise permitted under Section 3.01. The
Master Servicer shall notify the Trustee and any respective Custodian that any
such substitution or assumption agreement has been completed by forwarding to
the Trustee or to such Custodian, as the case may be, the executed original of
such substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

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

              SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

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

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increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses.

              (b) Notwithstanding the foregoing provisions of this Section 3.16
or any other provision of this Agreement, with respect to any Mortgage Loan as
to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:

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

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

              The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

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

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<PAGE>

              (c) The Master Servicer may at its option purchase from REMIC I
any Mortgage Loan or related REO Property that is 90 days or more delinquent,
which the Master Servicer determines in good faith will otherwise become subject
to foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price; provided, however, that the Master Servicer shall purchase any such
Mortgage Loans or related REO Properties on the basis of delinquency, purchasing
the most delinquent Mortgage Loans or related REO Properties first. The Purchase
Price for any Mortgage Loan or related REO Property purchased hereunder shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release or cause
to be released to the Master Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Master Servicer shall furnish and as shall be necessary
to vest in the Master Servicer title to any Mortgage Loan or related REO
Property released pursuant hereto.

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

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

              (a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Trustee and any related Custodian by a certification in the form of
Exhibit E-2 (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request, the
Trustee or such Custodian, as the case may be, shall promptly release the
related Mortgage File to the Master Servicer. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account or the Distribution Account.

              (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the

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<PAGE>

form of Exhibit E-l, release the related Mortgage File to the Master Servicer,
and the Trustee shall, at the direction of the Master Servicer, execute such
documents as shall be necessary to the prosecution of any such proceedings and
the Master Servicer shall retain such Mortgage File in trust for the benefit of
the Certificateholders. Such Request for Release shall obligate the Master
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee or to such Custodian when the need therefor by the
Master Servicer no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trustee or such Custodian to the Master
Servicer.

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

              SECTION 3.18. Servicing Compensation.

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

              Additional servicing compensation in the form of assumption fees,
late payment charges, NSF fees, reconveyance fees and other similar fees and
charges (other than Prepayment Charges) shall be retained by the Master Servicer
(subject to Section 3.24) only to the extent such fees or charges are received
by the Master Servicer. The Master Servicer shall also be entitled pursuant to
Section 3.11(a)(iv) to withdraw from the Collection Account, and pursuant to
Section 3.23(b) to

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<PAGE>

withdraw from any REO Account, as additional servicing compensation, interest or
other income earned on deposits therein, subject to Section 3.12 and Section
3.24. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including premiums for
the insurance required by Section 3.14, to the extent such premiums are not paid
by the related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided herein in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

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

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

              SECTION 3.20. Statement as to Compliance.

              The Master Servicer will deliver to the Trustee, the Depositor and
each Rating Agency on or before the April 30th of each calendar year commencing
in 2001, an Officers' Certificate stating, as to each signatory thereof, that
(i) a review of the activities of the Master Servicer during the preceding year
and of performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officers' knowledge, based on such
review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon the request and
at the expense of the requesting party, provided that such statement is
delivered by the Master Servicer to the Trustee.

              SECTION 3.21. Independent Public Accountants' Servicing Report.

              Not later than April 30th of each calendar year commencing in
2001, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established

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by the Mortgage Bankers Association of America, with respect to the servicing of
residential mortgage loans during the most recently completed fiscal year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those Sub-Servicers. Immediately upon receipt of
such report, the Master Servicer shall furnish a copy of such report to the
Trustee and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

              SECTION 3.22. Access to Certain Documentation.

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

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

              (a) The deed or certificate of sale of any REO Property shall be
taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.23 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of REMIC I (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year REMIC I acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee and
the Depositor an Opinion of Counsel, addressed to the Trustee and the Depositor,
to the effect that the holding by REMIC I of such REO Property subsequent to
three years after its acquisition will not result in the imposition

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on REMIC I, REMIC II or REMIC III of taxes on "prohibited transactions" thereof,
as defined in Section 860F of the Code, or cause any of REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC under Federal law at any time that any
Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by REMIC I, REMIC II or
REMIC III of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.

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

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

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

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

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

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

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              Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:

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

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

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

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

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

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

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

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

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

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

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

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

              (e) Subject to the time constraints set forth in Section 3.23(a),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.

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

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

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

              The Master Servicer shall deliver to the Trustee for deposit into
the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting solely from Principal Prepayments during the related Prepayment
Period and (ii) the amount of its aggregate Servicing Fee for the most recently
ended calendar month.

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

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

              SECTION 3.26. Advance Facility.

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

              (b) If an Advancing Person is entitled to reimbursement for any
particular P&I Advance or Servicing Advance as set forth in Section 3.26(a),
then the Master Servicer shall not be permitted to reimburse itself therefor
under Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section
3.11(a)(ix), but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(b) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to an
Advancing Person, reimbursements for P&I Advances and Servicing Advances from
the Distribution Account to the same extent the Master Servicer would have been
permitted to reimburse itself for such P&I Advances and/or Servicing Advances in
accordance with Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi)
or Section 3.11(a)(ix), as the case may be, had the Master Servicer made such
Advance or Servicing Advance.

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

              SECTION 4.01. Distributions.

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

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

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

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

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

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

                      (d) to the Holders of the REMIC I Regular Interest I-LT6,
                  1.00% of the amount remaining after application of clause (a),
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero and any remaining amount to the
                  Holders of the Class R-I Certificates;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  FOURTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the amounts distributed to the
                  Holders of the Class A Certificates pursuant to clause first
                  above, to the Holders of the Class M-1 Certificates pursuant
                  to clause second above and to the Holders of the Class M-2
                  Certificates pursuant to clause third above and (y) the Class
                  M-3 Principal Distribution Amount shall be distributed to the
                  Holders of the Class M-3 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero; and

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

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

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

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

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

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

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

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

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

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

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<PAGE>

                  (x) to the Trustee, the Verification Fee;

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

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

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

              (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance of
such Class of Certificates, or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.

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

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              (d) The rights of the Certificateholders to receive distributions
in respect of the Certificates, and all interests of the Certificateholders in
such distributions, shall be as set forth in this Agreement. Neither the Holders
of any Class of Certificates nor the Trustee nor the Master Servicer shall in
any way be responsible or liable to the Holders of any other Class of
Certificates in respect of amounts properly previously distributed on the
Certificates.

              (e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Certificates a notice to the effect that:

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

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

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

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

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REMIC I Regular Interest in reduction of the Uncertificated Balance thereof
pursuant to this Section 4.01.

              SECTION 4.02. Statements to Certificateholders.

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

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

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

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

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

                (v) the aggregate Stated Principal Balance of the Mortgage Loans
              and any REO Properties as of the close of business on such
              Distribution Date;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

              SECTION 4.03. Remittance Reports; P&I Advances.

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

              On or prior to each Master Servicer Reporting Date, the Master
Servicer shall provide in an electronic format acceptable to the Trustee the
data necessary for the Trustee to perform its verification duties set forth in
this Section 4.03(a). The Trustee or a third party reasonably acceptable to the
Trustee and the Depositor (the "Verification Agent") will perform such
verification duties and will use its best efforts to issue its findings in a
report (the "Verification Report") within ten (10) Business Days following the
Master Servicer Reporting Date; provided, however, that if the Verification
Agent is unable to issue the Verification Report within ten (10) Business Days
following the Master Servicer Reporting Date, the Verification Agent may issue
the Verification Report upon the completion of its verification duties. The
Trustee shall forward the Verification Report to the Master Servicer and shall
notify the Master Servicer if the Trustee has determined that the Master
Servicer did not deliver the appropriate Prepayment Charges to the Trustee in
accordance with Section 3.10 and Schedule 2 hereof. Such written notification
from the Trustee shall include the loan number, prepayment penalty code and
prepayment penalty amount as calculated by the Trustee or the Verification
Agent, as applicable, of each Mortgage Loan for which there is a discrepancy. If
the Master Servicer agrees with the verified amounts, the Master Servicer shall
adjust the immediately succeeding Remittance Report and the amount remitted to
the Trustee with respect to prepayments accordingly. If the Master Servicer
disagrees with the determination of the Trustee, the Master Servicer shall,
within five (5) Business Days of its receipt of the Verification Report, notify
the Trustee of such disagreement and provide the Trustee with detailed
information to support the Master Servicer's position. The Master Servicer and
the Trustee shall cooperate to resolve any

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discrepancy on or prior to the immediately succeeding Master Servicer Remittance
Date, and the Master Servicer will indicate the effect of such resolution on the
related Remittance Report and shall adjust the amount remitted with respect to
prepayments on such Master Servicer Remittance Date accordingly. During such
time as the Master Servicer and the Trustee are resolving discrepancies with
respect to the Prepayment Charges, no payments in respect of any disputed
Prepayment Charges will be remitted to the Collection Account and the Trustee
shall not be obligated to remit such payments, unless otherwise required
pursuant to Section 7.02 hereof.

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

              (b) The amount of P&I Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.03(d), the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.23 for
distribution on such Distribution Date.

              On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by

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telecopy by the close of business on any Master Servicer Remittance Date in the
event that the amount remitted by the Master Servicer to the Trustee on such
date is less than the P&I Advances required to be made by the Master Servicer
for the related Distribution Date.

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

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

              SECTION 4.04. Allocation of Realized Losses.

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

              (b) All Realized Losses on the Mortgage Loans allocated to any
REMIC II Regular Interest pursuant to Section 4.04(c), shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero and fifth, to the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as

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provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.

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

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

              (c) All Realized Losses on the Mortgage Loans shall be allocated
by the Trustee on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC I Regular Interest I-LT1 and REMIC I Regular
Interest I-LT6 up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT6 up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of REMIC
I Regular Interest I-LT1, REMIC I Regular Interest I-LT5 and REMIC I Regular
Interest I-LT6, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LT5 has been reduced to zero; fourth, to the
Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I Regular
Interest I-LT4 and REMIC I Regular Interest I-LT6, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC I Regular Interest I-LT4 has been
reduced to zero; fifth, to the Uncertificated Balances of REMIC I Regular
Interest I-LT1, REMIC I Regular Interest I-LT3 and REMIC I Regular Interest
I-LT6, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LT3 has been reduced to zero and sixth, to the Uncertificated
Balances of REMIC I Regular Interest I-LT1, REMIC I Regular Interest I-LT2 and
REMIC I Regular Interest I-LT6, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LT2 has been reduced to
zero.

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

              As used herein, an allocation of a Realized Loss on a "PRO RATA
basis" among the REMIC I Regular Interests (other than REMIC I Regular Interest
I-LTP) means an allocation on a PRO RATA basis among the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) on the

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basis of their then outstanding Uncertificated Balances, in each case prior to
giving effect to distributions to be made on such Distribution Date.

              SECTION 4.05. Compliance with Withholding Requirements.

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

              SECTION 4.06. Commission Reporting.

              Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2001, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 31, 2001, the Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. Within three Business Days after filing any Form
8-K or Form 10-K pursuant to this Section 4.06, the Trustee shall deliver a copy
of such Form 8-K or Form 10-K, as the case may be, to the Depositor. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission.

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                                    ARTICLE V

                                THE CERTIFICATES

              SECTION 5.01. The Certificates.

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

              The Certificates will be substantially in the forms annexed hereto
as Exhibits A-1 through A-9. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.

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

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

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

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

              If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book- Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $10,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Master Servicer or the Trustee shall be liable for any delay in the delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

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              SECTION 5.02. Registration of Transfer and Exchange of
                            Certificates.

              (a) The Trustee shall cause to be kept at one of the offices or
agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.

              (b) No transfer of any Class CE Certificate, Class P Certificate
or Residual Certificate shall be made unless that transfer is made pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer of
a Class CE Certificate, Class P Certificate or Residual Certificate is to be
made without registration or qualification (other than in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee and the Certificate Registrar shall each require receipt
of: (i) if such transfer is purportedly being made in reliance upon Rule 144A
under the 1933 Act, written certifications from the Certificateholder desiring
to effect the transfer and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee, the Master Servicer, in its
capacity as such, or the Trust Fund), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. None of the Depositor, the Certificate Registrar or
the Trustee is obligated to register or qualify the Class CE Certificates, the
Class P Certificates or the Residual Certificates under the 1933 Act or any
other securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a Class
CE Certificate, a Class P Certificate or a Residual Certificate shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

              (c) (i) No transfer of a Mezzanine Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101

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("Plan Assets") unless the Depositor, the Master Servicer and the Trustee are
provided with an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trustee and the Master Servicer that the purchase of such
Certificates is permissible under applicable law, will not constitute or result
in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Depositor, the Master Servicer, the Trustee or the Trust Fund to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Trustee or the Trust Fund. In lieu of such Opinion of Counsel, any
prospective Transferee of such Certificates may provide a certification (which
the Transferee will be deemed to have represented such certification) of the
foregoing in the form of Exhibit G to this Agreement (or other form acceptable
to the Depositor, the Trustee and the Master Servicer), which the Trustee may
rely upon without further inquiry or investigation. An Opinion of Counsel, any
certification or a deemed representation will not be required in connection with
the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor. The Transferee of a Mezzanine Certificate that is
a Plan, a Person acting, directly or indirectly, on behalf of any such Plan or a
person using Plan Assets to acquire Mezzanine Certificates will be deemed to
have represented that such acquisition is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Master Servicer,
the Trustee or the Trust Fund to any obligation in addition to those undertaken
in this Agreement and the following conditions are met: (a) the source of funds
used to purchase such Mezzanine Certificates is an "insurance company general
account" (as such term is defined in PTCE 95-60), (b) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied and (c) there is no Plan
with respect to which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer (or any "affiliate" thereof, as defined in PTCE
95-60) or by the same employee organization exceed 10% of the total of all
reserves and liabilities of such general account (as determined under PTCE
95-60) as of the date of the acquisition of such Mezzanine Certificates.

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

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

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

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

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

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

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

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                  an Ownership Interest in a Residual Certificate on behalf of,
                  a "pass-through interest holder."

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

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

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

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

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

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

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

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

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

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

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

              (i) The Trustee will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide notice to the Trustee of
each transfer of a Certificate and to provide

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the Trustee with an updated copy of the Certificate Register on the first
Business Day in January and June of each year, commencing in June 2000.

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

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

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

              SECTION 5.04. Persons Deemed Owners.

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

              SECTION 5.05. Certain Available Information.

              On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of the Class CE Certificates, Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate or any Person identified to the
Trustee as a prospective transferee of a Certificate, originals or copies of the
following items: (i) in the case of a Holder or prospective transferee of a
Class CE Certificate,

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a Class P Certificate or a Residual Certificate, the private placement
memorandum or other disclosure document relating to such Certificates, if any,
in the form most recently provided to the Trustee; and (ii) in all cases, (A)
this Agreement and any amendments hereof entered into pursuant to Section 11.01,
(B) all monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date, (C) all certifications delivered by a Responsible Officer of the
Trustee since the Closing Date pursuant to Section 10.01(h), (D) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date to evidence the Master Servicer's determination that any P&I
Advance or Servicing Advance was, or if made, would be a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively, and (E) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date pursuant to Section 4.04(a). Copies and mailing of any and all of
the foregoing items will be available from the Trustee upon request at the
expense of the person requesting the same.

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                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

                                      103
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disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind which, PRIMA
FACIE, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
and held harmless by the Trust Fund against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense relating to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor and the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, unless the Depositor or the Master Servicer acts without the consent of
Holders of Certificates entitled to at least 51% of the Voting Rights (which
consent shall not be necessary in the case of litigation or other legal action
by either to enforce their respective rights or defend themselves hereunder),
the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder) shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.11, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account.

              SECTION 6.04. Limitation on Resignation of the Master Servicer.

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

              Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, nor delegate to or subcontract with, nor authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of

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the Master Servicer are transferred to a successor master servicer, the entire
amount of the Servicing Fee and other compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer.

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

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

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                                   ARTICLE VII

                                     DEFAULT

              SECTION 7.01. Master Servicer Events of Default.

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

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

               (ii) any failure on the part of the Master Servicer duly to
              observe or perform in any material respect any of the covenants or
              agreements on the part of the Master Servicer contained in the
              Certificates or in this Agreement (or, if the Master Servicer is
              the Originator, the failure of the Originator to repurchase a
              Mortgage Loan as to which a breach has been established that
              requires a repurchase pursuant to the terms of Section 7 of the
              Mortgage Loan Purchase Agreement) which continues unremedied for a
              period of 45 days after the earlier of (i) the date on which
              written notice of such failure, requiring the same to be remedied,
              shall have been given to the Master Servicer by the Depositor or
              the Trustee, or to the Master Servicer, the Depositor and the
              Trustee by the Holders of Certificates entitled to at least 25% of
              the Voting Rights and (ii) actual knowledge of such failure by a
              Servicing Officer of the Master Servicer; or

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

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

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

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

              (vii) any failure of the Master Servicer to make any P&I Advance
              on any Master Servicer Remittance Date required to be made from
              its own funds pursuant to Section 4.03 which continues unremedied
              until 3:00 p.m. New York time on the Business Day immediately
              following the Master Servicer Remittance Date.

If a Master Servicer Event of Default described in clauses (i) through (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee or
to the Trustee if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section
and, without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver on behalf of and at the
expense of the Master Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of P&I Advances or otherwise,
and shall continue to be entitled to the benefits of Section 6.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.01, the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee

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assigned to and working in the Trustee's Corporate Trust Office has actual
knowledge thereof or unless written notice of any event which is in fact such a
Master Servicer Event of Default is received by the Trustee and such notice
references the Certificates, REMIC I or this Agreement.

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

              SECTION 7.02. Trustee to Act; Appointment of Successor.

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

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successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Pending appointment of a successor
to the Master Servicer under this Agreement, the Trustee shall act in such
capacity as hereinabove provided.

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

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

              SECTION 7.03. Notification to Certificateholders.

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

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

              SECTION 7.04. Waiver of Master Servicer Events of Default.

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

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

              SECTION 8.01. Duties of Trustee.

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

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

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

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

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

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

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              SECTION 8.02. Certain Matters Affecting the Trustee.

              (a)     Except as otherwise provided in Section 8.01:

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

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

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

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

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

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

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

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

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

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

              SECTION 8.04. Trustee May Own Certificates.

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

              SECTION 8.05. Trustee's Fees and Expenses.

              (a) The Trustee shall withdraw from the Distribution Account on
each Distribution Date and pay to itself the Trustee Fee and, to the extent that
the funds therein are at anytime insufficient for such purpose, the Depositor
shall pay such fees. The Trustee, or any director, officer, employee or agent of
the Trustee, shall be indemnified by REMIC I and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee, including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee in connection with any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or expense (i) resulting from the Master
Servicer's actions or omissions in connection with this Agreement and the
Mortgage Loans, (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of

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obligations and duties hereunder or as a result of a breach of the Trustee's
obligations under Article X hereof. It is understood by the parties hereto that
a "claim" as used in the preceding sentence includes any claim for payment or
indemnification made by the Custodian under Section 2.6 or Section 3.2 of the
Custodial Agreement. Any amounts payable to the Trustee, or any director,
officer, employee or agent of the Trustee, in respect of the indemnification
provided by this paragraph (a), or pursuant to any other right of reimbursement
from the Trust Fund that the Trustee, or any director, officer, employee or
agent of the Trustee, may have hereunder in its capacity as such, may be
withdrawn by the Trustee from the Distribution Account at any time.

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

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

              SECTION 8.06. Eligibility Requirements for Trustee.

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

              SECTION 8.07. Resignation and Removal of the Trustee.

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

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

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

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

              SECTION 8.08. Successor Trustee.

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

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

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

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              SECTION 8.09. Merger or Consolidation of Trustee.

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

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

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

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

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

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

              SECTION 8.11. Appointment of Custodians.

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

              SECTION 8.12. Appointment of Office or Agency.

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

              SECTION 8.13. Representations and Warranties of the Trustee.

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

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

              (ii) The execution and delivery of this Agreement by the Trustee,
         and the performance and compliance with the terms of this Agreement by
         the Trustee, will not violate the Trustee's charter or bylaws or
         constitute a default (or an event which, with notice or lapse of time,
         or both, would constitute a default) under, or result in the breach of,
         any material

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         agreement or other instrument to which it is a party or which is
         applicable to it or any of its assets.

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

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

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

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

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                                   ARTICLE IX

                                   TERMINATION

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

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

              (b) The Master Servicer shall have the right (the party exercising
such right, the "Terminator"), to purchase all of the Mortgage Loans and each
REO Property remaining in REMIC I pursuant to clause (i) of the preceding
paragraph no later than the Determination Date in the month immediately
preceding the Distribution Date on which the Certificates will be retired;
provided, however, that the Terminator may elect to purchase all of the Mortgage
Loans and each REO Property remaining in REMIC I pursuant to clause (i) above
only if the aggregate Stated Principal Balance of the Mortgage Loans and each
REO Property remaining in the Trust Fund at the time of such election is less
than 10% of aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date. By acceptance of the Residual Certificates, the Holders of the
Residual Certificates agree, in connection with any termination hereunder, to
assign and transfer any amounts in excess of par, and to the extent received in
respect of such termination, to pay any such amounts to the Holders of the Class
CE Certificates.

              (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution

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on or before the Determination Date in such month, in each case specifying (i)
the Distribution Date upon which the Trust Fund will terminate and final payment
in respect of the REMIC I Regular Interests, the REMIC II Regular Interests and
the Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests, the REMIC II Regular Interests or the Certificates
from and after the Interest Accrual Period relating to the final Distribution
Date therefor and (iv) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Trustee. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with the purchase of all of the Mortgage Loans and each REO Property remaining
in REMIC I by the Terminator, the Terminator shall deliver to the Trustee for
deposit in the Distribution Account not later than the last Business Day of the
month next preceding the month of the final distribution on the Certificates an
amount in immediately available funds equal to the above-described purchase
price. Upon certification to the Trustee by a Servicing Officer of the making of
such final deposit, the Trustee shall promptly release or cause to be released
to the Terminator the Mortgage Files for the remaining Mortgage Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.

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

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

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              SECTION 9.02 Additional Termination Requirements.

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

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

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

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

              (b) At the expense of the applicable Terminator (or in the event
of termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each of REMIC I, REMIC
II and REMIC III pursuant to this Section 9.02.

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

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                                    ARTICLE X

                                REMIC PROVISIONS

              SECTION 10.01. REMIC Administration.

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

              (b) The Closing Date is hereby designated as the "Startup Day" of
REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the
Code.

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

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

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

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

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of "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.

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

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

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

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

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

              SECTION 10.02. Prohibited Transactions and Activities.

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

                                      124
<PAGE>

for any of REMIC I, REMIC II or REMIC III (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any of REMIC I, REMIC II or REMIC III after the Closing Date
(other than a Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee) that such sale, disposition, substitution, acquisition or contribution
will not (a) affect adversely the status of any of REMIC I, REMIC II or REMIC
III as a REMIC or (b) cause any of REMIC I, REMIC II or REMIC III to be subject
to a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.

              SECTION 10.03. Master Servicer and Trustee Indemnification.

              (a) The Trustee agrees to indemnify the Trust Fund, the Depositor
and the Master Servicer for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, caused solely by the Trustee's failure to act
in accordance with its standard of care set forth in this Article X.

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

                                      125
<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

              SECTION 11.01. Amendment.

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

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

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

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

                                      126
<PAGE>

              It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

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

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

              SECTION 11.02. Recordation of Agreement; Counterparts.

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

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

              SECTION 11.03. Limitation on Rights of Certificateholders.

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

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

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

                                      127
<PAGE>

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

              SECTION 11.04. Governing Law.

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

              SECTION 11.05. Notices.

              All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service, facsimile or delivered in any other manner specified herein,
to (a) in the case of the Depositor, 1100 Town & Country Road, Suite 1100,
Orange, California 92868, Attention: Capital Markets (telecopy number (714)
245-0198), or such other address or telecopy number as may hereafter be
furnished to the Master Servicer and the Trustee in writing by the Depositor,
(b) in the case of the Master Servicer, 1100 Town & Country Road, 11th Floor,
Orange, California 92868, Attention: General Counsel (telecopy number: (714)
564-9639), or such other address or telecopy number as may hereafter be
furnished to the Trustee and the Depositor in writing by the Master Servicer and
(c) in the case of the Trustee, 11000 Broken Land Parkway, Columbia, Maryland
21044, Attention: Securities Administration Services (telecopy number (410)
884-2360), with a copy to the Trustee at Sixth Street & Marquette Avenue, MAC
N9311-161 Minneapolis, Minnesota 55479, Attention: Corporate Trust Services
(telecopy number (612) 667-3539), or such other address or telecopy number as
may hereafter be furnished to the Master Servicer and the Depositor in writing
by the Trustee. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                                      128
<PAGE>

              SECTION 11.06. Severability of Provisions.

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

              SECTION 11.07. Notice to Rating Agencies.

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

              1.  Any material change or amendment to this Agreement;

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

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

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

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

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

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

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

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

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

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

              Any such notice pursuant to this Section 11.07 shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or

                                      129
<PAGE>

by express delivery service to Fitch IBCA, Inc., One State Street Plaza, New
York, New York 10004, Moody's Investors Service, 99 Church Street, New York, New
York 10007 and to Standard & Poor's, a division of the McGraw-Hill Companies,
Inc., 25 Broadway, New York, New York 10004, or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.

              SECTION 11.08. Article and Section References.

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

              SECTION 11.09. Grant of Security Interest.

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

                                      130
<PAGE>

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

                                            AMERIQUEST MORTGAGE SECURITIES INC.,
                                            as Depositor

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

                                            AMERIQUEST MORTGAGE COMPANY,
                                            as Master Servicer

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

                                            NORWEST BANK MINNESOTA,
                                            NATIONAL ASSOCIATION,
                                            as Trustee

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

<PAGE>

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

              On the __th day of __________, 2000, before me, a notary public in
and for said State, personally appeared ____________, known to me to be an
________________ of Ameriquest Mortgage Securities Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

              IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             -----------------------------
                                                     Notary Public

[Notarial Seal]

<PAGE>

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

              On the __th day of _________ 2000, before me, a notary public in
and for said State, personally appeared __________________, known to me to be a
_________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

              IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                               ---------------------------------
                                                          Notary Public

[Notarial Seal]

<PAGE>

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF NEW YORK  )

              On the 10th day of May 2000, before me, a notary public in and for
said State, personally appeared Randall S. Reider, known to me to be an
Assistant Vice President of Norwest Bank Minnesota, National Association, one of
the entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

              IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                               ---------------------------------
                                                          Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                           FORM OF CLASS A CERTIFICATE

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

Series 2000-1, Class A                  Aggregate Certificate Principal Balance
                                        of the Class A-1 Certificates as of the
Pass-Through Rate: Variable             Issue Date: $563,569,000.00

Date of Pooling and Servicing           Denomination:  $_____________
Agreement and Cut-off Date:
May 1, 2000                             Master Servicer:
                                        Ameriquest Mortgage Company
First Distribution Date:
June 15, 2000                           Trustee:  Norwest Bank Minnesota,
                                        National Association
No. ___
                                        Issue Date: May 10, 2000

                                        CUSIP:

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class A Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

<PAGE>

                                       -3-

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
0.32%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One- Month LIBOR plus 0.64% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                       -4-

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2
                                   -----------

                          FORM OF CLASS M-1 CERTIFICATE

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

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

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

Series 2000-1, Class M-1                Aggregate Certificate Principal Balance
                                        of the Class M-1 Certificates as of the
Pass-Through Rate: Variable             Issue Date: $58,119,000.00

Date of Pooling and Servicing           Denomination:  $_____________
Agreement and Cut-off Date:
May 1, 2000                             Master Servicer:
                                        Ameriquest Mortgage Company
First Distribution Date:
June 15, 2000                           Trustee:  Norwest Bank Minnesota,
                                        National Association
No. ___
                                        Issue Date: May 10, 2000

                                        CUSIP:

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-1 Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -3-

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

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
0.57%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One- Month LIBOR plus 0.855% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in

<PAGE>

                                       -4-

authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3
                                   -----------

                          FORM OF CLASS M-2 CERTIFICATE

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

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

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

Series 2000-1, Class M-2                Aggregate Certificate Principal Balance
                                        of the Class M-2 Certificates as of the
Pass-Through Rate: Variable             Issue Date: $31,700,000.00

Date of Pooling and Servicing           Denomination:  $_____________
Agreement and Cut-off Date:
May 1, 2000                             Master Servicer:
                                        Ameriquest Mortgage Company
First Distribution Date:
June 15, 2000                           Trustee:  Norwest Bank Minnesota,
                                        National Association
No. ___
                                        Issue Date: May 10, 2000

                                        CUSIP:

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

            FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                  AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-2 Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                  -3-

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

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
0.95%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One- Month LIBOR plus 1.425% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                  -4-

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                              EXHIBIT A-4
                              -----------

                     FORM OF CLASS M-3 CERTIFICATE

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

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

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

Series 2000-1, Class M-3                Aggregate Certificate Principal Balance
                                        of the Class M-3 Certificates as of the
Pass-Through Rate: Variable             Issue Date: $33,462,000.00

Date of Pooling and Servicing           Denomination:  $_____________
Agreement and Cut-off Date:
May 1, 2000                             Master Servicer:
                                        Ameriquest Mortgage Company
First Distribution Date:
June 15, 2000                           Trustee:  Norwest Bank Minnesota,
                                        National Association
No. ___
                                        Issue Date: May 10, 2000

                                        CUSIP:

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-3 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-3 Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final

<PAGE>

                                       -3-

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

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
2.45%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One- Month LIBOR plus 3.675% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in

<PAGE>

                                       -4-

authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                          FORM OF CLASS CE CERTIFICATE

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

         THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
         OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
         DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
         THIS CERTIFICATE IS MAY 10, 2000. BASED ON THE OID
         REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
         28% CONSTANT PREPAYMENT RATE, USED SOLELY FOR THE PURPOSES OF
         APPLYING THE OID RULES TO THE CERTIFICATES (THE "PREPAYMENT
         ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE
         THAN $______ OF OID PER $100,000 OF INITIAL NOTIONAL AMOUNT,
         THE YIELD TO MATURITY IS ______% AND THE AMOUNT OF OID
         ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
         $____ PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED UNDER
         THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
         LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT
         ASSUMPTION OR AT ANY OTHER RATE.

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
         SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
         TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
         LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
         STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
         PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
         OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
         THE EMPLOYEE RETIREMENT INCOME SECURITY

<PAGE>

         ACT OF 1974, AS AMENDED ("ERISA"), OR THE CODE WILL BE
         REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
         HEREIN.

Series 2000-1, Class CE                 Aggregate Certificate Principal Balance
                                        of the Class CE Certificates as of the
Pass-Through Rate: Variable             Issue Date: $17,612,399.87

Date of Pooling and Servicing           Denomination:  $_____________
Agreement and Cut-off Date:
May 1, 2000                             Master Servicer:
                                        Ameriquest Mortgage Company
First Distribution Date:
June 15, 2000                           Trustee:  Norwest Bank Minnesota,
                                        National Association
No. ___
                                        Issue Date: May 10, 2000
Aggregate Notional Amount of Class
CE Certificates as of the Issue Date:
$704,462,499.87

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class CE Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                  -4-

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

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                  -5-

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

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                  -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6
                                   -----------

                           FORM OF CLASS P CERTIFICATE

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

         THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
         OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
         DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
         THIS CERTIFICATE IS MAY 10, 2000. BASED ON THE OID
         REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
         28% CONSTANT PREPAYMENT RATE, USED SOLELY FOR THE PURPOSES OF
         APPLYING THE OID RULES TO THE CERTIFICATES (THE "PREPAYMENT
         ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE
         THAN $______ OF OID PER $100,000 OF INITIAL NOTIONAL AMOUNT,
         THE YIELD TO MATURITY IS ______% AND THE AMOUNT OF OID
         ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
         $____ PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED UNDER
         THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
         LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT
         ASSUMPTION OR AT ANY OTHER RATE.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
         SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
         TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
         LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
         STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
         PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

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

<PAGE>

Series 2000-1, Class P                  Aggregate Certificate Principal Balance
                                        of the Class P Certificates as of the
Pass-Through Rate: Variable             Issue Date: $100.00

First Distribution Date:                Denomination:  $_____________
June 15, 2000
                                        Master Servicer:
No. _____                               Ameriquest Mortgage Company

                                        Trustee:  Norwest Bank Minnesota,
                                        National Association

                                        Issue Date: May 10, 2000

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
         BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
         HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
         BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
         ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
         ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class P Certificates, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of

<PAGE>

                                       -4-

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

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                       -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

                                       -7-

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

Dated: May __, 2000

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Trustee

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

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

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

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION
                                                     as Certificate Registrar

                                                     By:
                                                        ------------------------
                                                           Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

   TEN COM - as tenants in common           UNIF GIFT MIN ACT - Custodian
                                                              -------------
                                                             (Cust)  (Minor)
   TEN ENT - as tenants by the entireties                    under Uniform Gifts
                                                             to Minors Act
   JT TEN  - as joint tenants with right                _________________
             if survivorship and not as                       (State)
             tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.

Dated:

                                       _________________________________________
                                       Signature by or on behalf of assignor

                                       _________________________________________
                                       Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of ___________________________, account number_________________,
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-7
                                   -----------

                          FORM OF CLASS R-I CERTIFICATE

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

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
         SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
         TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
         LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
         STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
         PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

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

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

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
         AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
         THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
         POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
         INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
         OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
         COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
         EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
         SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
         511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
         1381(A)(2)(C) OF THE CODE (ANY SUCH

<PAGE>

                                      -11-

         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
         SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED
         ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION
         AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
         ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE
         SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
         NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER
         OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
         CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
         DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
         TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
         SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
         HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
         DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
         CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
         CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2000-1, Class R-I               Aggregate Certificate Principal Balance
                                       of the Class R-1 Certificates as of the
Date of Pooling and Servicing          Issue Date: $100.00% Percentage Interest
Agreement and Cut-off Date:
May 1, 2000                            Denomination: 100.00% Percentage Interest

First Distribution Date:               Master Servicer:
June 15, 2000                          Ameriquest Mortgage Company

No. _____                              Trustee:  Norwest Bank Minnesota,
                                       National Association

                                       Issue Date: May 10, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
     OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
     THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
     INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-I Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-I Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-I Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-I Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-I Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -4-

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

          This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

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

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-I Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-I Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this

<PAGE>

                                       -6-

Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

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

Dated: May __, 2000

                                        NORWEST BANK MINNESOTA,
                                        NATIONAL ASSOCIATION
                                        as Trustee

                                        By:___________________________________
                                                   Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        NORWEST BANK MINNESOTA,
                                        NATIONAL ASSOCIATION
                                        as Certificate Registrar

                                        By:___________________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common          UNIF GIFT MIN ACT -     Custodian
                                                             -------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                      _________________
           if survivorship and not as                        (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.

Dated:

                                        _____________________________________
                                        Signature by or on behalf of assignor

                                        _____________________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of __________________, account number _________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________
________________________________________________________________________. This
information is provided by ______________________________________, the assignee
named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-8
                                   -----------

                       FORM OF CLASS R-II CERTIFICATE

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

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

     THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
     PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
     TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

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

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

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
     THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
     ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
     ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
     AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
     ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
     THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
     CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
     SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
     1381(A)(2)(C) OF THE CODE (ANY SUCH

<PAGE>

     PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
     HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4)
     AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
     TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
     SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
     THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
     THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE
     OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
     ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
     REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
     WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
     CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
     LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
     HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
     HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
     PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
     REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
     IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
     CERTIFICATE.

Series 2000-1, Class R-II                   Aggregate Certificate Principal
                                            Balance of the Class R-II
Date of Pooling and Servicing Agreement     Certificates as of the Issue Date:
and Cut-off Date: May 1, 2000               100.00% Percentage Interest

First Distribution Date: June 15, 2000      Denomination: 100.00% Percentage
                                            Interest
No. ___
                                            Master Servicer: Ameriquest Mortgage
                                            Company

                                            Trustee: Norwest Bank Minnesota,
                                            National Association

                                            Issue Date: May 10, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-II Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-II Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-II Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-II Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-II Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -4-

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

          This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

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

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-II Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-II Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this

<PAGE>

                                       -6-

Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

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

Dated: May __, 2000

                                              NORWEST BANK MINNESOTA,
                                              NATIONAL ASSOCIATION
                                              as Trustee

                                              By:______________________________
                                                        Authorized Officer

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

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

                                              NORWEST BANK MINNESOTA,
                                              NATIONAL ASSOCIATION
                                              as Certificate Registrar

                                              By:______________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common          UNIF GIFT MIN ACT -     Custodian
                                                             -------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                      _________________
           if survivorship and not as                        (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________.
_______________________________________________________________________________

Dated:

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of __________________, account number _________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________
________________________________________________________________________. This
information is provided by ______________________________________, the assignee
named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-9
                                   -----------

                         FORM OF CLASS R-III CERTIFICATE

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

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

     THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
     PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
     TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
     PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

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

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

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
     MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
     THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
     ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
     ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
     AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
     ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
     THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
     CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
     SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
     1381(A)(2)(C) OF THE CODE (ANY SUCH

<PAGE>

     PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
     HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4)
     AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
     TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
     SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
     THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
     THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE
     OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
     ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
     REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
     WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
     CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
     LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
     HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
     HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
     PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
     REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
     IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
     CERTIFICATE.

Series 2000-1, Class R-III                  Aggregate Certificate Principal
                                            Balance of the Class R-III
Date of Pooling and Servicing Agreement     Certificates as of the Issue Date:
and Cut-off Date: May 1, 2000               100.00% Percentage Interest

First Distribution Date: June 15, 2000      Denomination: 100.00% Percentage
                                            Interest
No. ___
                                            Master Servicer: Ameriquest Mortgage
                                            Company

                                            Trustee: Norwest Bank Minnesota,
                                            National Association

                                            Issue Date: May 10, 2000

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

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

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-III Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-III Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-III Certificates on such
Distribution Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-III Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R-III Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -4-

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

          This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

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

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-III Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-III Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this

<PAGE>

                                       -6-

Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

          The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

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

Dated: May __, 2000

                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION
                                          as Trustee

                                          By:__________________________________
                                                     Authorized Officer

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

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

                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION
                                          as Certificate Registrar

                                          By:__________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common          UNIF GIFT MIN ACT -     Custodian
                                                             -------------
                                                             (Cust)  (Minor)
TEN ENT - as tenants by the entireties                       under Uniform Gifts
                                                             to Minors Act
JT TEN  - as joint tenants with right                      _________________
           if survivorship and not as                        (State)
           tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:_________________________
_______________________________________________________________________________.

Dated:

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                          Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of __________________, account number _________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________
________________________________________________________________________. This
information is provided by ______________________________________, the assignee
named above, or ________________________________________, as its agent.

<PAGE>

                                    EXHIBIT B
                                    ---------

                                   [RESERVED]

<PAGE>

                                   EXHIBIT C-1
                                   -----------

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                             [Date]

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

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

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

Ladies and Gentlemen:

     Pursuant to Section 2.02 of the Pooling and Servicing Agreement, attached
hereto is the Custodial Initial Certification delivered by Chase Bank of Texas,
National Association, as Custodian, pursuant to the Custodial Agreement dated as
of May 10, 2000, by and among Norwest Bank Minnesota, National Association,
Ameriquest Mortgage Securities Inc., Ameriquest Mortgage Company and Chase Bank
of Texas, National Association.

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

                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

                                          By:__________________________________
                                          Name:
                                          Title:

<PAGE>

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

                     FORM OF TRUSTEE'S INTERIM CERTIFICATION

                                                 [Date]

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

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

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

Ladies and Gentlemen:

     Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Custodial Interim Certification delivered by
Chase Bank of Texas, National Association, as Custodian, pursuant to
the Custodial Agreement dated as of May 10, 2000, by and among Norwest
Bank Minnesota, National Association, Ameriquest Mortgage Securities
Inc., Ameriquest Mortgage Company and Chase Bank of Texas, National
Association.

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

                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

                                          By:__________________________________
                                          Name:
                                          Title:

<PAGE>

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

                  FORM OF TRUSTEE FINAL CERTIFICATION

                                             [Date]

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

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

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

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received:

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

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

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

     The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage

<PAGE>

File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.

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

                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

                                          By:__________________________________
                                          Name:
                                          Title:

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated May 5, 2000, between Ameriquest Mortgage Company, a Delaware corporation
(the "Originator") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

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

                  The Originator intends to sell the Mortgage Loans (as
hereinafter defined) to the Purchaser on the terms and subject to the conditions
set forth in this Agreement. The Purchaser will deposit the Mortgage Loans into
a mortgage pool comprising the trust fund. The trust fund will be evidenced by a
single series of floating rate mortgage pass-through certificates designated as
Series 2000-1, (the "Certificates"). The Certificates will consist of nine
classes of certificates. The Class CE Certificates, the Class P Certificates,
the Class R-I Certificates, the Class R-II Certificates and the Class R-III
Certificates (collectively, the "Non-offered Certificates") will be delivered to
the Originator as partial consideration for the Mortgage Loans as further
described below. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of May 1, 2000 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee (in such
capacity the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Originator agrees to
sell, and the Purchaser agrees to purchase, on or before May 10, 2000 (the
"Closing Date"), certain adjustable- rate conventional residential mortgage
loans (the "Mortgage Loans"), having an aggregate principal balance as of the
close of business on May 1, 2000 (the "Cut-off Date") of approximately
$704,462,500 (the "Closing Balance"), after giving effect to all payments due on
the Mortgage Loans on or before the Cut-off Date, whether or not received
including the right to any Prepayment Charges payable by the related Mortgagors
in connection with any Principal Prepayments on the Mortgage Loans.

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

<PAGE>

                                       -2-

                  SECTION 3. CONSIDERATION.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Originator in immediately available funds an amount
(the "Purchase Price") equal to the net sale proceeds of the Class A
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates and (ii) will have delivered to Ameriquest Securities
L.L.C., upon the order of the Originator, the Class CE Certificates, the Class P
Certificates, the Class R-I Certificates, the Class R-II Certificates and the
Class R-III Certificates (the "Ameriquest L.L.C. Certificates").

                           (b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after May 1, 2000 (the "Cut-off Date"), all other payments of
principal due and collected after the Cut-off Date, and all payments of interest
on the Mortgage Loans allocable to the period after the Cut-off Date. Any
payments (including Prepayment Charges) collected on or before the Cut-off Date,
including all scheduled payments of principal and interest due on or before the
Cut-off Date and collected after the Cut-off Date, shall belong to the
Originator.

                           (c) Pursuant to the Pooling and Servicing Agreement,
the Depositor will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Originator does
hereby sell and contribute, transfer, assign, set over and convey to the
Purchaser, without recourse but subject to the terms of this Agreement, all of
its right, title and interest in, to and under the Mortgage Loans, including the
related Prepayment Charges. The contents of each Mortgage File not delivered to
the Purchaser or to any assignee, transferee or designee of the Purchaser on or
prior to the Closing Date are and shall be held in trust by the Originator for
the benefit of the Purchaser or any assignee, transferee or designee of the
Purchaser. Upon the sale and contribution of the Mortgage Loans the ownership of
each Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Originator on or after the Closing Date shall
immediately vest in the Purchaser and shall be delivered immediately to the
Purchaser or as otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The
Originator will, on or prior to the Closing Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of Norwest Bank Minnesota, National
         Association, as Trustee, under the applicable agreement, without
         recourse," with all prior and intervening endorsements

<PAGE>

                                       -3-

         showing a complete chain of endorsement from the originator to the
         Person so endorsing to the Trustee;

                  (ii) the original Mortgage with evidence of recording thereon;

                  (iii) an original Assignment in blank;

                  (iv) the original recorded Assignment or Assignments of the
         Mortgage showing a complete chain of assignment from the originator to
         the Person assigning the Mortgage in blank as contemplated by the
         immediately preceding clause (iii);

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

                  (vi) the original lender's title insurance policy or an
         attorney's opinion of title, together with all endorsements or riders
         which were issued with or subsequent to the issuance of such policy,
         insuring the priority of the Mortgage as a first lien on the Mortgaged
         Property represented therein as a fee interest or leasehold vested in
         the Mortgagor.

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

<PAGE>

                                       -4-

Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the
Originator is unable to pay the cost of recording the Assignments of Mortgage,
such expense will be paid by the Trustee.

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

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

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

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Originator, and the assignee
shall succeed to the rights and obligations hereunder of the Purchaser. Any
expense reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Originator under this Agreement
will be promptly reimbursed by the Originator.

                           (e) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Originator shall either (i) deliver in escrow to the Purchaser
or to any assignee, transferee or designee of the Purchaser, for examination,
the Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage
Files available to the Purchaser or to any assignee, transferee or designee of
the

<PAGE>

                                       -5-

Purchaser for examination at the Custodian's offices in Houston, Texas. Such
examination may be made by the Purchaser or the Trustee, and their respective
designees, upon reasonable notice to the Originator (or the Custodian) during
normal business hours before the Closing Date and within 60 days after the
Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Originator, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.

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

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

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

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

                           (iii) The execution and delivery of this Agreement by
the Originator, the servicing of the Mortgage Loans by the Originator under the
Pooling and Servicing Agreement, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Originator and will
not (A) result in a breach of any term or provision of the charter or by-laws of
the Originator or (B)

<PAGE>

                                       -6-

conflict with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to which
the Originator is a party or by which it may be bound, or any statute, order or
regulation applicable to the Originator of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Originator; and the Originator is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Originator's knowledge, would in the
future materially and adversely affect, (x) the ability of the Originator to
perform its obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Originator taken as a whole;

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

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

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

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

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

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

                  (ii) [Reserved];

                  (iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;

<PAGE>

                                       -7-

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

                  (v) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of nondelinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;

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

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

                  (viii) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any valid right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such valid right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;

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

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

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

                  (xii) Neither the Originator nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written

<PAGE>

                                       -8-

instrument which has been recorded, if necessary, to protect the interests of
the Purchaser and which has been delivered to the Trustee); satisfied, canceled
or subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage; or
executed any instrument of release, cancellation, modification or satisfaction
with respect thereto;

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

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

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

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

                  (xvii) All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities and the Mortgaged

<PAGE>

                                       -9-

Property is lawfully occupied under applicable law except as may otherwise be
insured against by the lender's title insurance policy referred to in (xiii)
above.

                  (xviii) All parties which have had any interest in the
Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

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

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

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

                  (xxii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;

                  (xxiii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Originator have been capitalized under the
Mortgage or the related Mortgage Note;

                  (xxiv) The origination, collection and servicing practices
used by the Originator with respect to each Mortgage Loan have been in all
material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

<PAGE>

                                      -10-

                  (xxv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;

                  (xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;

                  (xxvii) No Mortgage Loan provides for primary mortgage
insurance;

                  (xxviii) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxix) below contain
a standard mortgagee clause naming the Originator or the original mortgagee, and
its successors in interest, as mortgagee, and the Originator has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

                  (xxix) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;

                  (xxx) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note; and the
Originator has not waived any default, breach, violation or event of
acceleration;

                  (xxxi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which, does not include (a) cooperatives or (b)
mobile homes and manufactured homes (as defined in the Fannie Mae
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured home was built under the Federal Manufactured Home
Construction and Safety Standards of 1976 or (ii) otherwise assumes the
characteristics of site-built housing and meets local building codes, is readily
marketable, has been permanently affixed to the site, is not in a mobile home
"park," and is treated as real property under the applicable state law. With
respect to any Mortgage Loan that is secured by a leasehold estate, (a) the
lease is valid, in full force and effect; (b)

<PAGE>

                                      -11-

all rents and other payments due under the lease have been paid; (c) the lessee
is not in default under any provision of the lease; (d) the term of the lease
exceeds the maturity date of the related Mortgage Loan by at least five years
and (e) the Mortgagee under the Mortgage Loan is given notice and an opportunity
to cure any defaults under the lease;

                  (xxxii) There is no obligation on the part of the Originator
or any other party under the terms of the Mortgage or related Mortgage Note to
make payments in lieu of or in addition to those made by the Mortgagor;

                  (xxxiii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

                  (xxxiv) Each Mortgage Loan was underwritten in accordance with
the Originator's underwriting guidelines;

                  (xxxv) The Mortgage File contains an appraisal which was
performed by an appraiser who satisfied, and which was conducted in accordance
with, all of the applicable requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended;

                  (xxxvi) None of the Mortgage Loans is a graduated payment
mortgage loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;

                  (xxxvii) With respect to each Mortgage Loan, no loan junior in
lien priority to such Mortgage Loan and secured by the related Mortgaged
Property was originated by the Originator at the time of origination of such
Mortgage Loan;

                  (xxxviii) The Mortgage Loans comply in all material respects
with the description set forth under the heading "The Mortgage Pool" in the
Depositor's Prospectus Supplement, dated May 5, 2000 (the "Prospectus
Supplement");

                  (xxxix) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, except as may be limited by
applicable law;

                  (xl) The information set forth in the Mortgage Loan Schedule
relating to the existence of a prepayment charge is complete, true and correct
in all material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms upon the full and voluntary prepayment by the
Mortgagor under applicable law (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights

<PAGE>

                                      -12-

generally; (2) the collectability thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary payoff; or (3) subsequent
changes in applicable law may limit or prohibit enforceability thereof); and

                  (xli) Each Mortgage Loan is an obligation that is principally
secured by real property for purposes of the REMIC Provisions of the Code.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Originator, the Purchaser or any
assignee, transferee or designee of the Purchaser of any materially defective
document in, or that any material document was not transferred by the Originator
(as listed on the Trustee's Preliminary Exception Report), as part of, any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, the party discovering the breach
shall give prompt written notice to the other. Within ninety (90) days of its
discovery or its receipt of notice of any such missing documentation which was
not transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty the Originator
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Originator cannot deliver such
missing document or such defect or breach cannot be cured, the Originator shall,
within 90 days of its discovery or receipt of notice, either (i) repurchase the
affected Mortgage Loan at a price equal to the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans. In the event that any Mortgage Loan is subject to a
breach of the representation and warranty in Section 6(xl) resulting in the
Master Servicer's inability to collect all or part of the Prepayment Charge from
the Mortgagor, in lieu of repurchase, the Originator shall be obligated to remit
to the Master Servicer (for deposit in the Collection Account) any shortfall in
the Prepayment Charge collected upon the Mortgagor's voluntary and full
principal prepayment.

         The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any

<PAGE>

                                      -13-

repurchase pursuant to this Section 7(a) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price in accordance with
Section 2.03 of the Pooling and Servicing Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement.

         In addition, upon discovery by the Originator, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering the breach shall give prompt written notice
within five Business Days to the others. Within ninety (90) days of its
discovery or its receipt of notice, the Originator promptly shall either (i)
repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, remit a Prepayment Charge
shortfall, repurchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Purchaser against the Originator respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 5 or Section 6. It is understood and agreed that the obligations of
the Originator set forth in this Section 7 to cure, repurchase or substitute for
a Mortgage Loan as to which a material document is missing constitute the sole
remedies of the Purchaser against the Originator respecting a missing document.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Originator under this Agreement shall be true and
                           correct in all material respects as of the date as of
                           which they are made and no event shall have occurred
                           which, with notice or the passage of time, would
                           constitute a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Originator shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation,

<PAGE>

                                      -14-

                           the Mortgage Loans) required to be so delivered by
                           the Purchaser pursuant to Section 2.01 of the Pooling
                           and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Originator on the Closing Date, against
delivery and release by the Originator to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Originator of the Purchase Price in immediately available funds.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                           (a)      An Officers' Certificate of the Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in
                                    the form of Exhibit 1 hereto, and attached
                                    thereto copies of the certificate of
                                    incorporation, by-laws and certificate of
                                    good standing of the Originator under the
                                    laws of Delaware and (ii) if the Class CE
                                    Certificates and Class P Certificates are
                                    offered pursuant to a Private Placement
                                    Memorandum, the Originator shall deliver an
                                    Officer's Certificate stating that the same
                                    information contained in such Private
                                    Placement Memorandum is true and accurate in
                                    all material respects;

                           (b)      An Officers' Certificate of the Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriter may rely, in
                                    the form of Exhibit 2 hereto, with respect
                                    to certain facts regarding the sale of the
                                    Mortgage Loans by the Originator to the
                                    Purchaser;

                           (c)      An Opinion of Counsel of the Originator,
                                    dated the Closing Date and addressed to the
                                    Purchaser and the Underwriter, substantially
                                    in the form attached hereto as Exhibit 3;

                           (d)      Such opinions of counsel from the
                                    Purchaser's or Originator's counsel as the
                                    Rating Agencies may request in connection
                                    with the sale of the Mortgage Loans by the
                                    Originator to the Purchaser or the
                                    Originator's execution and delivery of, or
                                    performance under, this Agreement and upon
                                    which the Underwriter may rely;

                            (e)     A letter from Deloitte & Touche L.L.P.,
                                    certified public accountants, dated the date
                                    hereof and to the effect that they have
                                    performed certain specified procedures as a
                                    result of which they determined that certain
                                    information of an accounting, financial or
                                    statistical nature set

<PAGE>

                                      -15-

                                    forth in the Prospectus Supplement, under
                                    the captions "Summary of Prospectus
                                    Supplement", "Risk Factors", "The Mortgage
                                    Pool", "Yield on the Certificates",
                                    "Description of the Certificates", and
                                    "Pooling and Servicing Agreement--The
                                    Originator and Master Servicer", agrees with
                                    the records of the Originator;

                            (f)     The Originator shall deliver for inclusion
                                    in the Prospectus Supplement under the
                                    captions "The Mortgage Pool--Underwriting
                                    Standards; Representations" and "Pooling and
                                    Servicing Agreement--The Originator and
                                    Master Servicer", or for inclusion in other
                                    offering material such publicly available
                                    information regarding its financial
                                    condition and its mortgage loan delinquency,
                                    foreclosure and loss experience,
                                    underwriting standards, lending activities
                                    and loan sales, production, and servicing
                                    and collection practices, and any similar
                                    nonpublic, unaudited financial information;
                                    and

                           (g)      Such further information, certificates,
                                    opinions and documents as the Purchaser or
                                    the Underwriter may reasonably request.

                  SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, prospectus
supplement, and private placement memorandum relating to the Certificates and
other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Originator's counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates, the
cost of outside special counsel that may be required for the Purchaser, the cost
of obtaining the documents referred to in Section 9(g) and the fees charged by
any rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Mortgage Loans are being serviced by the Originator in
accordance with the terms and provisions set forth in the Aggregation Facility,
as memorialized in the Letter Agreement dated February 22,

<PAGE>

                                      -16-

2000 (the "Aggregation Facility") between Salomon Brothers Realty Corp. and the
Originator, and it is understood and agreed by and between the Originator and
the Purchaser that the interim servicing arrangements under the Aggregation
Facility with the Originator will be superseded by the servicing arrangements
set forth in the Pooling and Servicing Agreement.

                  SECTION 12. [RESERVED]

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Originator's failure
to deliver the Mortgage Loans on or before the Closing Date. The Originator
hereby grants to the Purchaser a lien on and a continuing security interest in
the Originator's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Originator
of its obligation hereunder, and the Originator agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to the Purchaser's (i)
right, prior to the Closing Date, to reject any Mortgage Loan to the extent
permitted by this Agreement, and (ii) obligation to deliver or cause to be
delivered the consideration for the Mortgage Loans pursuant to Section 8 hereof.
Any Mortgage Loans rejected by the Purchaser shall concurrently therewith be
released from the security interest created hereby. The Originator agrees that,
upon acceptance of the Mortgage Loans by the Purchaser or its designee and
delivery of payment to the Originator, that its security interest in the
Mortgage Loans shall be released. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cu mulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite
1100, Orange, California 92868, Attention: General Counsel, or such other
address as may hereafter be furnished to the Originator in writing by the
Purchaser; if to the Originator, addressed to the Originator at 1100 Town &
Country Road, Suite 1100, Orange, California 92868, Attention: General Counsel,
or to such other address as the Originator may designate in writing to the
Purchaser.

<PAGE>

                                      -17-

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Originator and the
Purchaser agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agree ment and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. The Originator agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Originator herein or in any such
certificate or other instrument shall survive the delivery of and payment for
the Mortgage Loans and shall continue in full force and effect, notwithstanding
any restrictive or qualified endorsement on the Mortgage Notes and
notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

<PAGE>

                                      -18-

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Originator to the Purchaser as provided
in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Originator to the Purchaser and not as a pledge of the Mortgage Loans by the
Originator to the Purchaser to secure a debt or other obligation of the
Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Originator, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originator to the
Purchaser to secure a debt or other obligation of the Originator and (b) (1)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the
Originator to the Purchaser of a security interest in all of the Originator's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accor dance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account whether in the form of cash, instruments, securities
or other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the New York Uniform Commercial Code; and
(4) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to Section 4(d) hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Originator and the Purchaser shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

<PAGE>

                                      -19-

                  IN WITNESS WHEREOF, the Originator and the Purchaser have
caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                            AMERIQUEST MORTGAGE COMPANY

                                            By:____________________________
                                            Name:
                                            Title:

                                            AMERIQUEST MORTGAGE SECURITIES INC.

                                            By:____________________________
                                            Name:
                                            Title:

<PAGE>

                                                                       EXHIBIT 1

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

                  I, ______________ hereby certify that I am the duly appointed
_______________ of Ameriquest Mortgage Company, a Delaware corporation (the
"Originator"), and further certify, on behalf of the Originator, as follows:

                  1. Attached hereto as Exhibit A is a true and correct copy of
         the Certificate of Incorporation and By-laws of the Originator, both of
         which are in full force and effect on the date hereof. There has been
         no amendment or other document filed affecting the Certificate of
         Incorporation of the Originator since April 29, 1997, and no such
         amendment has been authorized. There has been no amendment or other
         document filed affecting the By-laws of the Originator since September
         14, 1994, and no such amendment has been authorized. Attached hereto as
         Exhibit B is a certificate of good standing, dated May __, 2000 issued
         by the State of Delaware with respect to the Originator. No event has
         occurred since the date thereof that has affected the good standing of
         the Originator under the laws of the State of Delaware.

                  2. There are no actions, suits or proceedings pending or, to
         the best of my knowledge, threatened against or affecting the
         Originator that, if adversely determined, individually or in the
         aggregate, would adversely affect the Originator's ability to perform
         its obligations under (i) the Mortgage Loan Purchase Agreement, dated
         May __, 2000 (the "Purchase Agreement") between the Originator and
         Ameriquest Mortgage Securities Inc. (the "Depositor") or (iii) the
         Pooling and Servicing Agreement, dated as of May 1, 2000 (the "Pooling
         and Servicing Agreement"), among the Depositor as depositor, the
         Originator as master servicer (in such capacity, the "Master Servicer")
         and Norwest Bank Minnesota, National Association as Trustee. No
         proceedings looking toward merger, consolidation or liquidation,
         dissolution or bankruptcy of the Originator are pending or
         contemplated.

                  3. Each person who, as an officer or representative of the
         Originator or the Master Servicer, signed the Purchase Agreement or the
         Pooling and Servicing Agreement and any other document delivered prior
         hereto or on the date hereof in connection with the purchase described
         in the Purchase Agreement, or the transactions described in the Pooling
         and Servicing Agreement was, at the respective times of such signing
         and delivery, and is now, duly elected or appointed, qualified and
         acting as such officer or representative, and the signatures of such
         persons appearing on such documents are their genuine signatures.

                  4. Each of the Mortgage Loans referred to in the Purchase
         Agreement and the Pooling and Servicing Agreement was originated in
         accordance with Section 6(xiv) of the Purchase Agreement.

                  5. All of the representations and warranties of the Originator
         under the Purchase Agreement, and of the Master Servicer under the
         Pooling and Servicing Agreement are true and correct in all material
         respects as of the Closing Date (subject, in the case of the Closing
         Schedule delivered pursuant to the Purchase Agreement, to such
         amendments thereto as were

<PAGE>

                                       -2-

         duly made on or before the date hereof) and no event has occurred
         which, with notice or the passage of time or both, would constitute a
         default under the Purchase Agreement, or an Event of Default under the
         Pooling and Servicing Agreement.

                  6. The information set forth in the Mortgage Loan Schedule
         attached as an exhibit to the Purchase Agreement and to the Pooling and
         Servicing Agreement is true and correct in all material respects.

                   7. The information regarding the Originator, its financial
         condition and its mortgage loan delinquency, foreclosure and loss
         experience, underwriting standards, lending activities and loan sales,
         production and servicing and collection practices, as is set forth
         herein is accurate in all material respects.

                  8. The information contained in the Prospectus Supplement,
         dated May __, 2000 relating to the Mortgage Loans, the Originator, and
         its loan portfolio, is true and accurate in all material respects and
         does not contain any untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading.

                  9. With respect to its sale of the Mortgage Loans and the
         related transactions and undertakings contemplated by the Purchase
         Agreement, the Originator has complied with all the obligations by
         which it is bound and has satisfied all the conditions on its part to
         be performed or satisfied prior to the Closing Date.

                  10. Capitalized terms used but not defined herein shall have
         the meanings assigned in the Purchase Agreement.

<PAGE>

                                       -3-

                  IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Originator.

Dated:   May __, 2000

                                                     By:
                                                        ------------------------
                                                     Name:
                                                     Title:

                  I, _______________, an ___________________ of Ameriquest
Mortgage Company hereby certify that _______________ is the duly appointed,
qualified and acting ______________ of the Originator and that the signature
appearing above is her genuine signature.

                  IN WITNESS WHEREOF, I have hereunto signed my name.

Dated:   May __,  2000

                                                     By:
                                                        ------------------------
                                                     Name:
                                                     Title:

<PAGE>

                                                                       EXHIBIT 2

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

                       Ameriquest Mortgage Securities Inc.
                Floating Rate Mortgage Pass-Through Certificates
                                  Series 2000-1

                                 CERTIFICATE OF
                           AMERIQUEST MORTGAGE COMPANY

                  Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Ameriquest Mortgage Company ("Ameriquest") to Ameriquest Mortgage
Securities Inc. (the "Depositor") pursuant to a Mortgage Loan Purchase
Agreement, dated May __, 2000 (the "Purchase Agreement") between Ameriquest and
the Depositor and the simultaneous issuance of Floating Rate Mortgage
Pass-Through Certificates, Series 2000-1, Class A, Class M-1, Class M-2, Class
M-3, Class CE, Class P, Class R-I, Class R-II and Class R-III (the
"Certificates"), pursuant to a Pooling and Servicing Agreement, dated as of May
1, 2000 (the "Pooling and Servicing Agreement") among the Depositor as
depositor, Ameriquest as master servicer (in such capacity, the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee (the
"Trustee"). In consideration for its purchase of the Mortgage Loans, the
Depositor will deliver to Ameriquest the Class CE, Class P, Class R-I, Class
R-II and Class R-III Certificates. The Depositor will sell the Class A, Class
M-1, Class M-2 and Class M-3 Certificates to Salomon Smith Barney Inc. (the
"Underwriter") for offer and sale pursuant to the terms of an Underwriting
Agreement, dated May __, 2000 (the "Underwriting Agreement"), between the
Depositor and the Underwriter. The Purchase Agreement, the Pooling and Servicing
Agreement and the Underwriting Agreement together, are hereinafter collectively
referred to as the "Agreements". Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Agreements.

                  The undersigned is a duly appointed ______________ of
Ameriquest and hereby certifies after reasonable investigation that:

         1. The transfer of the Mortgage Loans by the undersigned pursuant to
the Agreements was intended to be a sale and to be reported as such under
generally accepted accounting principles ("GAAP") and for federal income tax
purposes.

         2. In connection with the sale of the Mortgage Loans by the undersigned
pursuant to the Agreements, the undersigned (i) was solvent at all relevant
times prior thereto and was not rendered insolvent thereby, (ii) after giving
effect thereto, is able to pay its debts as they mature, (iii) was not left with
unreasonably small capital for the business in which engaged and proposed to be
engaged, (iv) had and has no intention of commencing any bankruptcy, insolvency
or similar proceeding, (v) did not and does not have any intent to hinder, delay
or defraud any of the undersigned's creditors, (vi) had a valid business reason
therefor and (vii) received new value and consideration constituting reasonably
equivalent value and fair consideration.

<PAGE>

                                       -2-

         3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Mortgage Loan or Certificate, except as
described in the Agreements.

         4. The factual assumptions in the Opinion Letter are accurate,
including without limitation the assumption that the Retained Certificates would
be carried on its balance sheet at a value which in its determination is equal
to an amount that is less than 10% of the Mortgage Loan Purchase Price as
defined in the Opinion Letter.

         The undersigned has executed this Certificate as of May __, 2000.

                                                     AMERIQUEST MORTGAGE COMPANY

                                                     By:
                                                        ------------------------
                                                     Name:
                                                     Title:

<PAGE>

                                                                       EXHIBIT 3

                 [FORM OF OPINION OF COUNSEL TO THE ORIGINATOR]

TO:  Addressees on Schedule A

                                             May __, 2000

       Re:      Ameriquest Mortgage Securities Inc.
                Floating Rate Mortgage Pass-Through Certificates
                Series 2000-1
                ------------------------------------------------

Ladies and Gentlemen:

         I am Senior Counsel of Ameriquest Mortgage Company (the "Company") and
have acted as counsel to the Company in connection with the servicing by the
Company of certain residential first mortgage loans (the "Mortgage Loans")
pursuant to the Pooling and Servicing Agreement, dated as of May 1, 2000 (the
"Pooling and Servicing Agreement"), among Ameriquest Mortgage Securities Inc. as
depositor (the "Depositor"), the Company and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"), relating to the issuance and sale by the
Depositor of Floating Rate Mortgage Pass-Through Certificates, Series 2000-1,
designated as the Class A, Class M-1, Class M-2, Class M-3, Class CE, Class P,
Class R-I, Class R-II and Class R-III (collectively, the "Certificates"). In
connection with the sale and servicing of the Mortgage Loans, the Company has
entered into the Custodial Agreement, dated as of May __, 2000, among the
Trustee, the Company, the Depositor and Chase Bank of Texas National Association
as custodian (the "Custodial Agreement") and the Mortgage Loan Purchase
Agreement, dated May __, 2000, between the Company and the Depositor (the
"Purchase Agreement"). The Purchase Agreement, the Custodial Agreement, the
Pooling and Servicing Agreement, are collectively referred to herein as the
"Agreements". Capitalized terms not defined herein have the meanings set forth
in the Agreements.

         As such counsel, I have examined original or reproduced or certified
copies of the certificate of incorporation and bylaws of the Company, as amended
to date, records of actions taken by the Board of Directors of the Company and
copies of the Agreements, the Prospectus Supplement, dated May __, 2000 (the
"Prospectus Supplement"), to the Prospectus, dated _____, 2000, relating to the
Class A, Class M-1, Class M-2 and Class M-3 Certificates. I have also examined
such other documents, papers, statutes and authorities as I deem necessary as a
basis for the opinions hereinafter set forth. In all such examinations made by
me in connection with this opinion, I have assumed the genuineness of all
signatures and the completeness and authenticity of all records and all
documents submitted to me as copies thereof. As to various matters of fact
relevant to the opinions hereinafter expressed, I have relied upon the
representations and warranties contained in the Agreements and statements and
certificates of officers and representatives of the Company. As to matters in
Paragraph 5 below with respect to which I opine based on my knowledge, I have
relied solely upon inquiries made to and responses received from officers and
representatives of the Company and the documents furnished to me by
representatives of the Company, which documents such

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
May __, 2000                                                             Page 2.

representatives have informed me include the only material indentures,
agreements and instruments to which the Company is a party or by which it or any
of its properties or assets are bound.

         In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.

         In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.

         I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of California.

         Based upon and subject to the foregoing, I am of the opinion that:

         1. The Company is duly authorized and qualified to transact any and all
business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of the Pooling and Servicing
Agreement.

         2. The Company has the power to engage in the transactions contemplated
by each and all of the Agreements and has all requisite power, authority and
legal right to execute and deliver the Agreements and any other documents
delivered in connection therewith and to perform and observe the terms and
conditions of such instruments.

         3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
May __, 2000                                                             Page 3.

         4. No consent, approval, authorization, license, permit or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of, or compliance by the Company with, any or all of
the Agreements or the consummation of the transactions contemplated by the
Agreements.

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

         [6. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which would
draw into question the validity of the Agreements, the Certificates or the
Mortgage Loans or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair materially
the ability of the Company to perform its obligations under the terms of the
Agreements.]

         7. Based upon my participation, nothing has come to my attention that
has caused me to believe that the information contained in the Prospectus
Supplement, dated May __, 2000 relating to the Mortgage Loans, the Originator,
and its loan portfolio, and with respect to any private placement memorandum or
other offering document, any information of a comparable nature, is true and
accurate and does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

<PAGE>

         This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.

                                           Respectfully submitted,

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

<PAGE>

                                   EXHIBIT E-1
                                   -----------

                               REQUEST FOR RELEASE
                             (for Trustee/Custodian)

Loan Information
----------------

         Name of Mortgagor:       __________________________________

         Master Servicer
         Loan No.:                __________________________________

Trustee/Custodian
-----------------

         Name:                    __________________________________

         Address:                 __________________________________
                                  __________________________________

         Trustee/Custodian
         Mortgage File No.:       __________________________________

Depositor
---------

         Name:                    AMERIQUEST MORTGAGE SECURITIES INC.

         Address:                 __________________________________

         Certificates:            Floating Rate Mortgage Pass-Through
                                  Certificates, Series 2000-1.

<PAGE>

          The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of Floating
Rate Mortgage Pass-Through Certificates, Series 2000-1, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of May 1, 2000, among the Trustee, the Depositor
and the Master Servicer (the "Pooling and Servicing Agreement").

( )  Promissory Note dated _______________, 19__, in the original principal sum
     of $__________, made by _____________________, payable to, or endorsed to
     the order of, the Trustee.

( )  Mortgage recorded on _________________________ as instrument no.
     ____________________ in the County Recorder's Office of the County of
     _________________, State of __________________ in book/reel/docket
     _________________ of official records at page/image _____________.

( )  Deed of Trust recorded on ___________________ as instrument no.
     ________________ in the County Recorder's Office of the County of
     _________________, State of ____________________ in book/reel/docket
     _________________ of official records at page/image ______________.

( )  Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
     ___________________ as instrument no. _________ in the County Recorder's
     Office of the County of _______________, State of _______________________
     in book/reel/docket ____________ of official records at page/image
     ____________.

( )  Other documents, including any amendments, assignments or other assumptions
     of the Mortgage Note or Mortgage.

( )  __________________________________________

( )  __________________________________________

( )  __________________________________________

( )  __________________________________________

          The undersigned Master Servicer hereby acknowledges and agrees as
follows:

          (1) The Master Servicer shall hold and retain possession of the
     Documents in trust for the benefit of the Trustee, solely for the purposes
     provided in the Agreement.

          (2) The Master Servicer shall not cause or permit the Documents to
     become subject to, or encumbered by, any claim, liens, security interest,
     charges, writs of attachment or other impositions nor shall the Master
     Servicer assert or seek to assert any claims or rights of setoff to or
     against the Documents or any proceeds thereof.

<PAGE>

          (3) The Master Servicer shall return each and every Document
     previously requested from the Mortgage File to the Trustee when the need
     therefor no longer exists, unless the Mortgage Loan relating to the
     Documents has been liquidated and the proceeds thereof have been remitted
     to the Collection Account and except as expressly provided in the
     Agreement.

          (4) The Documents and any proceeds thereof, including any proceeds of
     proceeds, coming into the possession or control of the Master Servicer
     shall at all times be earmarked for the account of the Trustee, and the
     Master Servicer shall keep the Documents and any proceeds separate and
     distinct from all other property in the Master Servicer's possession,
     custody or control.

Dated:

                                  [MASTER SERVICER]

                                  By:__________________________________________
                                  Name:
                                  Title:

<PAGE>

                                   EXHIBIT E-2
                                   -----------

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICERS' CERTIFICATE AND TRUST RECEIPT
                FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 2000-1

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:_________________           BORROWER'S NAME:________________________

COUNTY:______________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

______________________________          DATED:____________________

/ /   VICE PRESIDENT

/ /   ASSISTANT VICE PRESIDENT

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479

          Re:   Ameriquest Mortgage Securities Inc., Floating Rate
                Mortgage Pass-Through Certificates, Series 2000-1,
                Class ___, representing a ___% Class ___ Percentage Interest
                ------------------------------------------------------------

Ladies and Gentlemen:

     In connection with the transfer by ________________ (the "Transferor") to
________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

     Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of May 1, 2000, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Norwest Bank Minnesota, National Association as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

<PAGE>

     Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                  Very truly yours,

                                  [Transferor]

                                  By:____________________________
                                  Name:
                                  Title:

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                [Date]

Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479

           Re:  Ameriquest Mortgage Securities Inc., Floating Rate
                Mortgage Pass-Through Certificates, Series 2000-1,
                Class ___, representing a ___% Class ___ Percentage Interest
                ------------------------------------------------------------

Ladies and Gentlemen:

          In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

          1. The Transferee is a "qualified institutional buyer" as that term is
     defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
     "1933 Act") and has completed either of the forms of certification to that
     effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
     the sale to it is being made in reliance on Rule 144A. The Transferee is
     acquiring the Certificates for its own account or for the account of a
     qualified institutional buyer, and understands that such Certificate may be
     resold, pledged or transferred only (i) to a person reasonably believed to
     be a qualified institutional buyer that purchases for its own account or
     for the account of a qualified institutional buyer to whom notice is given
     that the resale, pledge or transfer is being made in reliance on Rule 144A,
     or (ii) pursuant to another exemption from registration under the 1933 Act.

          2. The Transferee has been furnished with all information regarding
     (a) the Certificates and distributions thereon, (b) the nature, performance
     and servicing of the Mortgage Loans, (c) the Pooling and Servicing
     Agreement referred to below, and (d) any credit enhancement mechanism
     associated with the Certificates, that it has requested.

<PAGE>

          All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of May 1, 2000, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company as Master Servicer and Norwest Bank Minnesota,
National Association as Trustee, pursuant to which the Certificates were issued.

                                  [TRANSFEREE]

                                  By:_____________________________
                                  Name:
                                  Title:

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Norwest Bank Minnesota, National Association as Trustee,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.

     ___  CORPORATION, ETC. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or any organization described in
          Section 501(c)(3) of the Internal Revenue Code of 1986.

     ___  BANK. The Transferee (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

     ___  SAVINGS AND LOAN. The Transferee (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least

_______________

1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.

<PAGE>

          $25,000,000 as demonstrated in its latest annual financial statements,
          A COPY OF WHICH IS ATTACHED HERETO.

     ___  BROKER-DEALER. The Transferee is a dealer registered pursuant to
          Section 15 of the Securities Exchange Act of 1934.

     ___  INSURANCE COMPANY. The Transferee is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

     ___  STATE OR LOCAL PLAN. The Transferee is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

     ___  ERISA PLAN. The Transferee is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

     ___  INVESTMENT ADVISOR. The Transferee is an investment advisor registered
          under the Investment Advisers Act of 1940.

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

          4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.

          5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Transferee may be in reliance on Rule 144A.

     ___    ___     Will the Transferee be purchasing the Certificates

<PAGE>

     Yes    No      only for the Transferee's own account?

          6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

          7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.

Dated:

                                  _______________________________________
                                  Print Name of Transferee

                                  By:____________________________________
                                  Name:
                                  Title:

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Norwest Bank Minnesota, National Association, as Trustee,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.

____      The Transferee owned $___________________ in securities (other than
          the excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

____      The Transferee is part of a Family of Investment Companies which owned
          in the aggregate $______________ in securities (other than the
          excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

          3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements,

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

          5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

          6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                  __________________________________________
                                  Print Name of Transferee or Advisor

                                  By:_______________________________________
                                  Name:
                                  Title:

                                  IF AN ADVISER:

                                  __________________________________________
                                  Print Name of Transferee

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

          The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:

          1. I am an executive officer of the Purchaser.

          2. The Purchaser is a "qualified institutional buyer", as defined in
     Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.

          3. As of the date specified below (which is not earlier than the last
     day of the Purchaser's most recent fiscal year), the amount of
     "securities", computed for purposes of Rule 144A, owned and invested on a
     discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser ______________________________________________________________

By:      (Signature) ___________________________________________________________

Name of Signatory ______________________________________________________________

Title __________________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

<PAGE>

                                   EXHIBIT F-2
                                   -----------

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK               )
                                : ss.:
COUNTY OF NEW YORK              )

          __________________________________________ , being duly sworn,
deposes, represents and warrants

as follows:

          1. I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Ameriquest Mortgage Securities Inc.,
Floating Rate Mortgage Pass-Through Certificates, Series 2000-1, [Class R-I]
[and Class R-II][Class R-III] (the "Class R Certificates"), on behalf of whom I
make this affidavit and agreement. Capitalized terms used but not defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement pursuant to which the Class R Certificates were issued.

          2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 199___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

          3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual

<PAGE>

interest, unless no significant purpose of the transfer is to impede the
assessment or collection of tax.

          4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

          5. The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

          6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.

          7. The Owner's taxpayer identification number is ___________________.

          8. The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(d) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

          9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

          10. The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class R Certificates, and hereby represents to and for the benefit of the
person from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.

          11. The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.

          12. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

<PAGE>

          13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

          14. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it knows, or knows facts that should lead it to believe, that any such
representations are false.

          15. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".

          16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                      [OWNER]

                                      By:______________________________
                                      Name:
                                      Title:    [Vice] President

ATTEST:

By:______________________________
Name:
Title:   [Assistant] Secretary

          Personally appeared before me the above-named ______________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200__.

                                          ______________________________
                                                Notary Public

                                          County of ____________________
                                          State of _____________________

                                          My Commission expires:

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK              )
                               : ss. :
COUNTY OF NEW YORK       )

          __________________________, being duly sworn, deposes, represents and
warrants as follows:

          1. I am a ____________________ of _____________________________ (the
"Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.

          2. The Owner is not transferring the [Class R-I][Class R-II][Class
R-III] (the "Residual Certificates") to impede the assessment or collection of
any tax.

          3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

          4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-2. The Owner does not know or believe that
any representation contained therein is false.

          5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.

          6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement.

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                            [OWNER]

                                            By:______________________________
                                            Name:
                                            Title:    [Vice] President

ATTEST:

By:______________________________
Name:
Title:    [Assistant] Secretary

          Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200__.

                                          ____________________________________
                                                     Notary Public

                                          County of __________________________
                                          State of ___________________________

                                          My Commission expires:

<PAGE>

                                    EXHIBIT G
                                    ---------

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                   _____________, 200__

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

Norwest Bank Minnesota,
National Association
11000 Broken Land Parkway
Columbia, Maryland 21044-3562
Attention:  Corporate Trust Administration

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

                 Re:  Ameriquest Mortgage Securities Inc.
                      Floating Rate Mortgage Pass-Through Certificates,
                      Series 2000-1, Class ___
                      -------------------------------------------------

Dear Sirs:

          __________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc. Floating
Rate Mortgage Pass-Through Certificates, Series 2000-1, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of May 1, 2000 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Norwest Bank Minnesota,
National Association as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined shall have the meanings assigned thereto in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Master
Servicer that the following statements in either (1) or (2) are accurate:

     _____ (1) The Certificates (i) are not being acquired by, and will not be
     transferred to, any employee benefit plan within the meaning of section
     3(3) of the Employee Retirement Income Security Act of 1974, as amended
     ("ERISA"), or other retirement arrangement, including individual retirement
     accounts and annuities, Keogh plans and bank collective investment funds
     and insurance company general or separate accounts in which such plans,
     accounts or arrangements are invested, that is subject to Section 406 of
     ERISA or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
     (any of the

<PAGE>

     foregoing, a "Plan"), (ii) are not being acquired with "plan assets" of a
     Plan within the meaning of the Department of Labor ("DOL") regulation, 29
     C.F.R. ss. 2510.3-101, and (iii) will not be transferred to any entity that
     is deemed to be investing in plan assets within the meaning of the DOL
     regulation at 29 C.F.R. ss. 2510.3-101; or

     _____ (2) The purchase of Certificates is permissible under applicable law,
     will not constitute or result in any prohibited transaction under ERISA or
     Section 4975 of the Code, will not subject the Depositor, the Trustee or
     the Master Servicer to any obligation in addition to those undertaken in
     the Pooling and Servicing Agreement and the transferee is an insurance
     company and (A) the source of funds used to purchase such Certificate is an
     "insurance company general account" (as such term is defined in PTCE
     95-60), (B) the conditions set forth in PTCE 95-60 have been satisfied and
     (C) there is no Plan with respect to which the amount of such general
     account's reserves and liabilities for contracts held by or on behalf of
     such Plan and all other Plans maintained by the same employer (or any
     "affiliate" thereof, as defined in PTCE 95-60) or by the same employee
     organization, exceeds 10% of the total of all reserves and liabilities of
     such general account (as determined under PTCE 95-60) as of the date of the
     acquisition of such Certificates.

                                        Very truly yours,

                                        ____________________________________

                                        By:_________________________________
                                        Name:
                                        Title:

<PAGE>

                                    EXHIBIT H
                                    ---------

                           FORM OF CUSTODIAL AGREEMENT

<PAGE>

                                   Schedule 1
                                   ----------

                             MORTGAGE LOAN SCHEDULE

                              Provided Upon Request

<PAGE>

                                   Schedule 2
                                   ----------

                           PREPAYMENT CHARGE SCHEDULE

                           TO BE PROVIDED UPON REQUEST<PAGE>

================================================================================

                    CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

                                      Among

                        FOREST GLADE INTERNATIONAL, INC.

                                       and

                         THE INVESTORS SIGNATORY HERETO

                             Dated as of May 1, 2000

================================================================================

<PAGE>

         CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (this "Agreement"), dated as
of May 1, 2000, among Forest Glade International, Inc., a Nevada corporation
(and such other name that such entity may herewith be changed to, the
"Company"), and the investors signatory hereto (each such investor is a
"Purchaser" and all such investors are, collectively, the "Purchasers").

         WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers and the
Purchasers, severally and not jointly, desire to purchase from the Company an
aggregate principal amount of $3,500,000 of the Company's 7% Convertible
Debentures, due May 1, 2003, which shall be in the form of Exhibit A (the
"Debentures"), and which are convertible into shares of the Company's common
stock, $.001 par value per share (the "Common Stock"). All references to $
(dollars) shall be to US$ (United States Dollars).

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy are hereby acknowledged, the Company and the Purchasers agree as
follows:

                                    ARTICLE I
                                PURCHASE AND SALE

          1.1      The Closing.

                   (a) The Closing. (a) Subject to the terms and conditions set
forth in this Agreement, the Company shall issue and sell to the Purchasers and
the Purchasers shall, severally and not jointly, purchase from the Company the
Debentures for an aggregate purchase price of $3,500,000. The closing of the
purchase and sale of the Debentures (the "Closing") shall take place at the
offices of Robinson Silverman Pearce Aronsohn & Berman LLP ("Robinson
Silverman"), 1290 Avenue of the Americas, New York, New York 10104, immediately
following the execution hereof or such later date as the parties shall agree.
The date of the Closing is hereinafter referred to as the "Closing Date."

                        (ii) On the Closing Date, the parties shall deliver or
shall cause to be delivered the following: (A) the Company shall deliver to each
Purchaser (1) Debentures in the aggregate principal amount indicated below such
Purchaser's name on the signature page to this Agreement, registered in the name
of such Purchaser, (2) a Common Stock purchase warrant, in the form of Exhibit
D, registered in the name of such Purchaser, pursuant to which such Purchaser
shall have the right to acquire the number of shares of Common Stock indicated
below such Purchaser's name on the signature page to this Agreement
(collectively, the "Warrants"), (3) a legal opinion of Camhy, Karlinsky & Stein
LLP, outside counsel to the Company, in the form of Exhibit C, (4) an executed
Registration Rights Agreement, dated the date hereof, among the Company and the
Purchasers, in the form of Exhibit B (the "Registration Rights Agreement"), (5)
Transfer Agent Instructions, in the form of Exhibit E, delivered to and
acknowledged by the Company's transfer agent (the "Transfer Agent
Instructions"); (6) an executed Stock Pledge Agreement, dated the date hereof,
in the form of Exhibit G, guaranteeing certain obligations of the Company under
the Registration Rights Agreement (the "Pledge Agreement"); and (7) an executed
Letter Agreement, dated the date hereof, among the Company and the Purchasers,
in form of Exhibit F (the "Letter

<PAGE>

Agreement"); and (B) each Purchaser shall deliver to the Company (1) the
purchase price indicated below such Purchaser's name on the signature page to
this Agreement in United States dollars in immediately available funds by wire
transfer to an account designated in writing by the Company for such purpose,
and (2) an executed Registration Rights Agreement, Letter Agreement and Pledge
Agreement.

                  1.2 Certain Defined Terms. For purposes of this Agreement,
"Conversion Price," "Original Issue Date" and "Trading Day" shall have the
meanings set forth in the Debentures; "Business Day" shall mean any day except
Saturday, Sunday and any day which shall be a federal legal holiday in the
United States or Canada or a day on which banking institutions in the State of
New York or the province of British Columbia, Canada are authorized or required
by law or other governmental action to close. A "Person" means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

          2.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Purchasers:

                   (a) Organization and Qualification. The Company is a
 corporation duly incorporated, validly existing and in good standing under the
 laws of the State of Nevada with the requisite corporate power and authority to
 own and use its properties and assets and to carry on its business as currently
 conducted. The Company has no subsidiaries other than as set forth in Schedule
 2.1 (a) (collectively the "Subsidiaries"). Each of the Subsidiaries is an
 entity, duly organized, validly existing and in good standing under the laws of
 the jurisdiction of its incorporation or organization (as applicable), with the
 requisite corporate power and authority to own and use its properties and
 assets and to carry on its business as currently conducted. Each of the Company
 and the Subsidiaries is duly qualified to do business and is in good standing
 as a foreign corporation in each jurisdiction in which the nature of the
 business conducted or property owned by it makes such qualification necessary,
 except where the failure to be so qualified or in good standing, as the case
 may be, could not, individually or in the aggregate, (x) adversely affect the
 legality, validity or enforceability of the Securities (as defined below) or
 any of this Agreement, the Registration Rights Agreement, the Transfer Agent
 Instructions, the Letter Agreement, the Pledge Agreement, the Debentures or the
 Warrants (collectively, the "Transaction Documents"), (y) have or result in a
 material adverse effect on the results of operations, assets, prospects, or
 condition (financial or otherwise) of the Company and the Subsidiaries, taken
 as a whole, or (z) adversely impair the Company's ability to perform fully on a
 timely basis its obligations under any of the Transaction Documents (any of
 (x), (y) or (z), a "Material Adverse Effect").

                   (b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the

                                      -2-
<PAGE>

transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company. Each of the Transaction Documents has been duly executed by the Company
and, when delivered (or filed, as the case may be) in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. Neither the
Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, by-laws or other charter or
organizational documents.

                  (c) Capitalization. The number of authorized, issued and
outstanding capital stock of the Company is set forth in Schedule 2.1(c). Except
as disclosed in Schedule 2.1(c), the Company owns all of the capital stock of
each Subsidiary. No shares of Common Stock are entitled to preemptive or similar
rights, nor is any holder of securities of the Company or any Subsidiary
entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company or any Subsidiary by virtue of any of the
Transaction Documents. Except as a result of the purchase and sale of the
Debentures and the Warrants and except as disclosed in Schedule 2.1(c), there
are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person (as
defined below) any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings, or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock.

                   (d) Issuance of the Debentures and the Warrants. The
 Debentures and the Warrants are duly authorized and, when issued and paid for
 in accordance with the terms hereof, will be duly and validly issued, fully
 paid and nonassessable, free and clear of all liens, encumbrances and rights of
 first refusal of any kind (collectively, "Liens"). The Company has, on the date
 hereof and will, at all times while the Debentures and the Warrants are
 outstanding, maintain an adequate reserve of duly authorized shares of Common
 Stock, reserved for issuance to the holders of the Debentures and the Warrants,
 to enable it to perform its conversion, exercise and other obligations under
 this Agreement, the Debentures and the Warrants. Such number of reserved and
 available shares of Common Stock is not less than the sum of (i) 200% of the
 number of shares of Common Stock which would be issuable upon conversion in
 full of the Debentures, assuming such conversion occurred on the Original Issue
 Date, the Debentures remain outstanding for three years and all interest is
 paid in shares of Common Stock and (ii) the number of shares of Common Stock
 issuable upon exercise of the Warrants (such number of shares of Common Stock
 as contemplated in clauses (i)-(ii), the "Initial Minimum"). All such
 authorized shares of Common Stock shall be duly reserved for issuance to the
 holders of the Debentures and the Warrants. The shares of Common Stock issuable
 upon conversion of the Debentures and upon exercise of the Warrants are
 collectively referred to herein as the "Underlying Shares." The Debentures, the
 Warrants and the Underlying Shares are collectively referred to herein as, the
 "Securities." When issued in accordance with the Debentures and the Warrants,
 the Underlying Shares will be duly authorized, validly issued, fully paid and
 nonassessable, free and clear of all Liens.

                   (e) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's

                                      -3-
<PAGE>

or any Subsidiary's certificate or articles of incorporation, bylaws or other
charter documents (each as amended through the date hereof), or (ii) subject to
obtaining the Required Approvals (as defined below), conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), as
could not, individually or in the aggregate, have or result in a Material
Adverse Effect. The business of the Company is not being conducted in violation
of any law, ordinance or regulation of any governmental authority, except for
violations which, individually or in the aggregate, could not have or result in
a Material Adverse Effect.

                  (f) Filings, Consents and Approvals. Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filings required pursuant to Section
3.10, (ii) the filing with the Securities and Exchange Commission (the
"Commission") of a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale of the Underlying
Shares by the Purchasers (the "Underlying Shares Registration Statement"), (iii)
applicable Blue Sky filings, and (iv) in all other cases where the failure to
obtain such consent, waiver, authorization or order, or to give such notice or
make such filing or registration could not have or result in, individually or in
the aggregate, a Material Adverse Effect (collectively, the "Required
Approvals").

                  (g) Litigation; Proceedings. There is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an "Action") which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, individually or in
the aggregate, have or result in a Material Adverse Effect.

                   (h) No Default or Violation. Neither the Company nor any
Subsidiary (i) is in default under or in violation of (and no event has occurred
which has not been waived which, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgement or order of any court, arbitrator, or
governmental body, or (iii) is in violation of any statute, rule or regulation
of any governmental

                                       -4-
<PAGE>

authority, in each case of clauses (i), (ii) or (iii) above, except as could not
individually or in the aggregate, have or result in a Material Adverse Effect.

                  (i) Private Offering. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchasers as
contemplated hereby are exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Neither the Company
nor any Person acting on its behalf has taken or is, to the knowledge of the
Company, contemplating taking any action which could subject the offering,
issuance or sale of the Securities to the registration requirements of the
Securities Act including soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.

                   (j) SEC Documents; Financial Statements. The Company has
filed all reports required to be filed by it under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the "SEC Documents" and,
together with the Schedules to this Agreement the "Disclosure Materials") on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Documents prior to the expiration of any such extension
except for the reports set forth on Schedule 2.1(j). As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject have been filed as exhibits to
the SEC Documents. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
Since March 27, 2000, except as specifically disclosed in the SEC Documents, (a)
there has been no event, occurrence or development that has or that could result
in a Material Adverse Effect, (b) the Company has not incurred any liabilities
(contingent or otherwise) other than (x) liabilities incurred in the ordinary
course of business consistent with past practice and (y) liabilities not
required to be reflected in the Company's financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (c) the Company
has not altered its method of accounting or the identity of its auditors and (d)
the Company has not declared or made any payment or distribution of cash or
other property to its stockholders or officers or directors (other than in
compliance with existing Company stock option plans with respect to its capital
stock, or purchased, redeemed (or made any agreements to purchase or redeem) any
shares of its capital stock.

                                       -5-
<PAGE>

                   (k) Investment Company. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities Act) of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                  (1) Certain Fees. Except for certain fees payable to Merchant
Bancorp of America and Next Millennium Capital Holdings, LLC by the Company, no
fees or commissions will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person, with respect to the transactions contemplated by this Agreement. The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement. The Company shall indemnify and hold harmless the Purchasers,
their employees, officers, directors, agents, and partners, and their respective
Affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and attorney's fees) and expenses suffered in respect of
any such claimed or existing fees, as such fees and expenses are incurred.

                   (m) Solicitation Materials. Neither the Company nor any
Person acting on the Company's behalf has solicited any offer to buy or sell the
Securities by means of any form of general solicitation or advertising.

                   (n) Seniority. No indebtedness of the Company is senior to
the Debentures in right of payment, whether with respect to interest or upon
liquidation or dissolution, or otherwise.

                   (o) Listing and Maintenance Requirements. Except as set forth
in the SEC Documents, the Company has not, in the two years preceding the date
hereof received written notice from any stock exchange, market or trading
facility on which the Common Stock is or has been listed (or on which it has
been quoted) to the effect that the Company is not in compliance with the
listing or maintenance requirements of such exchange, market or trading
facility. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.

                   (p) Patents and Trademarks. The Company and its Subsidiaries
have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
rights which are necessary or material for use in connection with their
respective business as described in the SEC Documents and which the failure to
so have would have a Material Adverse Effect (collectively, the "Intellectual
Property Rights"). Neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or its
Subsidiaries violates or infringes upon the rights of any Person. To the best
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights.

                   (q) Registration Rights; Rights of Participation. Except as
set forth on Schedule 6(b) to the Registration Rights Agreement, the Company
has not granted or agreed to grant to any Person any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority which has not
been satisfied.

                                      -6-
<PAGE>

No Person, has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.

                   (r) Regulatory Permits. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Documents, except where the
failure to possess such permits could not, individually or in the aggregate,
have or result in a Material Adverse Effect ("Material Permits"), and neither
the Company nor any such Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

                   (s) Title. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them which is
material to the business of the Company and its Subsidiaries and good and
marketable title in all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its Subsidiaries. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and its Subsidiaries are
in compliance and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its Subsidiaries.

                   (t) Absence of Certain Proceedings. Except as described in
the SEC Documents, (i) neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving (A) a
claim of violation of or liability under federal or state securities laws or (B)
a claim of breach of fiduciary duty; (ii) the Company does not have pending
before the Commission any request for confidential treatment of information and
the Company has no knowledge of any expected such request that would be made
prior to the Effectiveness Date (as defined in the Registration Rights
Agreement); and (iii) there has not been, and to the best of the Company's
knowledge there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.

                   (u) Labor Relations. No material labor problem exists or, to
the knowledge of the Company, is imminent with respect to any of the employees
of the Company.

                   (v) Disclosure. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that constitutes or might constitute
material non-public information. The Company understands and confirms that the
Purchasers shall be relying on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

                                      -7-
<PAGE>

                  (w) Termination of Mobile Home Parks Operations. The Company
has terminated or will terminate simultaneously with the Closing, all its
operations and dispose of all assets relating to its mobile home parks business.
Notwithstanding the foregoing, the Company must provide the Purchasers with
evidence acceptable to them regarding the termination of operations and
disposition of the assets relating to the mobile home parks business prior to
payment of the purchase price by the Purchasers.

                  (x) No Liabilities Arising From Termination of Mobile Home
Parks Operations. The Company has no liabilities concerning the sale and
disposition of all assets relating to its mobile home parks business and has no
indemnification liabilities to the purchasers of such business.

                  (y) No Registration of Restricted Securities. The Company
agrees that it will not register for resale any of the restricted securities
listed on Schedule 2.1(y) until the later to occur of (a) 270 days after the
Effective Date and (b) the date on which the Company has fully discharged all of
its conversion and exercise obligations under the Debentures and the Warrants.

         2.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby for itself and for no other Purchaser, represents and warrants to the
Company as follows:

                   (a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. Each of this Agreement, the Letter Agreement, the Pledge Agreement
and the Registration Rights Agreement has been duly executed by such Purchaser,
and when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms.

                   (b) Investment Intent. Such Purchaser is acquiring the
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to such Purchaser's right, subject to the
provisions of this Agreement, the Registration Rights Agreement and the Warrant,
at all times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any person to
distribute the Securities.

                   (c) Purchaser Status. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is, and at each exercise date
under its respective Warrants, it will be, an "accredited investor" as defined
in Rule 501(a) under the Securities Act.

                   (d) Experience of such Purchaser. Such Purchaser, either
alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial

                                      -8-
<PAGE>

matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Securities, and has so evaluated the merits and
risks of such investment.

                   (e) Ability of such Purchaser to Bear Risk of Investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.

                   (f) Access to Information. Such Purchaser acknowledges that
it has reviewed the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or on
behalf of such Purchaser or its representatives or counsel shall modify, amend
or affect such Purchaser's right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.

                   (g) General Solicitation. Such Purchaser is not purchasing
the Securities as a result of or subsequent to any advertisement, article,
notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

                   (h) Reliance. Such Purchaser understands and acknowledges
that (i) the Securities are being offered and sold to it without registration
under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act and (ii) the availability of such
exemption, depends in part on, and the Company will rely upon the accuracy and
truthfulness of, the foregoing representations and such Purchaser hereby
consents to such reliance.

                   The Company acknowledges and agrees that no Purchaser makes
or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.2.

                                   ARTICLE III
                         OTHER AGREEMENTS OF THE PARTIES

          3.1 Transfer Restrictions. (a) Securities may only be disposed of
pursuant to an effective registration statement under the Securities Act, to the
Company or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities laws. In connection
with any transfer of Securities other than pursuant to an effective registration
statement or to the Company,

                                      -9-
<PAGE>

except as otherwise set forth herein, the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred securities under the Securities Act.
Notwithstanding the foregoing, the Company, without requiring a legal opinion as
described in the immediately preceding sentence, hereby consents to and agrees
to register on the books of the Company and with any transfer agent for the
securities of the Company any transfer of Securities by a Purchaser to an
Affiliate of such Purchaser or to one or more funds or managed accounts under
common management with such Purchaser, and any transfer among any such
Affiliates or one or more funds or managed accounts, provided that the
transferee certifies to the Company that it is an "accredited investor" as
defined in Rule 501 (a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes (subject to the qualifications
hereof). Any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights of a Purchaser under this Agreement and
the Registration Rights Agreement.

                   (b) The Purchasers agree to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Securities:

                   NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
          SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN REGISTERED WITH
          THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
          ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
          ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
          EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
          TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
          THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
          WITH APPLICABLE STATE SECURITIES LAWS.

                   Underlying Shares shall not contain the legend set forth
above nor any other legend if the conversion of Debentures or exercise of the
Warrants occurs at any time while an Underlying Shares Registration Statement is
effective under the Securities Act or, in the event there is not an effective
Underlying Shares Registration Statement, at such time, in the opinion of
counsel to the Company, such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company shall cause
its counsel to issue the legal opinion included in the Transfer Agent
Instructions to the Company's transfer agent on the day that the Underlying
Shares Registration Statement is declared effective by the Commission (the
"Effective Date"). The Company agrees that, in the event any Underlying Shares
are issued with a legend in accordance with this Section 3.1(b), it will, within
three Trading Days after request therefor by a Purchaser, provide such Purchaser
with a certificate or certificates representing such Underlying Shares, free
from such legend at such time as such legend would not have been required under
this Section 3.1(b) had such issuance occurred on the date of such request. The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company which enlarge the restrictions of transfer set
forth in this Section.

                                      -10-
<PAGE>

         3.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Underlying Shares upon (i) conversion of the Debentures and (ii)
exercise of the Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue Underlying Shares
upon (x) conversion of the Debentures and (y) exercise of the Warrants is
unconditional and absolute, subject to the limitations set forth in the
Debentures or in the Warrants, regardless of the effect of any such dilution.

         3.3 Furnishing of Information. As long as the Purchasers own
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as the Purchasers own Securities, if
the Company is not required to file reports pursuant to such sections, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act such information as is
required for the Purchasers to sell the Securities under Rule 144 promulgated
under the Securities Act. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell Underlying
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including causing its attorneys to render and deliver any legal opinion required
in order to permit a Purchaser to sell Underlying Shares under Rule 144 upon
notice of an intention to sell or other form of notice having a similar effect.
Upon the request of any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has complied
with such requirements.

          3.4 Integration. The Company shall not, and shall use its best efforts
to ensure that, no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers.

          3.5 Increase in Authorized Shares. If on any date the Company would
be, if a notice of conversion or exercise (as the case may be) were to be
delivered on such date, precluded from (a) issuing (a) 200% of the number of
Underlying Shares as would then be issuable upon a conversion in full of the
Debentures, and (b) the number of Underlying Shares issuable upon exercise in
full of the Warrants (the "Current Required Minimum"), in either case, due to
the unavailability of a sufficient number of authorized but unissued or reserved
shares of Common Stock, then the Board of Directors of the Company shall
promptly (and in any case, within 60 Business Days from such date) prepare and
mail to the stockholders of the Company proxy materials requesting authorization
to amend the Company's certificate of incorporation to increase the number of
shares of Common Stock which the Company is authorized to issue to at least such
number of shares as reasonably requested by the Purchasers in order to provide
for such number of authorized and unissued shares of Common Stock to enable the
Company to comply with its issuance, conversion, exercise and reservation of
shares obligations as set forth in this Agreement, the Debentures and the
Warrants (the sum of (x) the number of shares of Common Stock then outstanding
plus all shares of Common

                                      -11-
<PAGE>

Stock issuable upon exercise of all outstanding options, warrants and
convertible instruments, and (y) the Current Required Minimum, shall be a
reasonable number). In connection therewith, the Board of Directors shall (a)
adopt proper resolutions authorizing such increase, (b) recommend to and
otherwise use its best efforts to promptly and duly obtain stockholder approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later than the earlier to occur of the 60th day after delivery of the proxy
materials relating to such meeting and the 90th day after request by a holder of
Securities to issue the number of Underlying Shares in accordance with the terms
hereof) and (c) within five Business Days of obtaining such stockholder
authorization, file an appropriate amendment to the Company's certificate or
articles of incorporation to evidence such increase.

         3.6 Reservation and Listing of Underlying Shares. (a) The Company
shall (i) in the time and manner required by any national securities exchange,
market, trading or quotation facility on which the Common Stock is then traded,
prepare and file with such national securities exchange or market or trading or
quotation facility on which the Common Stock is then listed for trading an
additional shares listing application covering a number of shares of Common
Stock which is not less than the Initial Minimum, (ii) take all steps necessary
to cause such shares of Common Stock to be approved for listing on any such
national securities exchange or market or trading or quotation facility on which
the Common Stock is then listed as soon as possible thereafter, and (iii)
provide to the Purchasers evidence of such listing, and the Company shall
maintain the listing of its Common Stock thereon. If the number of Underlying
Shares issuable upon conversion in full of the then outstanding Debentures and
upon exercise of the then unexercised portion of the Warrants exceeds 85% of
the number of Underlying Shares previously listed on account thereof with any
such required exchanges, then the Company shall take the necessary actions to
list immediately a number of Underlying Shares as equals no less than the then
Current Required Minimum.

                   (b) The Company shall maintain a reserve of shares of Common
Stock for issuance upon conversion of the Debentures in full and upon exercise
in full of the Warrants in accordance with this Agreement, the Debentures and
the Warrants, respectively, in such amount as may be required to fulfill its
obligations in full under the Transaction Documents, which reserve shall equal
no less than the then Current Required Minimum.

          3.7 Conversion and Exercise Procedures. The Transfer Agent
Instructions, Conversion Notice (as defined in the Debentures) and Form of
Election to Purchase under the Warrants set forth the totality of the procedures
with respect to the conversion of the Debentures and exercise of the Warrants,
including the form of legal opinion, if necessary, that shall be rendered to the
Company's transfer agent and such other information and instructions as may be
reasonably necessary to enable the Purchasers to convert their Debentures and
exercise their Warrants.

          3.8 Conversion and Exercise Obligations of the Company. The Company
shall honor conversions of the Debentures and exercises of the Warrants and
shall deliver Underlying Shares in accordance with the respective terms,
conditions and time periods set forth in the Debentures and the Warrants.

          3.9 Subsequent Financing: Right of First Refusal Limitation on
Registration.

                                      -12-
<PAGE>

          (a) Without the prior written consent of the Purchasers, prior to the
181st day following the Effective Date (such date will be extended by the
number of days after the Effectiveness Date (as defined in the Registration
Rights Agreement) that an Underlying Shares Registration Statement has not been
declared effective by the Commission and by the number of days after the
Effective Date during which a Purchaser is not permitted or unable to utilize
the prospectus or otherwise to resell Underlying Shares under the Underlying
Shares Registration Statement) (the "Restricted Period"), the Company shall not
offer, sell, grant any option to purchase, or otherwise dispose of (or announce
any offer, sale, grant or any option to purchase or other disposition) any of
its securities (including the issuance of any debt or other instrument at any
time over the life thereof convertible into or exchangeable for Common Stock) or
any of its Affiliate's securities that may be exchangeable or convertible into
Common Stock, or otherwise enter into any other transaction intended to be
exempt or not subject to registration under the Securities Act (collectively, a
"Subsequent Placement"), unless none of the securities issued or granted (or
securities issuable upon conversion or exercise thereof) may be resold or
registered for issuance or resale under the Securities Act until the termination
of the Restricted Period. The restriction contained in the foregoing sentence
shall not apply to (i) issuances of Common Stock pursuant to a Strategic
Transaction (as defined below), (ii) issuances of shares of Common Stock as
payment of the purchase price for an acquisition of assets or stock of an
unaffiliated Person, (iii) issuances of shares of Common Stock at a price per
share that is fixed (and not subject to any adjustments or repricings and not in
any way accompanied by any other issuance of securities of the Company or an
Affiliate thereof) at a price that is greater than the Initial Conversion Price
(as defined in the Debentures), and (iv) the granting of options or warrants to
employees, officers and directors of the Company, and the issuance of Common
Stock upon exercise of such options or warrants granted under any stock option
plan heretofore or hereinafter duly adopted by the Company ("Option Plan
Issuances"). A "Strategic Transaction" shall mean a transaction or relationship
in which the Company issues shares of Common Stock to a Person which is, itself
or through its subsidiaries, an operating company in a business related to the
business of the Company and in which the Company receives material benefits in
addition to the investment of funds, but shall not include a transaction in
which the Company is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities.

          (b) Without the prior written consent of the Purchasers, prior to the
270th day following the Closing Date, the Company shall not, directly or
indirectly enter into a Subsequent Placement, unless: (A) the Company delivers
to each of the Purchasers a written notice (the "Subsequent Placement Notice")
of its intention to effect such Subsequent Placement, which Subsequent Placement
Notice shall describe in reasonable detail the proposed terms of such Subsequent
Placement, the amount of proceeds intended to be raised thereunder, the Person
with whom such Subsequent Placement shall be effected, and attached to which
shall be a term sheet or similar document relating thereto and (B) such
Purchaser shall not have notified the Company by 6:30 p.m. (New York City time)
on the tenth Trading Day after its receipt of the Subsequent Placement Notice of
its willingness to provide (or to cause its sole designee to provide), subject
to completion of mutually acceptable documentation, financing to the Company on
the same terms set forth in the Subsequent Placement Notice. If the Purchasers
shall fail to notify the Company of their intention to enter into such
negotiations within such time period, the Company may effect the Subsequent
Placement substantially upon the terms and to the Persons (or Affiliates of such
Persons) set forth in the Subsequent Placement Notice, provided, that the
Company shall provide the Purchasers with

                                      -13-
<PAGE>

a second Subsequent Placement Notice, and the Purchasers shall again have the
right of first refusal set forth above in this paragraph (b), if the Subsequent
Placement subject to the initial Subsequent Placement Notice shall not have been
consummated for any reason on the terms set forth in such Subsequent Placement
Notice within thirty Trading Days after the date of the initial Subsequent
Placement Notice with the Person (or an Affiliate of such Person) identified in
the Subsequent Placement Notice. If the Purchasers shall indicate a willingness
to provide financing in excess of the amount set forth in the Subsequent
Placement Notice, then each Purchaser shall be entitled to provide financing
pursuant to such Subsequent Placement Notice up to an amount equal to such
Purchaser's pro-rata portion of the aggregate number of Shares purchased by such
Purchaser under this Agreement, but the Company shall not be required to accept
financing from the Purchasers in an amount in excess of the amount set forth in
the Subsequent Placement Notice. The restrictions of this subsection shall not
apply to: (i) a Subsequent Placement in which the securities (and securities
issuable upon conversion or exercise thereof) shall be restricted from resale
and conversion and will not be registered for issuance or resale for at least
365 days following the issuance date thereof, (ii) issuances of shares of Common
Stock pursuant to a Strategic Transaction, (iii) issuances of shares of Common
Stock as payment of the purchase price for an acquisition of assets or stock of
an unaffiliated Person and (iv) Option Plan Issuances.

          (c) Except for (x) Underlying Shares, (y) other "Registrable
Securities" (as defined in the Registration Rights Agreement) to be registered,
and securities of the Company permitted pursuant to Section 6(c) of the
Registration Rights Agreement to be registered, in the Underlying Shares
Registration Statement in accordance with the Registration Rights Agreement and
(z) Common Stock permitted to be issued pursuant to paragraphs (a)(i) - (iv) of
Section 3.9, the Company shall not, for a period of not less than 90 Trading
Days after the Effective Date, without the prior written consent of the
Purchasers (i) issue or sell any of its or any of its Affiliates' equity or
equity equivalent securities pursuant to Regulation S promulgated under the
Securities Act, or (ii) register any securities of the Company. Any days after
the Effective Date that a Purchaser is unable to sell Underlying Shares under
the Underlying Shares Registration Statement shall be added to such 90 Trading
Day period.

          3.10 Certain Securities Laws Disclosures; Publicity. The Company
shall: (i) on the Closing Date, issue a press release in a form reasonably
acceptable to the Purchasers disclosing the transactions contemplated hereby,
(ii) file with the Commission a Report on Form 8-K disclosing the transactions
contemplated hereby within ten (10) Business Days after the Closing Date, and
(iii) timely file with the Commission a Form D promulgated under the Securities
Act as required under Regulation D promulgated under the Securities Act and
provide a copy thereof to the Purchasers promptly after the filing thereof. The
Company shall, no less than one Business Day prior to the filing of any
disclosure required by clauses (ii) and (iii) above, provide a copy thereof to
the Purchasers. Such filings will not be made without the consent of the
Purchasers, not to unreasonably withheld or delayed. The Company and the
Purchasers shall consult with each other in issuing any press releases or
otherwise making public statements or filings and other communications with the
Commission or any regulatory agency or stock market or trading facility with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement, filings or
other communications without the prior written consent of the other, which
consent shall not be unreasonably withheld or delayed, except that no prior
consent shall be required if such disclosure is required by law or stock market
regulations, in which

                                      -14-
<PAGE>

such case the disclosing party shall provide the other party with prior notice
of such public statement, filing or other communication.

         3.11 Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables in the ordinary course of the Company's business and prior practices),
to redeem any Company equity or equity-equivalent securities or to settle any
outstanding litigation.

         3.12 Reimbursement. If any Purchaser, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by or against any Person, including
stockholders of the Company, in connection with or as a result of the
consummation of the transactions contemplated by Transaction Documents, the
Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation and preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred. In addition, other than with respect to any matter in which a
Purchaser is a named party, the Company will pay such Purchaser the charges, as
reasonably determined by such Purchaser, for the time of any officers or
employees of such Purchaser devoted to appearing and preparing to appear as
witnesses, assisting in preparation for hearings, trials or pretrial matters, or
otherwise with respect to inquiries, hearings, trials, and other proceedings
relating to the subject matter of this Agreement. The reimbursement obligations
of the Company under this paragraph shall be in addition to any liability which
the Company may otherwise have, shall extend upon the same terms and conditions
to any Affiliates of the Purchasers who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchasers and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Purchasers and
any such Affiliate and any such Person. The Company also agrees that neither the
Purchasers nor any such Affiliates, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company in connection with or
as a result of the consummation of the Transaction Documents except to the
extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or willful misconduct of the applicable
Purchaser or entity in connection with the transactions contemplated by this
Agreement.

          3.13 Change of Name. As soon as practicable and in any event prior to
the 61st day following the Closing Date, the Company shall make all public
filings (including those filings required to be made with the Commission and any
trading facility or stock market on which the Common Stock is quoted or listed
for trading) in order to change the name of the Company to "Fetchomatic.com" or
other name mutually acceptable to the Company and the Purchasers. Such filing
shall be made by the 60th day following the Closing Date and the Company shall
use its best efforts to have such name change effective as soon as possible
thereafter. If before the second Business Day following such name change, the
Company shall cause new Securities to be issued to the Purchasers, identical to
the Securities issued previously in connection with the Transaction Documents
and the Company shall make such amendments to any Underlying Shares Registration
Statement to give effect to such name change.

                                      -15-
<PAGE>

                                   ARTICLE IV
                                  MISCELLANEOUS

                   4.1 Fees and Expenses. At the Closing the Company shall
reimburse the Purchasers for their legal fees and expenses incurred in
connection with the preparation and negotiation of the Transaction Documents by
paying to Robinson Silverman $30,000 for the preparation and negotiation of the
Transaction Documents. The amount contemplated by the immediately preceding
sentence shall be retained by the Purchasers and shall not be delivered to the
Company at the Closing. Other than the amount contemplated in the immediately
preceding sentence, and except as otherwise set forth in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities.

                   4.2 Entire Agreement; Amendments. The Transaction Documents,
together with the Exhibits and Schedules thereto contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

                   4.3 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 6:30 p.m. (New
York City time) on any date and earlier than 11:59 p.m. (New York City time) on
such date, (iii) the Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

          If to the Company:        Forest Glade International, Inc.
                                    444 Victoria Street, Suite 370
                                    Prince George, B.C., Canada V2L 2J7
                                    Facsimile No.: (250) 377-3569
                                    Attn: Chief Financial Officer

          With copies to:           Northern Business Consultants
                                    Unit 431
                                    230-1210 Summit Drive
                                    Kamloops, BC V2C 6M1
                                    Facsimile No.: (250) 377-3569
                                    Attn: Robert Munro

                                      -16-
<PAGE>

                                                and

                                    Camhy, Karlinsky & Stein LLP
                                    1740 Broadway, 16th Floor,
                                    New York, NY 10019
                                    Facsimile No.: (212) 977-8389
                                    Attn: Willie E. Dennis, Esq.

          If to a Purchaser:        To the address set forth under such
                                    Purchaser's name on the signature
                                    pages hereto.

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

                   4.4 Amendments; Waivers. No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.

                   4.5 Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

                   4.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Purchasers. Except as set
forth in Section 3.1(a), the Purchasers may not assign this Agreement or any of
the rights or obligations hereunder without the consent of the Company.

                   4.7 No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

                  4.8 Governing Law. The corporate laws of the State of Nevada
shall govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and

                                      -17-
<PAGE>

agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

                   4.9 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery, exercise
and conversion (as the case may be) of the Warrants and the Debentures.

                   4.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

                   4.11 Severability. In case any one or more of the provisions
of this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

                   4.12 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Purchasers will be entitled to specific performance of the obligations of
the Company under the Transaction Documents. The Company and each of the
Purchasers agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of its obligations described in the
foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

                   4.13 Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Purchaser under any Transaction Document is
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect to
such obligations or the transactions contemplated by the Transaction Document.
Each Purchaser shall be entitled to independently protect and enforce its
rights, including without limitation the

                                      -18-
<PAGE>

rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]

                                      -19-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Debenture Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.

                                    FOREST GLADE INTERNATIONAL, INC.

                                    By:
                                       -----------------------------------
                                      Name:
                                      Title:

                        [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                        SIGNATURE PAGE FOR PURCHASER FOLLOWS]

<PAGE>

                        COLLINSON ROAD LLC

                        By:
                           --------------------------------
                          Name:
                          Title:

                        Debentures Purchase Price: $3,500,000

                        Number of Shares underlying Closing Warrant: 521,765

                        Address for Notice:

                        Collinson Road LLC
                        c/o Citco Trustees (Cayman) Limited
                        Commercial Centre
                        P.O. Box 31106 SMB
                        Grand Cayman
                        Cayman Islands
                        British West Indies
                        Facsimile No.: (345) 945-7568

                        With copies to:
                        Robinson Silverman Pearce Aronsohn & Berman LLP
                        1290 Avenue of the Americas
                        New York, NY 10104
                        Facsimile No.: (212) 541-4630 and (212) 541-1432
                        Attn: Eric L. Cohen, Esq.

<PAGE>

                                 SCHEDULE 2.1(a)

1.        Forest Glade Properties Inc.

2.        SSA Coupon Limited (now known as Fetchomatic.com Online Inc. by
          Certificate of Change of Name filed March 1, 2000)

<PAGE>

                                 SCHEDULE 2.1(c)

 1.       The capitalization of the Company is as follows:

          Total outstanding plus issued under 1999 Stock
             Option Plan                                             41,900,000
          Less: unexercised options                                   1,144,000
                                                                     ----------
          Issued Stock                                               40,756,000
          Less: restricted stock                                     27,770,000
                                                                     ----------
          "Public" Stock                                             12,986,000

 2.       Under the provisions of the Company's 1999 Stock Option Plan, the
          maximum number of shares issuable shall not exceed 5 million. As of
          April 28, 2000, the Company granted 5,000,000 options at an exercise
          price of $1.09 per share. Further and as of April 28, 2000, 3,856,000
          options were exercised for total proceeds of $4,203,040.

 3.       The Company may be required to issue shares of the Company's common
          stock pursuant to the terms of a Media Agreement between the Company
          and Sivla Inc., dated March 30, 2000 (the "Media Agreement"),
          including but not limited to shares issuable as a result of the
          sponsorship agreement entered into on April 6, 2000 between the
          Company and Venture Capital Media Inc. in furtherance of the Media
          Agreement.

          Further, and pursuant to letter dated February 18, 2000, the Company
          is required to issue (i) 87,500 shares of common stock to Ira Terk,
          and (ii) 87,500 shares of common stock to Next Millenium Capital
          Holdings, LLC as additional compensation for providing services in
          connection with the transaction between the Company and the
          Purchasers.

<PAGE>

                                SCHEDULE 2.1(j)

1.        The Company's Form l 0K-SB for the year ending July 31, 1999 was
          required to be filed on or before October 29, 1999. On October 28,
          1999, the Company filed Form 12b-25 to provide notice of its intention
          to file a late annual report. The Company's Form l 0K-SB was filed on
          December 17, 1999.

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