Amresco Residential Securities Corp Mortgage Loan Tr 1997-2 – ‘8-K’ for 6/12/97 – EX-1.1

As of:  Friday, 6/27/97   ·   For:  6/12/97   ·   Accession #:  891092-97-244   ·   File #:  333-08687-03

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         6     17K 
 2: EX-1.1      Underwriting Agreement                                27    124K 
 3: EX-4.1      Pooling and Servicing Agreeement                     296   1.09M 

EX-1.1   —   Underwriting Agreement

EX-1.1
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                                                                     Exhibit 1.1

AMRESCO RESIDENTIAL SECURITIES CORPORATION

AND 

PRUDENTIAL SECURITIES INCORPORATED
As Representative of the several Underwriters 

UNDERWRITING AGREEMENT

FOR 

AMRESCO RESIDENTIAL SECURITIES CORPORATION MORTGAGE LOAN TRUST 1997-2 

MORTGAGE LOAN PASS THROUGH CERTIFICATES,

CLASS A-1 FIXED RATE CERTIFICATES 
CLASS A-2 FIXED RATE CERTIFICATES 
CLASS A-3 FIXED RATE CERTIFICATES 
CLASS A-4 FIXED RATE CERTIFICATES 
CLASS A-5 FIXED RATE CERTIFICATES 
CLASS A-6 FIXED RATE CERTIFICATES 
CLASS A-7 FIXED RATE CERTIFICATES 
CLASS A-8 FIXED RATE CERTIFICATES 
CLASS A-9 ADJUSTABLE RATE CERTIFICATES
CLASS M-1F FIXED RATE CERTIFICATES
 CLASS M-1A ADJUSTABLE RATE CERTIFICATES
CLASS M-2F FIXED RATE CERTIFICATES
 CLASS M-2A ADJUSTABLE RATE CERTIFICATES
CLASS B-1F FIXED RATE CERTIFICATES
 CLASS B-1A ADJUSTABLE RATE CERTIFICATES

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AMRESCO RESIDENTIAL SECURITIES CORPORATION MORTGAGE LOAN TRUST 1997-2 

MORTGAGE LOAN PASS THROUGH CERTIFICATES,

CLASS A-1 FIXED RATE CERTIFICATES 
CLASS A-2 FIXED RATE CERTIFICATES 
CLASS A-3 FIXED RATE CERTIFICATES 
CLASS A-4 FIXED RATE CERTIFICATES 
CLASS A-5 FIXED RATE CERTIFICATES 
CLASS A-6 FIXED RATE CERTIFICATES 
CLASS A-7 FIXED RATE CERTIFICATES 
CLASS A-8 FIXED RATE CERTIFICATES 
CLASS A-9 ADJUSTABLE RATE CERTIFICATES
CLASS M-1F FIXED RATE CERTIFICATES
 CLASS M-1A ADJUSTABLE RATE CERTIFICATES
CLASS M-2F FIXED RATE CERTIFICATES
 CLASS M-2A ADJUSTABLE RATE CERTIFICATES
CLASS B-1F FIXED RATE CERTIFICATES
 CLASS B-1A ADJUSTABLE RATE CERTIFICATES

UNDERWRITING AGREEMENT

                                                                    June 5, 1997

Prudential Securities Incorporated                                              
as Representative of the                                                      
several Underwriters                                                          
One New York Plaza, 15th Floor                                                  
New York, New York  10292-2015                                                  

Dear Ladies and Gentlemen:                                                      

     AMRESCO Residential  Securities  Corporation (the "Depositor"),  a Delaware
corporation,  has authorized the issuance and sale of Mortgage Loan Pass-Through
Certificates,  Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8 and Class A-9 (the "Class A Certificates"),  Class M-1F and
Class M-1A (the "Class M-1 Certificates"), Class M-2F and Class M-2A (the "Class
M-2  Certificates"  and,  collectively  with the  Class  M-1  Certificates,  the
"Mezzanine Certificates"),  Class B-1F and Class B-1A (the "Class B Certificates
and,   collectively   with  the   Mezzanine   Certificates,   the   "Subordinate
Certificates" and,  collectively with the Class A Certificates and the Mezzanine
Certificates,  the "Offered  Certificates")  and the Class S  Certificates,  the
Class  C and  the  Class  R  Certificates  (the  "Retained  Certificates,"  and,
collectively  with the Offered  Certificates,  the  "Certificates"),  evidencing
interests in a pool of fixed and  adjustable  rate mortgage loans (the "Mortgage
Loans").  The Mortgage Loans are secured  primarily by first and second deeds of
trust or mortgages on one- to four-family residential properties.               

     Only the Offered Certificates are being purchased by the Underwriters named
in Schedule A hereto, and the Underwriters are purchasing,  severally,  only the
Offered  Certificates  set forth opposite their names in Schedule A, except that
the amounts  purchased by the Underwriters may change in accordance with Section
X of this Agreement. Prudential Securities Incorporated is acting as            

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representative of the several Underwriters and in such capacity,  is hereinafter
referred to as the "Representative."                                            

     The  Certificates  will be issued under a pooling and  servicing  agreement
(the  "Pooling  and  Servicing  Agreement"),  dated as of June 1, 1997 among the
Depositor,  AMRESCO Residential Capital Markets, Inc., as Seller (the "Seller"),
Advanta   Mortgage   Corp.  USA   ("Advanta"),   Ameriquest   Mortgage   Company
("Ameriquest") and Option One Mortgage  Corporation  ("Option One") as Servicers
(the  "Servicers")  and The Bank of New York,  as trustee (the  "Trustee").  The
Certificates  will  evidence  fractional  undivided  interests in the trust (the
"Trust").  The assets of the Trust will initially include, among other things, a
pool of fixed and adjustable rate Mortgage Loans (the "Initial  Mortgage Loans")
and such amounts as may be held by the Trustee in the  Pre-Funding  Account (the
"Pre-Funding  Account"),  the  Capitalized  Interest  Account (the  "Capitalized
Interest Account") and any other accounts held by the Trustee for the Trust. The
Initial Mortgage Loans will be acquired,  in part, from the various  Originators
pursuant to the  various  "Transfer  Agreements"  as such term is defined in the
Pooling and Servicing Agreement.                                                

     On the Closing Date,  approximately  $145,800,000  will be deposited by the
Depositor in the name of the Trustee in the Pre-Funding Account from the sale of
the Certificates.  It is intended that additional  Mortgage Loans satisfying the
criteria  specified  in the Pooling and  Servicing  Agreement  (the  "Subsequent
Mortgage  Loans") will be purchased by the Trust for inclusion in the Trust from
the  Depositor  from time to time on or before  September  3, 1997 from funds on
deposit in the Pre-Funding Account at the time of execution and delivery of each
Subsequent Transfer Agreement  ("Subsequent Transfer  Agreement").  Funds in the
Capitalized  Interest Account will be applied by the Trustee to cover shortfalls
in interest during the Funding Period.  The Offered  Certificates will initially
represent  an undivided  ownership  interest in the sum of (i) a pool of Initial
Mortgage  Loans in an amount of  $594,159,422.09  as of the close of business on
June 1, 1997 (the "Cut-Off Date") and (ii) approximately $145,800,000 on deposit
in the Pre-Funding  Account.  A form of the Pooling and Servicing  Agreement has
been filed as an exhibit to the Registration Statement (hereinafter defined).   

     The Certificates are more fully described in a Registration Statement which
the Depositor has furnished to the Underwriters.  Capitalized terms used but not
defined  herein  shall  have  the  meanings  given  to them in the  Pooling  and
Servicing Agreement.                                                            

     SECTION I.  Representations and Warranties of the Depositor.  The Depositor
represents and warrants to, and agrees with the Underwriters that:              

     A. A  Registration  Statement  on Form  S-3  (No.  333-8687),  has (i) been
prepared by the Depositor in conformity with the  requirements of the Securities
Act of 1933 (the "Securities Act") and the rules and regulations (the "Rules and
Regulations")  of the United  States  Securities  and Exchange  Commission  (the
"Commission")  thereunder,  (ii)  been  filed  with  the  Commission  under  the
Securities Act and (iii) become  effective  under the Securities  Act. Copies of
such  Registration  Statement  have  been  delivered  by  the  Depositor  to the
Representative.  As used in this Agreement,  "Effective Time" means the date and
the  time  as  of  which  such  Registration   Statement,  or  the  most  recent
post-effective  amendment  thereto,  if  any,  was  declared  effective  by  the
Commission; "Effective Date" means the date of the Effective Time; "Registration
Statement" means such registration  statement,  at the Effective Time, including
any documents incorporated by reference therein at such time; "Basic Prospectus"
means such final  prospectus  dated July 28, 1996; and  "Prospectus  Supplement"
means the final prospectus supplement relating to the Offered  Certificates,  to
be filed with the  Commission  pursuant to  paragraphs  (2),  (3) or (5) of Rule
424(b) of the Rules and  Regulations.  "Prospectus"  means the Basic  Prospectus
together with the Prospectus Supplement. Reference made herein to the Prospectus
shall be deemed to refer to and                                                 

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include any documents  incorporated by reference  therein pursuant to Item 12 of
Form  S-3  under  the  Securities  Act as of the  date  of the  Prospectus,  any
reference to any amendment or supplement  to the  Prospectus  shall be deemed to
refer to and include any  document  filed under the  Securities  Exchange Act of
1934 (the "Exchange  Act") after the date of the Prospectus and  incorporated by
reference  in  the  Prospectus,  and  any  reference  to  any  amendment  to the
Registration  Statement  shall be deemed to include any report of the  Depositor
filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated  by reference in the  Registration
Statement.  The Commission has not issued any order preventing or suspending the
use of the  Prospectus.  There are no contracts  or  documents of the  Depositor
which  are  required  to be  filed as  exhibits  to the  Registration  Statement
pursuant to the Securities Act or the Rules and Regulations  which have not been
so filed or incorporated by reference  therein on or prior to the Effective Date
of the Registration Statement other than such documents or materials, if any, as
any Underwriter  delivers to the Depositor pursuant to Section VIII D hereof for
filing on Form 8-K.                                                             

     B. The Registration  Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration  Statement or the Prospectus will,
when they become effective or are filed with the Commission, as the case may be,
conform in all respects to the  requirements of the Securities Act and the Rules
and Regulations.  The Registration  Statement,  as of the Effective Date thereof
and of any amendment thereto,  did not contain an 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 not  misleading.  The Prospectus as of its date,
and as  amended or  supplemented  as of the  Closing  Date does not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary  in  order  to  make  the  statements  therein,  in the  light  of the
circumstances  under  which they were made,  not  misleading;  provided  that no
representation  or warranty is made as to  information  contained  in or omitted
from the  Registration  Statement  or the  Prospectus  in  reliance  upon and in
conformity with written information furnished to the Depositor in writing by the
Underwriters expressly for use therein.                                         

     C. The documents  incorporated  by reference in the  Prospectus,  when they
became  effective  or were  filed  with  the  Commission,  as the  case  may be,
conformed in all material  respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder,  and none of such  documents  contained  an  untrue  statement  of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary to make the  statements  therein not  misleading;  and any further
documents so filed and  incorporated by reference in the  Prospectus,  when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material  respects to the requirements of the Securities Act
or the  Exchange  Act,  as  applicable,  and the  rules and  regulations  of the
Commission  thereunder  and will not contain an 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 not misleading;  provided that no representation
is made as to documents deemed to be incorporated by reference in the Prospectus
as the result of filing a Form 8-K at the request of the Underwriters  except to
the extent such documents reflect information  furnished by the Depositor to the
Underwriters for the purpose of preparing such documents.                       

     D.  Since  the  respective  dates as of which  information  is given in the
Prospectus,  there has not been any material adverse change,  or any development
involving  a  prospective  material  adverse  change,  in the  general  affairs,
management,  financial  condition,  or results of operations  of the  Depositor,
otherwise than as set forth or contemplated in the Prospectus as supplemented or
amended as of the Closing Date.                                                 

     E. The Depositor has been duly  incorporated  and is validly  existing as a
corporation   in  good  standing   under  the  laws  of  its   jurisdiction   of
incorporation, is duly qualified to do business and is in good                  

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standing as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business  requires  such  qualification,
and has all power and  authority  necessary  to own or hold its  properties,  to
conduct  the  business  in which it is engaged and to enter into and perform its
obligations  under this  Agreement,  the Pooling and Servicing  Agreement or any
Subsequent Transfer Agreement and to cause the Certificates to be issued.       

     F. There are no actions, proceedings or investigations pending with respect
to which the Depositor has received  service of process  before or threatened by
any court,  administrative  agency or other tribunal to which the Depositor is a
party or of which any of its  properties  is the subject (a) which if determined
adversely to the Depositor would have a material  adverse effect on the business
or financial  condition of the  Depositor,  (b) asserting the invalidity of this
Agreement,  the  Pooling  and  Servicing  Agreement,  the  Certificates,  or any
Subsequent  Transfer  Agreement,  (c)  seeking to prevent  the  issuance  of the
Certificates  or the  consummation  by the Depositor of any of the  transactions
contemplated  by the Pooling and  Servicing  Agreement,  this  Agreement  or any
Subsequent Transfer Agreement,  as the case may be, (d) which might individually
or in the aggregate  materially  and  adversely  affect the  performance  by the
Depositor of its obligations  under, or the validity or  enforceability  of, the
Pooling and Servicing  Agreement,  and this Agreement,  the  Certificates or any
Subsequent  Transfer  Agreement or (e) which might adversely  affect the federal
income tax attributes of the Certificates as described in the Prospectus.       

     G. This  Agreement has been,  and the Pooling and  Servicing  Agreement and
each Subsequent  Transfer  Agreement when executed and delivered as contemplated
hereby and thereby will have been,  duly  authorized,  executed and delivered by
the  Depositor,  and this Agreement  constitutes,  and the Pooling and Servicing
Agreement when executed and delivered as contemplated  herein,  will constitute,
legal,  valid and  binding  instruments  enforceable  against the  Depositor  in
accordance with their  respective  terms,  subject as to  enforceability  to (x)
applicable bankruptcy,  reorganization,  insolvency, moratorium or other similar
laws affecting  creditors'  rights generally,  (y) general  principles of equity
(regardless  of whether  enforcement  is sought in a proceeding  in equity or at
law),  and (z) with  respect  to  rights  of  indemnity  under  this  Agreement,
limitations of public policy under applicable securities laws.                  

     H. The execution,  delivery and performance of this Agreement,  the Pooling
and Servicing  Agreement and any Subsequent  Transfer Agreement by the Depositor
and the  consummation  of the  transactions  contemplated  hereby  and  thereby,
compliance  with the  provisions  thereof,  and the issuance and delivery of the
Certificates  do not and  will  not  conflict  with or  result  in a  breach  or
violation of any of the terms or provisions  of, or constitute a default  under,
any indenture,  mortgage,  deed of trust,  loan agreement or other  agreement or
instrument to which the Depositor is a party, by which the Depositor is bound or
to  which  any of the  properties  or  assets  of  the  Depositor  or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business,  operations or financial condition of the Depositor, nor
will such actions  result in any violation of the  provisions of the articles of
incorporation  or by-laws of the Depositor (which breach or violation would have
a material adverse effect on the business,  operations or financial condition of
the Depositor),  or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Depositor or any of its
properties or assets. The Depositor 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,  rule  or  regulation  of  any  court,
governmental  agency  or body or other  tribunal  having  jurisdiction  over the
Depositor,  which materially and adversely  affects,  or is reasonably likely in
the future to materially and adversely affect,  (i) the ability of the Depositor
to perform its  obligations  under this  Agreement and the Pooling and Servicing
Agreement or (ii) the business,  operations,  results of  operations,  financial
position, income, properties or assets of the Depositor.                        

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     I. The Depositor has no reason to know that Deloitte & Touche,  LLP are not
independent  public accountants with respect to the Depositor as required by the
Securities Act and the Rules and Regulations.                                   

     J. The direction by the Depositor to the Trustee to execute,  authenticate,
issue and deliver the  Certificates  has been duly  authorized by the Depositor,
and  assuming  the Trustee  has been duly  authorized  to do so, when  executed,
authenticated,  issued  and  delivered  by the  Trustee in  accordance  with the
Pooling and Servicing  Agreement,  the  Certificates  will be validly issued and
outstanding  and will be  entitled to the  benefits  provided by the Pooling and
Servicing Agreement.                                                            

     K.  No   consent,   approval,   authorization,   order,   registration   or
qualification of or with any court or governmental  agency or body of the United
States is  required  for the  issuance of the  Certificates  and the sale of the
Offered  Certificates to the Underwriters,  or the consummation by the Depositor
of the other  transactions  contemplated  by this  Agreement,  the  Pooling  and
Servicing Agreement and any Subsequent Transfer Agreement, except such consents,
approvals,  authorizations,  registrations or  qualifications as may be required
under State  securities  or Blue Sky laws in  connection  with the  purchase and
distribution  of the Offered  Certificates  by the  Underwriters or as have been
obtained.                                                                       

     L. The Depositor possesses all material licenses, certificates, authorities
or permits  issued by the  appropriate  State,  Federal  or  foreign  regulatory
agencies or bodies  necessary to conduct the business now conducted by it and as
described in the Prospectus,  and there are no proceedings  pending with respect
to which the Depositor has received service of process or, to the best knowledge
of the Depositor  threatened,  relating to the revocation or modification of any
such license, certificate, authority or permit which if decided adversely to the
Depositor would, singly or in the aggregate, materially and adversely affect the
conduct of its business, operations or financial condition.                     

     M. At the time of  execution  and  delivery of the  Pooling  and  Servicing
Agreement,  the  Depositor  will:  (i) have  good  title to the  Mortgage  Loans
conveyed by the Seller, free and clear of any lien,  mortgage,  pledge,  charge,
encumbrance,  adverse claim or other security interest (collectively,  "Liens");
(ii) not have  assigned to any person any of its right or title in the  Mortgage
Loans,  in the Pooling and  Servicing  Agreement  or in the  Certificates  being
issued  pursuant  thereto;  and (iii) have the power and  authority  to sell its
interest  in  the  Mortgage  Loans  to  the  Trustee  and to  sell  the  Offered
Certificates to the Underwriters. Upon execution and delivery of the Pooling and
Servicing  Agreement by the Trustee,  the Trustee will have acquired  beneficial
ownership  of all of the  Depositor's  right,  title and  interest in and to the
Mortgage Loans.  Upon delivery to the Underwriters of the Offered  Certificates,
the Underwriters will have good title to the Offered  Certificates,  free of any
Liens.                                                                          

     N. As of the  Cut-Off  Date,  each of the  Mortgage  Loans  will  meet  the
eligibility  criteria  described  in the  Prospectus  and  will  conform  to the
descriptions thereof contained in the Prospectus.                               

     O. Neither the Depositor nor the Trust created by the Pooling and Servicing
Agreement is an "investment  company"  within the meaning of such term under the
Investment Company Act of 1940 (the "1940 Act") and the rules and regulations of
the Commission thereunder.                                                      

     P. At the Closing Date, the Offered  Certificates,  each Transfer Agreement
and the Pooling and Servicing Agreement will conform in all material respects to
the descriptions thereof contained in the Prospectus.                           

     Q. At the Closing Date, the Class A  Certificates  shall have been rated in
the highest rating  category by Moody's  Investors  Service,  Inc.  ("Moody's"),
Fitch Investors Service, L.P. ("Fitch") and                                     

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Duff & Phelps Credit Rating Co. ("DCR").  In addition,  the Class M-1, Class M-2
and Class B  Certificates  shall  receive  ratings  of "Aa2,"  "A3" and  "Baa3,"
respectively from Moody's and "AA," "A" and "BBB," respectively,  from Fitch and
DCR.                                                                            

     R. Any taxes,  fees and other  governmental  charges in connection with the
execution,  delivery and issuance of this  Agreement,  the Pooling and Servicing
Agreement and the Certificates have been paid or will be paid at or prior to the
Closing Date.                                                                   

     S. At the Closing Date, each of the  representations  and warranties of the
Depositor  set forth in the Pooling  and  Servicing  Agreement  will be true and
correct in all material respects.                                               

     T. The transfer of the Mortgage Loans to the Trust at the Closing Date and,
if  applicable,  on  each  Subsequent  Transfer  Date,  will be  treated  by the
Depositor for financial  accounting  and reporting  purposes as a sale of assets
and not as a pledge of assets to secure debt.                                   

     U. The Depositor is not aware of (i) any request by the  Commission for any
further  amendment of the  Registration  Statement or the  Prospectus or for any
additional information,  or (ii) any notification with respect to the suspension
of the  qualification  of the  Certificates  for sale in any jurisdiction or the
initiating or threatening of any proceeding for such purpose.                   

     V. The Pooling and  Servicing  Agreement  is not  required to be  qualified
under the Trust Indenture Act of 1939, as amended.                              

     Any certificate  signed by an officer of the Depositor and delivered to the
Representative or counsel for the  Representative in connection with an offering
of the  Offered  Certificates  shall be  deemed,  and shall  state that it is, a
representation  and warranty as to the matters covered thereby to each person to
whom the representations and warranties in this Section I are made.             

     SECTION II.  Purchase  and Sale.  The  commitment  of the  Underwriters  to
purchase the Offered Certificates  pursuant to this Agreement shall be deemed to
have  been  made on the  basis  of the  representations  and  warranties  herein
contained and shall be subject to the terms and conditions herein set forth. The
Depositor  agrees to instruct the Trustee to issue the Offered  Certificates and
agrees  to sell to the  Underwriters,  and the  Underwriters  agree  (except  as
provided in Sections X and XI hereof) severally and not jointly to purchase from
the Depositor the aggregate initial principal amounts or percentage interests of
the Offered  Certificates  set forth  opposite their names on Schedule A, at the
purchase price or prices set forth in Schedule A.                               

     SECTION III. Delivery and Payment.  Delivery of and payment for the Offered
Certificates to be purchased by the Underwriters shall be made at the offices of
Arter & Hadden in  Washington  D.C.,  or at such other  place as shall be agreed
upon by the Representative and the Depositor at 10:00 A.M. eastern daylight time
on June  12,  1997 or at such  other  time or date as shall  be  agreed  upon in
writing by the  Representative and the Depositor (such date being referred to as
the "Closing Date").  Payment shall be made to the Depositor by wire transfer of
same day funds payable to the account of the Depositor.  Delivery of the Offered
Certificates  shall  be  made to the  Representative  for  the  accounts  of the
Underwriters  against  payment of the purchase price thereof.  The  Certificates
shall be in such  authorized  denominations  and registered in such names as the
Underwriters  may  request in writing  at least two  business  days prior to the
Closing Date. The Offered Certificates will be made available for examination by
the  Representative  no later than 2:00 p.m.  eastern time on the first business
day prior to the Closing Date.                                                  

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     SECTION IV. Offering by the Underwriters. It is understood that, subject to
the terms and conditions hereof,  the Underwriters  propose to offer the Offered
Certificates for sale to the public as set forth in the Prospectus.             

 SECTION V. Covenants of the Depositor. The Depositor agrees as follows:

     A. To prepare the Prospectus in a form approved by the  Underwriters and to
file such Prospectus  pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business day following the
availability of the Prospectus to the Underwriters; to make no further amendment
or any supplement to the  Registration  Statement or to the Prospectus  prior to
the  Closing  Date  except as  permitted  herein;  to advise  the  Underwriters,
promptly after it receives notice thereof, of the time when any amendment to the
Registration  Statement has been filed or becomes effective prior to the Closing
Date or any  supplement  to the  Prospectus or any amended  Prospectus  has been
filed prior to the  Closing  Date and to furnish  the  Underwriters  with copies
thereof;  to file promptly all reports and any  definitive  proxy or information
statements required to be filed by the Depositor with the Commission pursuant to
Section 13(a),  13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the  Prospectus  and, for so long as the delivery of a prospectus is required in
connection  with the offering or sale of the Offered  Certificates;  to promptly
advise  the  Underwriters  of its  receipt  of  notice  of the  issuance  by the
Commission of any stop order or of: (i) any order  preventing or suspending  the
use of the Prospectus;  (ii) the suspension of the  qualification of the Offered
Certificates for offering or sale in any  jurisdiction;  (iii) the initiation of
or  threat of any  proceeding  for any such  purpose;  (iv) any  request  by the
Commission for the amending or supplementing  of the  Registration  Statement or
the  Prospectus or for additional  information.  In the event of the issuance of
any  stop  order  or of  any  order  preventing  or  suspending  the  use of the
Prospectus or suspending any such  qualification,  the Depositor  promptly shall
use its best efforts to obtain the withdrawal of such order by the Commission.  

     B.  To  furnish  promptly  to the  Underwriters  and  to  counsel  for  the
Underwriters  a signed copy of the  Registration  Statement as originally  filed
with the  Commission,  and of each amendment  thereto filed with the Commission,
including all consents and exhibits filed therewith.                            

     C. To deliver  promptly to the  Underwriters  such number of the  following
documents as the Underwriters shall reasonably request:  (i) conformed copies of
the  Registration  Statement as originally  filed with the  Commission  and each
amendment thereto (in each case including exhibits); (ii) the Prospectus and any
amended or  supplemented  Prospectus;  and (iii) any  document  incorporated  by
reference in the Prospectus  (including exhibits thereto).  If the delivery of a
prospectus is required at any time prior to the  expiration of nine months after
the  Effective  Time in  connection  with the  offering  or sale of the  Offered
Certificates,  and if at such time any events shall have occurred as a result of
which the  Prospectus as then amended or  supplemented  would include any untrue
statement  of a material  fact or omit to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made when such Prospectus is delivered,  not misleading,  or, if
for any other reason it shall be  necessary  during such same period to amend or
supplement  the  Prospectus  or to file  under  the  Exchange  Act any  document
incorporated  by  reference  in the  Prospectus  in  order  to  comply  with the
Securities Act or the Exchange Act, the Depositor shall notify the  Underwriters
and, upon any  Underwriter's  request,  shall file such document and prepare and
furnish  without charge to the  Underwriters  and to any dealer in securities as
many copies as the Underwriters  may from time to time reasonably  request of an
amended  Prospectus  or a  supplement  to the  Prospectus  which  corrects  such
statement or omission or effects such  compliance,  and in case the Underwriters
are  required to deliver a  Prospectus  in  connection  with sales of any of the
Offered  Certificates  at any time nine months or more after the Effective Time,
upon the request of an  Underwriter  but at its  expense,  the  Depositor  shall
prepare and deliver to such  Underwriter as many copies as such  Underwriter may
reasonably request of                                                           

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an amended or  supplemented  Prospectus  complying with Section  10(a)(3) of the
Securities Act. If such amendment or supplement to the Prospectus is required to
be contained in a post-effective  amendment to the Registration  Statement,  the
Depositor will use its best efforts to cause such amendment of the  Registration
Statement to be made effective as soon as possible.                             

     D. To file promptly with the Commission  any amendment to the  Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Depositor or the Underwriters, be required by the Securities Act
or requested by the Commission.                                                 

     E. To furnish the Underwriters and counsel for the  Underwriters,  prior to
filing with the Commission,  and to obtain the consent of the  Underwriters  for
the  filing  of  the  following  documents  relating  to the  Certificates:  (i)
amendment to the  Registration  Statement or  supplement to the  Prospectus,  or
document  incorporated  by  reference  in the  Prospectus,  or  (ii)  Prospectus
pursuant to Rule 424 of the Rules and Regulations.                              

     F. To make generally  available to holders of the Offered  Certificates  as
soon as practicable,  but in any event not later than 90 days after the close of
the period covered thereby, a statement of earnings of the Trust (which need not
be audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Depositor, Rule 158) and covering a
period of at least twelve  consecutive months beginning not later than the first
day of the first fiscal quarter following the Closing Date.                     

     G. To use its  best  efforts,  in  cooperation  with the  Underwriters,  to
qualify the Offered  Certificates  for  offering  and sale under the  applicable
securities laws of such states and other  jurisdictions  of the United States or
elsewhere  as the  Underwriters  may  designate,  and  maintain  or  cause to be
maintained such  qualifications in effect for as long as may be required for the
distribution of the Offered  Certificates.  The Depositor will file or cause the
filing of such  statements  and  reports as may be  required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.          

     H. So long as the Offered  Certificates  shall be outstanding the Depositor
shall cause the Trustee,  pursuant to the Pooling and  Servicing  Agreement,  to
deliver to the  Underwriters  as soon as such  statements  are  furnished to the
Trustee:  (i) the annual  statement  as to  compliance  delivered to the Trustee
pursuant to Section 8.16 of the Pooling and Servicing Agreement; (ii) the annual
statement of a firm of independent public  accountants  furnished to the Trustee
pursuant  to Section  8.17 of the  Pooling and  Servicing  Agreement;  (iii) the
monthly  servicing  report  furnished to the Trustee pursuant to Section 8.29 of
the Pooling and Servicing  Agreement;  (iv) the monthly reports furnished to the
Certificateholders  pursuant  to  Section  7.09  of the  Pooling  and  Servicing
Agreement; and (v) from time to time, any other information concerning the Trust
filed with any  government or regulatory  authority  that is otherwise  publicly
available, as the Representative may reasonably request.                        

     I. To apply the net proceeds from the sale of the Offered  Certificates  in
the manner set forth in the Prospectus.                                         

     J. During a period of seven  calendar days from the Closing  Date,  neither
the  Depositor  nor  any  trust  established,  directly  or  indirectly,  by the
Depositor  will,  without the  Representative's  prior  written  consent  (which
consent shall not be unreasonably withheld), offer or sell mortgage pass-through
certificates backed by mortgage loans, except pursuant to this Agreement.       

     K. The Depositor will enter into the applicable agreements,  to which it is
a party  pursuant  to the Pooling and  Servicing  Agreement,  on or prior to the
Closing Date.                                                                   

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     L. On each Subsequent  Transfer Date, the Depositor shall cause its special
counsel to deliver a favorable opinion  substantially to the effect set forth in
Section  VI.G  (except as it applies to  subdivisions  5 and 6 therein)  hereof,
appropriately  modified to refer to the applicable  Subsequent  Mortgage  Loans,
Subsequent Transfer  Agreement,  Subsequent Cut-Off Date and Subsequent Transfer
Date.                                                                           

     M. The  Depositor  will cause the  Computational  Materials  (as defined in
Section  VIII.D below) with respect to the  Certificates  which are delivered to
the  Depositor  as  provided  in  Section  VIII.D  below  to be  filed  with the
Commission on a Current Report on Form 8-K (the "Current Report") not later than
the date on which  such  materials  are  required  to be filed  pursuant  to the
Kidder/PSA Letters (as defined in Section VIII.D below).                        

     SECTION VI. Conditions to the Underwriters' Obligations. The obligations of
the Underwriters to purchase the Offered Certificates pursuant to this Agreement
are  subject  to:  (i)  the  accuracy  on  and  as of the  Closing  Date  of the
representations  and  warranties on the part of the Depositor  herein  contained
(including  those  representations  and  warranties set forth in the Pooling and
Servicing  Agreement  and  incorporated  herein);  (ii) the  performance  by the
Depositor  of  all of its  obligations  hereunder;  (iii)  the  accuracy  of the
statements of the Depositor made in any certificate or other document  delivered
pursuant to the provisions hereof;  and (iv) the following  conditions as of the
Closing Date:                                                                   

     A. The Underwriters  shall have received  confirmation of the effectiveness
of the Registration Statement. No stop order suspending the effectiveness of the
Registration  Statement  or any part  thereof  shall  have  been  issued  and no
proceeding  for that  purpose  shall have been  initiated or  threatened  by the
Commission.   Any  request  of  the   Commission  for  inclusion  of  additional
information  in the  Registration  Statement or the  Prospectus  shall have been
complied with. The Prospectus shall have been filed pursuant to Rule 424(b).    

     B.  The  Underwriters  shall  not  have  discovered  and  disclosed  to the
Depositor on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement  thereto  contains an untrue statement
of a fact or omits to state a fact which,  in the  opinion of Dewey  Ballantine,
counsel for the  Underwriters,  is material and is required to be stated therein
or is necessary to make the statements therein not misleading.                  

     C. All  corporate  proceedings  and other  legal  matters  relating  to the
authorization,  form and validity of this  Agreement,  the Pooling and Servicing
Agreement, the Certificates,  the Registration Statement and the Prospectus, and
all  other  legal  matters  relating  to this  Agreement  and  the  transactions
contemplated  hereby  shall be  satisfactory  in all respects to counsel for the
Underwriters,  and the  Depositor  shall  have  furnished  to such  counsel  all
documents and  information  that they may  reasonably  request to enable them to
pass upon such matters.  The Representative  shall have received the Pooling and
Servicing  Agreement  and  the  Offered   Certificates  in  form  and  substance
satisfactory to the  Representative,  duly executed by all signatories  required
pursuant to the respective terms thereof.                                       

     D. Arter & Hadden shall have  furnished to the  Underwriters  their written
opinion,  as counsel to the Depositor,  addressed to the  Underwriters and dated
the Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that:                                                                    

     1. The conditions to the use by the Depositor of a  registration  statement
on Form S-3 under the Securities  Act, as set forth in the General  Instructions
to Form S-3, have been satisfied with respect to the Registration  Statement and
the Prospectus.                                                                 

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     2. The  Registration  Statement  and any  amendments  thereto  have  become
effective under the 1933 Act; to the best of such counsel's  knowledge,  no stop
order suspending the effectiveness of the Registration Statement has been issued
and not withdrawn and no  proceedings  for that purpose have been  instituted or
threatened and not terminated;  and the Registration  Statement,  the Prospectus
and each amendment or supplement  thereto,  as of their respective  effective or
issue dates (other than the  financial  and  statistical  information  contained
therein, as to which such counsel need express no opinion),  complied as to form
in all material  respects with the applicable  requirements  of the 1933 Act and
the rules and  regulations  thereunder,  and such  counsel  does not know of any
amendment to the Registration Statement required to be filed.                   

     3. There are no material  contracts,  indentures  or other  documents  of a
character required to be described or referred to in the Registration  Statement
or the Prospectus or to be filed as exhibits to the Registration Statement other
than  those  described  or  referred  to  therein  or filed or  incorporated  by
reference as exhibits thereto.                                                  

     4. The  statements  set forth in the Basic  Prospectus  under the  captions
"Description  of The  Securities"  and in the  Prospectus  Supplement  under the
captions  "Description  of  The  Offered  Certificates"  and  "The  Pooling  and
Servicing Agreement," to the extent such statements purport to summarize certain
provisions of the  Certificates or of the Pooling and Servicing  Agreement,  are
fair and accurate in all material respects.                                     

     5. The  statements  set forth in the Basic  Prospectus  and the  Prospectus
Supplement  under the captions "ERISA  Considerations,"  "Certain Federal Income
Tax Consequences," "Legal Investment Matters" and, "Certain Legal Aspects of the
Mortgage  Assets" to the extent  that they  constitute  matters of federal  law,
provide a fair and accurate summary of such law or conclusions.                 

     6. The Pooling and Servicing  Agreement and the Transfer Agreements conform
in all material respects to the description  thereof contained in the Prospectus
and the Pooling and  Servicing  Agreement is not required to be qualified  under
the Trust Indenture Act of 1939, as amended, and the Trust is not required to be
registered under the Investment Company Act of 1940, as amended.                

     7. Neither the Depositor nor the Trust is an "investment  company" or under
the "control" of an  "investment  company" as such terms are defined in the 1940
Act.                                                                            

     8. Assuming that the Trustee causes certain assets of the REMIC Estate,  as
the Trustee has covenanted to do in the Pooling and Servicing  Agreement,  to be
treated as a "real estate mortgage investment  conduit" ("REMIC"),  as such term
is defined in the Internal  Revenue Code of 1986, as amended (the  "Code"),  and
the  parties  to the  Pooling  and  Servicing  Agreement  comply  with the terms
thereof, such assets of the REMIC Estate will be treated as a REMIC, the Offered
Certificates,  the Class S  Certificates  and the Class C  Certificates  will be
treated as the  "regular  interests"  in the REMIC and the Class R  Certificates
will be treated as the sole "residual interest" in the REMIC.  Neither the Trust
nor certain  assets and accounts are subject to tax upon its income or assets by
any taxing authority of the State of New York or the City of New York.          

     9. Assuming that the Class A-9 Certificates and the Class M-1A Certificates
are rated at the time of issuance in one of the two highest rating categories by
a nationally  recognized  statistical rating organization,  such Certificates at
such time will be a  "mortgage  related  security"  as such term is  defined  in
Section 3(a)(41) of the Securities Exchange Act of 1934, as amended.            

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     10.  To the  best  of  such  counsel's  knowledge,  there  are no  actions,
proceedings or investigations  pending that would adversely affect the status of
the REMIC Estate as a REMIC.                                                    

     11. As a consequence of the  qualification  of the REMIC Estate as a REMIC,
the Offered  Certificates  will be treated as "qualifying  real property  loans"
under Section  593(d) of the Code,  "regular . . . interest(s) in a REMIC" under
Section 7701(a)(19)(C) of the Code and "real estate assets" under Section 856(c)
of the Code in the same  proportion  that the  assets  in the Trust  consist  of
qualifying  assets under such  Sections.  In addition,  as a consequence  of the
qualification   of  the  REMIC  Estate  as  a  REMIC  interest  on  the  Offered
Certificates will be treated as "interest on obligations secured by mortgages on
real property"  under Section 856(c) of the Code to the extent that such Offered
Certificates  are treated as "real estate  assets" under  Section  856(c) of the
Code.                                                                           

     12. The Certificates will, when issued,  conform to the description thereof
contained in the Prospectus.                                                    

Such counsel shall also have furnished to the Underwriters a written  statement,
addressed to the  Underwriters and dated the Closing Date, in form and substance
satisfactory  to the  Underwriters  to the effect that no facts have come to the
attention of such counsel which lead them to believe that: (a) the  Registration
Statement,  at the time such Registration Statement became effective,  contained
an untrue  statement  of a material  fact or  omitted  to state a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading  (except  as to  financial  or  statistical  data  contained  in  the
Registration  Statement);  (b)  the  Prospectus,  as of its  date  and as of the
Closing  Date,  contained or contains an untrue  statement of a material fact or
omitted  or omits to state a  material  fact  required  to be stated  therein or
necessary  in  order  to  make  the  statements  therein,  in the  light  of the
circumstances  under which they were made, not  misleading;  or (c) any document
incorporated  by  reference  in the  Prospectus  or  any  further  amendment  or
supplement to any such incorporated  document made by the Depositor prior to the
Closing Date (other than any document  filed at the request of an Underwriter to
the extent such document relates to Computational  Materials)  contained,  as of
the time it became  effective or was filed with the Commission,  as the case may
be, an 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 the light of the  circumstances  under  which they were  made,  not
misleading.                                                                     

     E. The Underwriters  shall have received the favorable  opinion,  dated the
Closing Date, of Arter & Hadden, special counsel to the Depositor,  addressed to
the Depositor and satisfactory to Moody's, Fitch, DCR and the Underwriters, with
respect to certain matters relating to the transfer of the Mortgage Loans to the
Depositor  and from the  Depositor  to the Trust,  and such  counsel  shall have
consented  to  reliance  on  such  opinion  by  Moody's,   Fitch,  DCR  and  the
Underwriters as though such opinion had been addressed to each such party.      

     F. Dewey Ballantine,  counsel for Advanta, Morrison & Foerster, counsel for
Option One and Thacher Proffit and Wood, counsel for Long Beach, each shall have
furnished to the Underwriters  their written opinion,  as counsel to the related
Servicer,  addressed to the Underwriters and the Depositor and dated the Closing
Date,  in form and substance  satisfactory  to the  Underwriters,  to the effect
that:                                                                           

     1. Each  Servicer  is validly  existing in good  standing as a  corporation
under the laws of its State of incorporation.                                   

     2. Each  Servicer has full  corporate  power and  authority to serve in the
capacity of  servicers  of the related  Mortgage  Loans as  contemplated  in the
Pooling and Servicing Agreement.                                                

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     3. The Pooling and Servicing  Agreement has been duly authorized,  executed
and delivered by each Servicer,  and, assuming the due authorization,  execution
and delivery of such  agreements by the other parties  thereto,  constitute  the
legal, valid and binding agreements of each Servicer,  enforceable  against them
in accordance with their terms,  subject as to enforceability to (x) bankruptcy,
insolvency,  reorganization,  moratorium, receivership or other similar laws now
or hereafter  in effect  relating to  creditors'  rights  generally  and (y) the
qualification  that the remedy of specific  performance and injunctive and other
forms of  equitable  relief  may be  subject to  equitable  defenses  and to the
discretion,  with  respect  to such  remedies,  of the  court  before  which any
proceedings with respect thereto may be brought.                                

     4.  No   consent,   approval,   authorization,   order,   registration   or
qualification  of or with  any  court  or  governmental  agency  or body  having
jurisdiction  over each Servicer is required for the  consummation  by either of
them of the  transactions  contemplated by the Pooling and Servicing  Agreement,
except   such   consents,   approvals,    authorizations,    registrations   and
qualifications as have been obtained.                                           

     5. The  execution,  delivery or performance by each Servicer of the Pooling
and Servicing  Agreement and the  transactions  contemplated  thereby do not (A)
conflict with or result in a breach of, or constitute a default  under,  (i) any
term or  provision  of the  certificate  of  incorporation  or  by-laws  of such
Servicer;  (ii) any term or provision of any material agreement,  deed of trust,
mortgage loan agreement,  contract,  instrument or indenture, or other agreement
to which such Servicer is a party or is bound or to which any of the property or
assets of such Servicer or any of its subsidiaries is subject; (iii) to the best
of such firm's knowledge without independent  investigation any order, judgment,
writ,  injunction  or  decree  of any  court or  governmental  authority  having
jurisdiction over such Servicer; or (iv) any law, rule or regulations applicable
to  such  Servicer;  or  (B)  to the  best  of  such  firm's  knowledge  without
independent  investigation,  results in the creation or  imposition of any lien,
charge or encumbrance upon the Trust Estate or upon the Certificates.           

     6. There are, to the best of such counsel's  knowledge without  independent
investigation,  no actions,  proceedings or investigations pending or threatened
against a Servicer before any court, administrative agency or other tribunal (a)
asserting  the  validity  of  the  Pooling  and   Servicing   Agreement  or  the
Certificates, (b) seeking to prevent the consummation of any of the transactions
contemplated  by  the  Pooling  and  Servicing  Agreement  or  (c)  which  would
materially  and  adversely  affect  the  performance  by  the  Servicers  of its
obligations  under,  or the  validity  or  enforceability  of, the  Pooling  and
Servicing Agreement.                                                            

     G. Counsel for the Depositor and the Seller (which may be in-house counsel)
shall  have  furnished  to the  Underwriters  such  counsel's  written  opinion,
addressed to the  Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:                           

     1. The  Depositor  has been duly  organized  and is validly  existing  as a
corporation in good standing under the laws of the State of Delaware and is duly
qualified to do business  and is in good  standing as a foreign  corporation  in
each  jurisdiction in which its ownership or lease of property or the conduct of
its business  requires such  qualification  (except where any such failure would
not have a material  adverse  effect on the  Depositor's  ability to perform its
obligations under this Agreement or the Pooling and Servicing Agreement, and has
all power and authority  necessary to own or hold its  properties and to conduct
the  business  in  which  it is  engaged  and to  enter  into  and  perform  its
obligations under this Agreement and the Pooling and Servicing Agreement, and to
cause the Certificates to be issued.                                            

     2. The  Depositor is not in violation of its articles of  incorporation  or
by-laws  or in  default  in  the  performance  or  observance  of  any  material
obligation, agreement, covenant or condition contained                          

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in any contract,  indenture,  mortgage,  loan  agreement,  note,  lease or other
instrument  to which the  Depositor is a party or by which it or its  properties
may be bound,  which default might result in any material  adverse change in the
financial  condition of the  Depositor or which might  materially  and adversely
affect the properties or assets, taken as a whole, the Depositor.               

     3. This  Agreement and the Pooling and Servicing  Agreement  have been duly
authorized,  executed and delivered by the Depositor and the Subsequent Transfer
Agreements  have been duly  authorized,  and when duly executed and delivered by
the Depositor  and,  assuming the due  authorization,  execution and delivery of
such agreements by the other parties thereto,  such agreements constitute and in
the case of any Subsequent  Transfer Agreement will constitute valid and binding
obligations,   enforceable  against  the  Depositor  in  accordance  with  their
respective terms,  subject as to  enforceability to (x) bankruptcy,  insolvency,
reorganization,  moratorium  or other  similar  laws now or  hereafter in effect
relating  to  creditors'  rights  generally,  (y) general  principles  of equity
(regardless  of whether  enforcement  is sought in a proceeding  in equity or at
law)  and (z)  with  respect  to  rights  of  indemnity  under  this  Agreement,
limitations of public policy under applicable securities laws.                  

     4. The execution,  delivery and performance of this Agreement,  the Pooling
and Servicing Agreement and each Subsequent Transfer Agreement by the Depositor,
the consummation of the transactions  contemplated  hereby and thereby,  and the
issuance and delivery of the  Certificates (i) do not and will not conflict with
or result  in a breach or  violation  of any of the terms or  provisions  of, or
constitute  a default  under,  any  indenture,  mortgage,  deed of  trust,  loan
agreement or other  agreement or instrument to which the Depositor is a party or
by which the Depositor is bound or to which any of the property or assets of the
Depositor or any of its subsidiaries is subject, which breach or violation would
have  a  material  adverse  effect  on the  business,  operations  or  financial
condition of the Depositor,  (ii) nor will such actions result in a violation of
the  provisions of the articles of  incorporation  or by-laws of the  Depositor,
which breach or violation would have a material  adverse effect on the business,
operations or financial condition of the Depositor (or any statute or any order,
rule  or  regulation  of  any  court  or  governmental  agency  or  body  having
jurisdiction  over the  Depositor or any of its  properties or assets) and (iii)
nor will such actions  result in the creation or imposition of any lien,  charge
or  encumbrance  upon the  Trust  Estate  or upon the  Certificates,  except  as
otherwise contemplated by the Pooling and Servicing Agreement.                  

     5. The  direction  by the  Depositor  to the  Trustee  to  execute,  issue,
authenticate  and  deliver  the  Certificates  has been duly  authorized  by the
Depositor and, assuming that the Trustee has been duly authorized to do so, when
executed,  authenticated  and  delivered by the Trustee in  accordance  with the
Pooling and Servicing  Agreement,  the  Certificates  will be validly issued and
outstanding  and will be entitled to the  benefits of the Pooling and  Servicing
Agreement.                                                                      

     6.  No   consent,   approval,   authorization,   order,   registration   or
qualification of or with any court or governmental  agency or body of the United
States is required  for the  issuance of the  Certificates,  and the sale of the
Offered  Certificates to the Underwriters,  or the consummation by the Depositor
of the other  transactions  contemplated  by this  Agreement and the Pooling and
Servicing   Agreement,   except  such   consents,   approvals,   authorizations,
registrations or  qualifications  as may be required under the 1933 Act or State
securities or Blue Sky laws in connection with the purchase and  distribution of
the  Offered  Certificates  by  the  Underwriters  or as  have  been  previously
obtained.                                                                       

     7. There are no actions, proceedings or investigations pending with respect
to which the Depositor has received service of process before or, to the best of
such counsel's knowledge, without independent investigation, to the best of such
counsel's knowledge without independent investigation,  threatened by any court,
administrative agency or other tribunal to which the Depositor is a party or of 

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which any of its properties is the subject: (a) which if determined adversely to
the Depositor would have a material  adverse effect on the business,  results of
operations or financial condition of the Depositor; (b) asserting the invalidity
of the Pooling  and  Servicing  Agreement  or the  Certificates;  (c) seeking to
prevent the issuance of the Certificates or the consummation by the Depositor of
any of the transactions  contemplated by the Pooling and Servicing  Agreement or
this Agreement,  as the case may be; or (d) which might materially and adversely
affect  the  performance  by the  Depositor  of its  obligations  under,  or the
validity  or  enforceability  of, the  Pooling  and  Servicing  Agreement,  this
Agreement or the Certificates.                                                  

     8. The Certificates have been duly and validly authorized and issued,  and,
immediately  prior to the sale of the Offered  Certificates to the Underwriters,
such Certificates are owned by the Depositor, free and clear of all Liens.      

     9. AMRESCO Residential  Capital Markets,  Inc. (the "Seller") has been duly
organized and is validly  existing as a corporation  in good standing  under the
laws of the State of Delaware  and is duly  qualified  to do business  and is in
good  standing  as a  foreign  corporation  in each  jurisdiction  in which  its
ownership  or lease of  property or the conduct of its  business  requires  such
qualification,  and has all power  and  authority  necessary  to own or hold its
properties  and to conduct the business in which it is engaged and to enter into
and perform its obligations under the Transfer Agreements.                      

     10. The Seller is not in  violation  of its  articles of  incorporation  or
by-laws  or in  default  in  the  performance  or  observance  of  any  material
obligation,   agreement,  covenant  or  condition  contained  in  any  contract,
indenture,  mortgage,  loan agreement,  note, lease or other instrument to which
the  Seller  is a party or by which it or its  properties  may be  bound,  which
default might result in any material adverse changes in the financial condition,
earnings,  affairs or  business  of the  Seller or which  might  materially  and
adversely affect the properties or assets, taken as a whole, of the Seller.     

     11.  The  Transfer  Agreements  have been  duly  authorized,  executed  and
delivered  by the Seller and,  assuming  the due  authorization,  execution  and
delivery of such agreements by the parties  thereto other than the Seller,  such
agreements will constitute valid and binding  obligations,  enforceable  against
the  Seller  in  accordance  with  their   respective   terms,   subject  as  to
enforceability  to (x)  bankruptcy,  insolvency,  reorganization,  moratorium or
other  similar  laws now or hereafter in effect  relating to  creditors'  rights
generally (y) general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).                                    

     12. The execution,  delivery and performance of the Transfer  Agreements by
the Seller and the consummation of the transactions  contemplated thereby do not
and will not  conflict  with or result in a breach  or  violation  of any of the
terms or provisions of, or constitute a default under, any indenture,  mortgage,
deed of trust,  loan  agreement or other  agreement or  instrument  to which the
Seller  is a party  or by which  the  Seller  is  bound  or to which  any of the
property or assets of the Seller or any of its  subsidiaries  is subject,  which
breach or  violation  would  have a  material  adverse  effect on the  business,
operations or financial condition of the Seller, nor will such actions result in
a violation of the provisions of the articles of incorporation or by-laws of the
Seller  or any  statute  or any  order,  rule  or  regulation  of any  court  or
governmental  agency or body having  jurisdiction  over the Seller or any of its
properties or assets,  which breach or violation  would have a material  adverse
effect on the business, operations or financial condition of the Seller.        

     13. The  assignment of rights under each of the Transfer  Agreements by the
Seller to the Depositor and by the Depositor to the Trust is effective to permit
the Trustee to exercise the Seller's rights thereunder.                         

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     H. The  Underwriters  shall have received the  favorable  opinion of Emmet,
Marvin & Martin,  counsel to the Trustee,  dated the Closing Date,  addressed to
the  Underwriters  and  in  form  and  scope  satisfactory  to  counsel  to  the
Underwriters, to the effect that:                                               

     1. The  Trustee is a banking  corporation  duly  incorporated  and  validly
existing under the laws of the State of New York.                               

     2. The Trustee has the full corporate  trust power to execute,  deliver and
perform its obligations under the Pooling and Servicing Agreement.              

     3. The  execution  and delivery by the Trustee of the Pooling and Servicing
Agreement  and the  performance  by the  Trustee  of its  obligations  under the
Pooling and  Servicing  Agreement  have been duly  authorized  by all  necessary
corporate action of the Trustee.                                                

     4. The  Pooling and  Servicing  Agreement  is a valid and  legally  binding
obligation of the Trustee enforceable against the Trustee.                      

     5. The  execution  and delivery by the Trustee of the Pooling and Servicing
Agreement  does not (a) violate the  organization  certificate of the Trustee or
the  By-laws  of the  Trustee,  (b) to such  counsel's  knowledge,  violate  any
judgment,  decree or order of any New York or  United  States  federal  court or
other New York or United  States  federal  governmental  authority  by which the
Trustee is bound or (c) assuming the  non-existence  of any judgment,  decree or
order of any court or other  governmental  authority  that would be  violated by
such  execution  and  delivery,  violate any New York or United  States  federal
statute, rule or regulation or require any consent, approval or authorization of
any New York or United  States  federal court or other New York or United States
federal governmental authority.                                                 

     6. The Certificates have been duly authenticated, executed and delivered by
the Trustee.                                                                    

     7. If the  Trustee  were acting in the stead of either  Servicer  under the
Pooling and  Servicing  Agreement  as of the date of such  opinion,  the Trustee
would have the full corporate  trust power to perform the  obligations of either
Servicer under the Pooling and Servicing Agreement.                             

     8.  To the  best  of  such  counsel's  knowledge,  there  are  no  actions,
proceedings  or  investigations  pending or threatened  against or affecting the
Trustee  before  or by any  court,  arbitrator,  administrative  agency or other
governmental  authority  which,  if  decided  adversely  to the  Trustee,  would
materially  and  adversely  affect the  ability of the  Trustee to carry out the
transactions contemplated in the Pooling and Servicing Agreement.               

     I. The Underwriters  shall have received the favorable opinion or opinions,
dated the date of the  Closing  Date,  of  counsel  for the  Underwriters,  with
respect to the issue and sale of the Offered Certificates,  this Agreement,  the
Prospectus  and such other related  matters as the  Underwriters  may reasonably
require.                                                                        

J. RESERVED.                                                          

     K. The Depositor  shall have  furnished to the  Underwriters a certificate,
dated the Closing Date and signed by the Chairman of the Board, the President or
a Vice  President  of the  Depositor  to the  extent  that  the  signer  of such
certificate has carefully  examined the  Registration  Statement  (excluding any
documents  incorporated  therein  by  reference),   the  Pooling  and  Servicing
Agreement and this Agreement and that, to the best of his or her knowledge based
upon reasonable investigation:                                                  

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     1. The  representations  and warranties of the Depositor in this Agreement,
the Pooling and  Servicing  Agreement  and all related  agreements  are true and
correct  as of the  Closing  Date;  and the  Depositor  has  complied  with  all
agreements  and satisfied all the  conditions on its part which are to have been
complied with on or prior to the Closing Date.                                  

     2.  There has been no  amendment  or other  document  filed  affecting  the
certificate of  incorporation  or bylaws of the Depositor since November 9, 1995
and no such amendment has been  authorized.  No event has occurred since June 9,
1997 which has affected the good standing of the Depositor under the laws of the
State of Delaware.                                                              

     3. There has not occurred any material  adverse change,  or any development
involving a prospective material adverse change, in the condition,  financial or
otherwise,  or in the earnings,  business or  operations  of the Depositor  from
March 31, 1997.                                                                 

     4. There are no actions, suits or proceedings pending with respect to which
it has received service of process or, to the best of such officer's  knowledge,
threatened  against or affecting  the Depositor  which if adversely  determined,
individually or in the aggregate, would be reasonably likely to adversely affect
the Depositor's  obligations  under the Pooling and Servicing  Agreement or this
Agreement  in any  material  way;  and no merger,  liquidation,  dissolution  or
bankruptcy of the Depositor is pending or contemplated.                         

     L. The Trustee shall have  furnished to the  Underwriters  a certificate of
the  Trustee,  signed by one or more duly  authorized  officers of the  Trustee,
dated the Closing Date, as to the due  authorization,  execution and delivery of
the Pooling and  Servicing  Agreement by the Trustee and the  acceptance  by the
Trustee of the trusts created thereby and the due execution,  authentication and
delivery of the Certificates by the Trustee thereunder and such other matters as
the Representative shall reasonably request.                                    

M. RESERVED.                                                          

     N. The Class A  Certificates  shall  have been rated  "Aaa" by Moody's  and
"AAA" by Fitch and DCR. The Class M-1, Class M-2 and Class B Certificates  shall
have been rated  "Aa2," "A3" and "Baa3,"  respectively,  by 's and "AA," "A" and
"BBB," respectively, by Fitch and DCR.                                          

     O. The  Depositor  shall have  furnished to the  Underwriters  such further
information,  certificates and documents as the Underwriters may reasonably have
requested not less than three full business days prior to the Closing Date.     

     P. Prior to the Closing Date,  counsel for the Underwriters shall have been
furnished with such  documents and opinions as they may  reasonably  require for
the  purpose  of  enabling  them to  pass  upon  the  issuance  and  sale of the
Certificates  as herein  contemplated  and  related  proceedings  or in order to
evidence  the  accuracy  and  completeness  of any of  the  representations  and
warranties,  or the fulfillment of any of the conditions,  herein contained, and
all proceedings  taken by the Depositor in connection with the issuance and sale
of the  Certificates  as herein  contemplated  shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.                 

     Q.  Subsequent to the execution and delivery of this  Agreement none of the
following  shall have occurred:  (i) trading in securities  generally on the New
York Stock Exchange,  the American Stock Exchange or the over-the counter market
shall have been  suspended  or minimum  prices  shall have been  established  on
either of such exchanges or such market by the  Commission,  by such exchange or
by any                                                                          

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other  regulatory body or governmental  authority  having  jurisdiction;  (ii) a
banking  moratorium  shall have been  declared by Federal or state  authorities;
(iii) the United States shall have become  engaged in  hostilities,  there shall
have been an  escalation  of  hostilities  involving  the United States or there
shall  have been a  declaration  of a  national  emergency  or war by the United
States;  or (iv) there shall have  occurred  such a material  adverse  change in
general  economic,   political  or  financial   conditions  (or  the  effect  of
international  conditions on the financial markets of the United States shall be
such) as to make it in each of the  instances  set forth in clauses  (i),  (ii),
(iii)  and  (iv)  herein,  in the  reasonable  judgment  of the  Representative,
impractical or  inadvisable  to proceed with the public  offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus. 

     R. The Representative  shall have received a letter from Deloitte & Touche,
LLP, dated on or before the Closing Date, in form and substance  satisfactory to
the Representative  and special counsel for the Underwriters,  addressed to each
of the  Underwriters  to the effect that they have performed  certain  specified
procedures  requested by the Representative  with respect to the information set
forth in the Prospectus and certain matters relating to the Depositor.          

     S. The  Representative  and special counsel for the Underwriters shall have
received copies of any opinions of counsel supplied to the rating  organizations
relating to any matters  with  respect to the  Certificates.  Any such  opinions
shall be dated the Closing  Date and  addressed to each of the  Underwriters  or
accompanied by reliance letters to the  Representative  or shall state that each
of the Underwriters may rely upon them.                                         

T. RESERVED.                                                          

     U. There has not  occurred  any  change,  or any  development  involving  a
prospective  change,  in  the  condition,  financial  or  otherwise,  or in  the
earnings, business or operations,  since December 31, 1996, of the Depositor and
its subsidiaries,  that is in the Representative's judgment material and adverse
and that makes it in the Representative's  judgment  impracticable to market the
Offered  Certificates  on  the  terms  and  in the  manner  contemplated  in the
Prospectus.                                                                     

     V. Counsel for the  Originators  shall have  furnished to the  Underwriters
their written opinion  addressed to the Underwriters and the Depositor and dated
the Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that the respective Purchase Agreement has been duly authorized, executed
and delivered by such Originator, and assuming the due authorization,  execution
and deliver of such  agreements by the other parties  thereto,  constitutes  the
legal, valid and binding agreement of such Originator, enforceable against it in
accordance  with its terms,  subject  as to  enforceability  to (x)  bankruptcy,
insolvency,  reorganization,  moratorium, receivership or other similar laws now
or hereafter  in effect  relating to  creditors'  rights  generally  and (y) the
qualification  that the remedy of specific  performance and injunctive and other
forms of  equitable  relief  may be  subject to  equitable  defenses  and to the
discretion,  with  respect  to such  remedies,  of the  court  before  which any
proceedings with respect thereto may be brought.                                

     If any condition specified in this Section VI shall not have been fulfilled
when and as required to be  fulfilled,  this  Agreement may be terminated by the
Underwriters  by notice to the  Depositor at any time at or prior to the Closing
Date, and such termination  shall be without liability of any party to any other
party except as provided in Section VII.                                        

     All  opinions,  letters,  evidence  and  certificates  mentioned  above  or
elsewhere  in this  Agreement  shall  be  deemed  to be in  compliance  with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.                                                

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     SECTION VII.  Payment of Expenses.  If the  transaction  closes,  or if the
transaction  fails  to  close  other  than  as a  result  of a  failure  of  the
Underwriters to perform hereunder,  the Depositor,  agrees to pay: (a) the costs
incident to the authorization,  issuance,  sale and delivery of the Certificates
and any taxes payable in  connection  therewith;  (b) the costs  incident to the
preparation,  printing and filing under the Securities  Act of the  Registration
Statement and any amendments and exhibits  thereto  (including the  Prospectus);
(c) the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective  amendments thereof (including, in
each case,  exhibits),  the  Prospectus  and any  amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement;  (d) the costs of reproducing and  distributing  this Agreement;
(e) the fees and expenses of qualifying  the  Certificates  under the securities
laws of the several  jurisdictions  as  provided  in Section  V(G) hereof and of
preparing,  printing  and  distributing  a  Blue  Sky  Memorandum  and  a  Legal
Investment  Survey  (including  related  fees and  expenses  of  counsel  to the
Representative);  (f) any fees charged by securities  rating services for rating
the Offered  Certificates;  (g) the cost of the accountant's  letter relating to
the Prospectus  except for expenses  relating to the  accountant's  audit of the
loan files; and (h) all other costs and expenses  incident to the performance of
the obligations of the Depositor  (including costs and expenses of its counsel);
provided that,  except as provided in this Section VII, the  Underwriters  shall
pay their own costs and  expenses,  including  the costs and  expenses  of their
counsel,  any transfer taxes on the Offered Certificates which they may sell and
the expenses of advertising any offering of the Offered Certificates made by the
Underwriters,  and  the  Underwriters  shall  pay the  cost of any  accountant's
comfort  letters  which  such  Underwriters  choose to request  relating  to any
Computational Materials (as defined herein).                                    

     If this Agreement is terminated by the  Underwriters in accordance with the
provisions  of  Section  VI or  Section  XI,  whether  or not  the  transactions
contemplated   hereunder  are   consummated,   the  Depositor  shall  cause  the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses.        

     SECTION VIII. Indemnification and Contribution.  A. The Depositor agrees to
indemnify  and hold  harmless  each  Underwriter  and each  person,  if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
or Section 12 of the  Exchange  Act from and  against  any and all loss,  claim,
damage  or  liability,  joint or  several,  or any  action  in  respect  thereof
(including,  but not limited to, any loss,  claim,  damage,  liability or action
relating  to  purchases  and sales of the Offered  Certificates),  to which such
Underwriter  or any such  controlling  person  may  become  subject,  under  the
Securities Act or otherwise,  insofar as such loss, claim, damage,  liability or
action  arises out of, or is based  upon,  (i) any untrue  statement  or alleged
untrue statement of a material fact contained in the Registration  Statement, or
any  amendment  thereof or  supplement  thereto,  (ii) the  omission  or alleged
omission to state in the  Registration  Statement a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
any untrue statement or alleged untrue statement of a material fact contained in
the  Prospectus,  or any amendment  thereof or supplement  thereto,  or (iv) the
omission or alleged omission to state in the Prospectus a material fact required
to be stated therein or necessary to make the statements  therein,  in the light
of the  circumstances  under  which they were  made,  not  misleading  and shall
reimburse such Underwriter and each such controlling person promptly upon demand
for any legal or other expenses  reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending or preparing to
defend  against  any such  loss,  claim,  damage,  liability  or  action as such
expenses are incurred; provided, however, that the Depositor shall not be liable
in any such case to the extent that any such loss, claim,  damage,  liability or
action arises out of, or is based upon,  any untrue  statement or alleged untrue
statement  or  omission  or  alleged  omission  made in the  Prospectus,  or any
amendment thereof or supplement thereto, or the Registration  Statement,  or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written  information  furnished  to  the  Depositor  by or  on  behalf  of  such
Underwriter  specifically  for inclusion  therein (except to the extent that any
untrue statement or alleged untrue statement or omission or alleged             

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omission is a result of Seller  Provided  Information  which is not accurate and
complete in all material  respects).  The  foregoing  indemnity  agreement is in
addition  to any  liability  which  the  Depositor  may  otherwise  have  to any
Underwriter or any controlling person of any of such Underwriter.               

     B. Each  Underwriter  severally  agrees to indemnify  and hold harmless the
Depositor,  each  of  its  directors,  each  of  its  officers  who  signed  the
Registration  Statement,  and each person,  if any,  who controls the  Depositor
within the  meaning of  Section  15 of the  Securities  Act or Section 12 of the
Exchange Act against any and all loss, claim, damage or liability, or any action
in respect  thereof,  to which the  Depositor or any such  director,  officer or
controlling  person may become  subject,  under the Securities Act or otherwise,
insofar as such loss,  claim,  damage,  liability or action arises out of, or is
based upon, (i) any untrue  statement or alleged untrue  statement of a material
fact  contained  in the  Prospectus,  or any  amendment  thereof  or  supplement
thereto,  or (ii) the omission or alleged  omission to state  therein a material
fact  required to be stated  therein or necessary to make the  statements in the
Prospectus, when considered in conjunction with the Prospectus, and in the light
of the  circumstances  under which they were made, not  misleading,  but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged  omission was made in reliance upon and in  conformity  with
written  information  furnished  to  the  Depositor  by or  on  behalf  of  such
Underwriter   specifically  for  inclusion  therein,  and  shall  reimburse  the
Depositor and any such director,  officer or controlling person for any legal or
other expenses reasonably incurred by the Depositor or any director,  officer or
controlling person in connection with investigating or defending or preparing to
defend  against  any such  loss,  claim,  damage,  liability  or  action as such
expenses are incurred, provided, however, that no Underwriter shall be liable to
the extent that such untrue  statements or alleged untrue  statement or omission
or  alleged  omission  is a result of Seller  Provided  Information  that is not
accurate  and  complete  in  all  material  respects.  The  foregoing  indemnity
agreement is in addition to any liability  which any  Underwriter  may otherwise
have to the Depositor or any such director, officer or controlling person.      

     C. Promptly after receipt by any indemnified  party under this Section VIII
of notice of any claim or the commencement of any action, such indemnified party
shall,  if a claim in respect  thereof is to be made  against  any  indemnifying
party under this Section VIII,  notify the indemnifying  party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify an  indemnifying  party shall not relieve it from any liability  which it
may have under this  Section  VIII  except to the extent it has been  materially
prejudiced by such failure and, provided further, that the failure to notify any
indemnifying  party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section VIII.                   

     If any such claim or action shall be brought against an indemnified  party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to  participate  therein and, to the extent that it wishes,  jointly
with any other  similarly  notified  indemnifying  party,  to assume the defense
thereof with counsel  reasonably  satisfactory to the indemnified  party.  After
notice from the indemnifying  party to the indemnified  party of its election to
assume the defense of such claim or action, except to the extent provided in the
next  following  paragraph,  the  indemnifying  party shall not be liable to the
indemnified  party  under  this  Section  VIII for any  legal or other  expenses
subsequently  incurred by the  indemnified  party in connection with the defense
thereof other than reasonable costs of investigation.                           

     Any indemnified  party shall have the right to employ  separate  counsel in
any such  action and to  participate  in the defense  thereof,  but the fees and
expenses  of such  counsel  shall be at the  expense of such  indemnified  party
unless:  (i) the  employment  thereof has been  specifically  authorized  by the
indemnifying  party in  writing;  (ii) such  indemnified  party  shall have been
advised by such counsel that there may be one or more legal  defenses  available
to it  which  are  different  from  or  additional  to  those  available  to the
indemnifying  party  and  in the  reasonable  judgment  of  such  counsel  it is
advisable for such                                                              

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indemnified  party to employ separate counsel;  or (iii) the indemnifying  party
has failed to assume the  defense of such action and employ  counsel  reasonably
satisfactory to the indemnified  party, in which case, if such indemnified party
notifies the  indemnifying  party in writing  that it elects to employ  separate
counsel at the expense of the indemnifying  party, the indemnifying  party shall
not have the  right to  assume  the  defense  of such  action  on behalf of such
indemnified  party, it being understood,  however,  the indemnifying party shall
not,  in  connection  with any one such  action or  separate  but  substantially
similar or  related  actions in the same  jurisdiction  arising  out of the same
general  allegations or  circumstances,  be liable for the  reasonable  fees and
expenses of more than one separate  firm of attorneys  (in addition to one local
counsel per  jurisdiction) at any time for all such indemnified  parties,  which
firm  shall  be  designated  in  writing  by  the  related  Underwriter,  if the
indemnified  parties under this Section VIII consist of one or more Underwriters
or any of its or their controlling persons, or the Depositor, if the indemnified
parties  under  this  Section  VIII  consist  of  the  Depositor  or  any of the
Depositor's directors, officers or controlling persons.                         

     Each  indemnified  party,  as  a  condition  of  the  indemnity  agreements
contained  in Section  VIII(A) and (B),  shall use its best efforts to cooperate
with the  indemnifying  party in the  defense  of any such  action or claim.  No
indemnifying  party  shall be  liable  for any  settlement  of any  such  action
effected  without its written  consent (which consent shall not be  unreasonably
withheld),  but if  settled  with  its  written  consent  or if there be a final
judgment for the plaintiff in any such action,  the indemnifying party agrees to
indemnify and hold harmless any  indemnified  party from and against any loss or
liability by reason of such settlement or judgment.                             

     Notwithstanding  the  foregoing  paragraph,  if at any time an  indemnified
party shall have requested an  indemnifying  party to reimburse the  indemnified
party for fees and expenses of counsel,  the  indemnifying  party agrees that it
shall be liable  for any  settlement  of any  proceeding  effected  without  its
written  consent if (i) such  settlement is entered into more than 30 days after
receipt  by such  indemnifying  party of the  aforesaid  request  and (ii)  such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such  settlement.  No indemnifying  party
shall,  without the prior written consent of the indemnified  party,  effect any
settlement  of any  pending  or  threatened  proceeding  in respect of which any
indemnified  party is or could have been a party and  indemnity  could have been
sought hereunder by such indemnified party,  unless such settlement  includes an
unconditional  release of such  indemnified  party from all  liability on claims
that are the subject matter of such proceeding.                                 

     D. Computational  Materials.  Not later than 10:30 a.m. New York City time,
on the business day before the date on which the Current Report  relating to the
Certificates  is  required  to be filed  by the  Depositor  with the  Commission
pursuant to Section V.M hereof,  each Underwriter shall deliver to the Depositor
five complete copies of all materials,  if any,  provided by such Underwriter to
prospective  investors  in such  Certificates  which  constitute  "Computational
Materials" within the meaning of the no-action letter dated May 20, 1994, issued
by the Division of  Corporation  Finance of the  Commission  to Kidder,  Peabody
Acceptance  Corporation  I,  Kidder,  Peabody  & Co.  Incorporated,  and  Kidder
Structured Asset Corporation, the no-action letter dated May 27, 1994, issued by
the Division of Corporation  Finance of the Commission to the Public  Securities
Association  and the  no-action  letter  of  February  17,  1995  issued  by the
Commission to the Public Securities Association  (collectively,  the "Kidder/PSA
Letters")  and the filing of which is a condition of the relief  granted in such
letters (such materials being the "Computational  Materials").  Each delivery of
Computational Materials to the Depositor pursuant to this paragraph (a) shall be
effected by delivering four copies of such material to counsel for the Depositor
on behalf of the Depositor and one copy of such materials to the Depositor.     

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     E. Each Underwriter  severally and not jointly agrees to indemnify and hold
harmless the Depositor,  each of the Depositor's officers and directors and each
person  who  controls  the  Depositor  within  the  meaning of Section 15 of the
Securities  Act and Section 12 of the  Exchange  Act against any and all losses,
claims,  damages  or  liabilities,  joint or  several,  to which they may become
subject under the Securities Act or otherwise,  insofar as such losses,  claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue  statement of a material  fact  contained  in the  Computational
Materials  provided by such  Underwriter,  or arise out of or are based upon the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein,  when considered in
conjunction  with the Prospectus,  and in the light of the  circumstances  under
which  they  were  made,  not  misleading,  and  agrees to  reimburse  each such
indemnified  party for any legal or other expenses  reasonably  incurred by him,
her or it in connection with  investigating  or defending or preparing to defend
any such loss, claim, damage, liability or action as such expenses are incurred,
provided,  however,  that no Underwriter shall be liable to the extent that such
untrue statements or alleged untrue statement or omission or alleged omission is
a result of Seller Provided Information that is not accurate and complete in all
material respects. The obligations of an Underwriter under this Section VIII (E)
shall be in addition to any liability which such Underwriter may otherwise have.

     The procedures set forth in Section VIII (C) shall be equally applicable to
this Section VIII (E).                                                          

     F. If the  indemnification  provided for in this Section VIII shall for any
reason be unavailable to or insufficient  to hold harmless an indemnified  party
under  Section  VIII (A),  (B) or (E) in respect of any loss,  claim,  damage or
liability,  or any action in respect  thereof,  referred to  therein,  then each
indemnifying  party  shall,  in lieu of  indemnifying  such  indemnified  party,
contribute to the amount paid or payable by such  indemnified  party as a result
of such loss, claim, damage or liability,  or action in respect thereof,  (i) in
such  proportion  as shall be  appropriate  to  reflect  the  relative  benefits
received by the  Depositor on the one hand and the related  Underwriters  on the
other from the  offering  of the  related  Offered  Certificates  or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the indemnified  party failed to give the notice required under Section VIII(C),
in such  proportion as is appropriate to reflect not only the relative  benefits
referred to in clause (i) above but also the relative  fault of the Depositor on
the one hand and the  related  Underwriter  on the  other  with  respect  to the
statements or omissions which resulted in such loss, claim, damage or liability,
or  action  in  respect  thereof,  as  well  as  any  other  relevant  equitable
considerations.                                                                 

     The relative  benefits of an Underwriter  and the Depositor shall be deemed
to be in such  proportion  as the total net proceeds  from the offering  (before
deducting  expenses)  received by the Depositor  bear to the total  underwriting
discounts and commissions  received by the related Underwriter from time to time
in negotiated sales of the related Offered Certificates.                        

     The relative fault of an Underwriter  and the Depositor shall be determined
by  reference  to whether the untrue or alleged  untrue  statement of a material
fact or  omission  or  alleged  omission  to state a  material  fact  relates to
information  supplied or prepared by the Depositor or by such  Underwriter,  the
intent of the parties and their relative  knowledge,  access to information  and
opportunity to correct or prevent such statement or omission and other equitable
considerations.                                                                 

     The  Depositor  and the  Underwriters  agree  that it would not be just and
equitable  if  contributions  pursuant  to  this  Section  VIII(F)  were  to  be
determined by pro rata allocation (even if the Underwriters  were treated as one
entity for such  purposes) or by any other method of  allocation  which does not
take into account the equitable  considerations  referred to herein.  The amount
paid or payable by an indemnified party as a result of the loss,  claim,  damage
or liability, or action in respect thereof, referred                            

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to above in this  Section  VIII(F)  shall be deemed to include,  for purposes of
this Section VIII(F),  any legal or other expenses  reasonably  incurred by such
indemnified party in connection with  investigating or defending any such action
or claim.                                                                       

     For purposes of this Section VIII, in no case shall any Underwriter (except
with  respect  to  any  document  (other  than  the   Computational   Materials)
incorporated by reference into the  Registration  Statement or Prospectus at the
request of such Underwriter and except as may be provided in any agreement among
the  Underwriters  relating  to the  offering of the  Offered  Certificates)  be
responsible  for any  amount  in  excess  of (x)  the  amount  received  by such
Underwriter in connection with its resale of the Offered  Certificates  over (y)
the  amount  paid  by  such   Underwriter  to  the  Depositor  for  the  Offered
Certificates  by such  Underwriter  hereunder.  No person  guilty of  fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any person who was not guilty of such
fraudulent misrepresentation.                                                   

     The  Depositor  and each  Underwriter  expressly  waive,  and  agree not to
assert,  any  defense  to  their  respective  indemnification  and  contribution
obligations under this Section VIII which they might otherwise assert based upon
any  claim  that such  obligations  are  unenforceable  under  federal  or state
securities laws or by reason of public policy.                                  

"Seller-Provided  Information"  means any computer  tape (or other  information)
furnished to any Underwriter by the Seller  concerning the assets comprising the
Trust.                                                                          

     G. Each Underwriter  severally confirms that the information regarding such
Underwriter  set  forth in the last  paragraph  on the front  cover  page of the
Prospectus  Supplement  and  the  Computational   Materials  furnished  by  such
Underwriter are correct,  and, the Depositor  acknowledges that such information
constitutes the only information  furnished in writing to the Depositor by or on
behalf  of any  Underwriter  specifically  for  inclusion  in  the  Registration
Statement and the Prospectus.                                                   

     SECTION IX. Representations, Warranties and Agreements to Survive Delivery.
All  representations,  warranties and agreements  contained in this Agreement or
contained in agreements delivered pursuant hereto or certificates of officers of
the Depositor submitted pursuant hereto shall remain operative and in full force
and  effect,  regardless  of  any  investigation  made  by or on  behalf  of the
Underwriters or controlling persons thereof, or by or on behalf of the Depositor
and shall survive delivery of any Offered Certificates to the Underwriters.     

     SECTION X.  Default by One or More of the  Underwriters.  If one or more of
the   Underwriters   participating   in  the  public  offering  of  the  Offered
Certificates shall fail at the Closing Date to purchase the Offered Certificates
which it is (or they  are)  obligated  to  purchase  hereunder  (the  "Defaulted
Certificates"),  then the  non-defaulting  Underwriters  shall  have the  right,
within  48  hours  thereafter,  to  make  arrangements  for  one or  more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the  Defaulted  Certificates  in such amounts as may be agreed
upon and upon the terms  herein set forth (as used in this  Agreement,  the term
"Underwriter" includes any underwriter substituted for an Underwriter under this
Section X). If, however,  the Underwriters  have not completed such arrangements
within such 48-hour period, then:                                               

     (i) if the aggregate  original  principal amount of Defaulted  Certificates
does not exceed 10% of the aggregate  original  principal  amount of the Offered
Certificates  to be purchased  pursuant to this  Agreement,  the  non-defaulting
Underwriters  named in this  Agreement  shall be  obligated to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder  bear  to the  underwriting  obligations  of all  such  non-defaulting
Underwriters, or                                                                

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     (ii) if the aggregate original  principal amount of Defaulted  Certificates
exceeds  10%  of  the  aggregate   original  principal  amount  of  the  Offered
Certificates to be purchased  pursuant to this  Agreement,  this Agreement shall
terminate, without any liability on the part of any non-defaulting Underwriters.

     No action  taken  pursuant to this Section X shall  relieve any  defaulting
Underwriter  from the liability with respect to any default of such  Underwriter
under this Agreement.                                                           

     In the event of a default by any  Underwriter  as set forth in this Section
X, each of the  Underwriters  and the Depositor shall have the right to postpone
the Closing Date for a period not  exceeding  seven  Business Days in order that
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements may be effected.                                      

     SECTION XI.  Termination of Agreement.  The Underwriters may terminate this
Agreement  immediately upon notice to the Depositor,  at any time at or prior to
the Closing Date if any of the events or  conditions  described in Section VI(Q)
of this  Agreement  shall  occur  and be  continuing.  In the  event of any such
termination, the provisions of Section VII, the indemnity agreement set forth in
Section VIII, and the provisions of Sections IX and XIV shall remain in effect. 

     SECTION XII.  Notices.  All  statements,  requests,  notices and agreements
hereunder shall be in writing, and:                                             

     A. if to the  Underwriters,  shall be delivered  or sent by mail,  telex or
facsimile transmission to the Representative at its address set forth above;    

     B. if to the  Depositor,  shall be delivered  or sent by overnight  mail or
facsimile  transmission to 700 North Pearl Street,  Suite 2400, LB #342, Dallas,
TX 75201-7424, Attn.: General Counsel, Fax No. 214-953-7757.                    

     SECTION  XIII.  Persons  Entitled  to the Benefit of this  Agreement.  This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Depositor, and their respective successors. This Agreement and the terms and
provisions  hereof are for the sole benefit of only those  persons,  except that
the  representations,  warranties,  indemnities and agreements contained in this
Agreement  shall also be deemed to be for the  benefit of the person or persons,
if any, who control any of the Underwriters  within the meaning of Section 15 of
the Securities Act, and for the benefit of directors of the Depositor,  officers
of the  Depositor  who have  signed the  Registration  Statement  and any person
controlling  the  Depositor  within the meaning of Section 15 of the  Securities
Act.  Nothing in this  Agreement  is intended or shall be  construed to give any
person,  other than the persons  referred to in this Section XIII,  any legal or
equitable  right,  remedy or claim under or in respect of this  Agreement or any
provision contained herein.                                                     

     SECTION  XIV.  Survival.  The  respective   indemnities,   representations,
warranties  and  agreements of the Depositor and the  Underwriters  contained in
this Agreement, or made by or on behalf of them, respectively,  pursuant to this
Agreement,  shall survive the delivery of and payment for the  Certificates  and
shall remain in full force and effect,  regardless of any investigation  made by
or on  behalf  of any of  them  or  any  person  controlling  any of  them.  The
provisions of Sections V, VII and VIII hereof shall survive the  termination  or
cancellation of this Agreement.                                                 

     SECTION XV.  Definition of the Term  "Business  Day".  For purposes of this
Agreement,  "Business  Day" means any day on which the New York Stock  Exchange,
Inc. is open for trading.                                                       

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     SECTION XVI.  Governing  Law;  Submission to  Jurisdiction.  This Agreement
shall be governed by and construed in  accordance  with the laws of the State of
New York without giving effect to the conflict of law rules thereof.            

     The parties hereto hereby submit to the  jurisdiction  of the United States
District Court for the Southern  District of New York and any court in the State
of New York located in the City and County of New York, and appellate court from
any  thereof,  in any  action,  suit  or  proceeding  brought  against  it or in
connection  with  this  Agreement  or  any  of  the  related  documents  or  the
transactions  contemplated  hereunder or for  recognition  or enforcement of any
judgment,  and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.                          

     SECTION XVII. Counterparts.  This Agreement may be executed in counterparts
and, if executed in more than one counterpart,  the executed  counterparts shall
each be  deemed  to be an  original  but all such  counterparts  shall  together
constitute one and the same instrument.                                         

     SECTION XVIII.  Headings.  The headings herein are inserted for convenience
of  reference  only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.                                           

     SECTION  XIX.  Amendments  and  Waivers.  This  Agreement  may be  amended,
modified,  altered or terminated,  and any of its provisions  waived,  only in a
writing signed on behalf of the Depositor and the Representative.               

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     If the foregoing  correctly sets forth the agreement  between the Depositor
and the Underwriters,  please indicate your acceptance in the space provided for
the purpose below.                                                              

               Very truly yours,

                            AMRESCO RESIDENTIAL SECURITIES
         CORPORATION

                              /s/ Janice M. Cott
                                       By:--------------------------------------
                   Name:  Janice M. Cott
                   Title: Vice President

CONFIRMED AND ACCEPTED, as                                                      
of the date first above written:                                          

PRUDENTIAL SECURITIES INCORPORATED                                              
Acting on its own behalf and as                                                 
Representative of the several                                                   
Underwriters referred to in the                                                 
foregoing Agreement                                                             

/s/ Sean Low                                                    
By:------------------------------                                               
Name:   Sean Low                                                                
Title:  Vice President                                                          

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SCHEDULE A

                                                        [Enlarge/Download Table]


                           Class of Certificates  Initial Principal Amount of   Purchase  
Name of                       Purchased by the     Certificates Purchased by     Price    
Underwriter                     Underwriters             Underwriters          (% of Par) 
-----------                     ------------             ------------          ---------- 

                                                                                          
Prudential Securities                                                                     
Incorporated                                                                              
                                   A-1                     $29,270,850           99.96875%
                                   A-2                     $26,700,000          100.00000%
                                   A-3                     $40,853,616           99.98438%
                                   A-4                     $16,737,384           99.98438%
                                   A-5                     $12,776,006           99.96875%
                                   A-6                      $8,938,603           99.98438%
                                   A-7                     $22,174,601           99.95313%
                                   A-8                     $17,340,000          100.00000%
                                   A-9                    $200,854,200          100.00000%
                                   M-1F                     $7,489,859           99.96875%
                                   M-1A                    $15,262,800          100.00000%
                                   M-2F                    $10,987,283           99.98438%
                                   M-2A                    $14,652,000          100.00000%
                                   B-1F                     $6,491,771           99.96875%
                                   B-1A                    $13,431,000          100.00000%
                                                           -----------                    
                                  TOTAL                              $                    

Credit Suisse First Boston                                                                
                                   A-1                      $9,756,950           99.96875%
                                   A-2                      $8,900,000          100.00000%
                                   A-3                     $13,617,872           99.98438%
                                   A-4                      $5,579,128           99.98438%
                                   A-5                      $4,258,669           99.96875%
                                   A-6                      $2,979,534           99.98438%
                                   A-7                      $7,391,534           99.95313%
                                   A-8                      $5,780,000          100.00000%
                                   A-9                     $66,951,400          100.00000%
                                   M-1F                     $2,496,620           99.96875%
                                   M-1A                     $5,087,600          100.00000%
                                   M-2F                     $3,662,428           99.98438%
                                   M-2A                      4,884,000          100.00000%
                                   B-1F                     $2,163,924           99.96875%
                                   B-1A                     $4,477,000          100.00000%
                                                            ----------                    
                                  TOTAL:                             $                    

Morgan Stanley & Co.                                                                      
Incorporated                                                                              
                                   A-1                     $$9,756,950           99.96875%
                                   A-2                      $8,900,000          100.00000%
                                   A-3                     $13,617,872           99.98438%
                                   A-4                      $5,579,128           99.98438%
                                   A-5                      $4,258,669           99.96875%
                                   A-6                      $2,979,534           99.98438%
                                   A-7                      $7,391,534           99.95313%
                                   A-8                      $5,780,000          100.00000%
                                   A-9                     $66,951,400          100.00000%
                                   M-1F                     $2,496,620           99.96875%
                                   M-1A                     $5,087,600          100.00000%
                                   M-2F                     $3,662,428           99.98438%
                                   M-2A                     $4,884,000          100.00000%
                                   B-1F                     $2,163,924           99.96875%
                                   B-1A                     $4,477,000          100.00000%
                                                            ----------                    
                                  TOTAL                  $739,933,287.50                  

                                  TOTAL:                             $                    

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		9/3/97		3
Filed on:		6/27/97							8-K
For Period End:		6/12/97		7					8-K,  8-K/A
		6/9/97		17
		6/5/97		2
		6/1/97		3
		3/31/97		17
		12/31/96		18
		7/28/96		3
		11/9/95		17
		2/17/95		21
		5/27/94		21
		5/20/94		21
									List all Filings