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                                                                    EXHIBIT 10.7


Public Securities Association
40 Broad Street. New York, NY 10004-2373
Telephone (212) 8097000                                               [PSA LOGO]

                          MASTER REPURCHASE AGREEMENT

                                                   Dated as of: NOVEMBER $" 1999

Between:

IMPACT WAREHOUSE LENDING GROUP

and

STARNET FINANCIAL, INC. AND STARNET MORTGAGE

1. Applicability

     From time to time the parties hereto may enter into transactions In which
one party ("Seller") agrees to transfer to the other ("Buyer") securities or
financial instruments ("Securities") against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Securities at
a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and shall be governed
by this Agreement, Including any supplemental terms or conditions contained In
Annex 1 hereto, unless otherwise agreed In writing.

2. Definitions

     (a) "Act of Insolvency", with respect to any party, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar low, or such party seeking
the appointment of a receiver, trustee, custodian or similar official for such
party or any substantial part of its property, or (il) the commencement of any
such case or proceeding against such party, or another seeking such an
appointment, or the fifing against a party of an application for a protective
decree under the provisions of the Securities Investor Protection Act of 1970,
which (A) Is consented to or not timely contested by such party, (B) results In
the entry of an order for relief, such an appointment, the Issuance of such a
protective decree or the entry of an order having a similar effect, or (C) is
not dismissed within 15 days, (lil) the making by a party of a general
assignment for the benefit of creditors, or (iv) the admission In writing by a
party of such p arty's Inability to pay such party's debts as they become due;

     (b) "Additional Purchased Securities ", Securities provided by Seller to
Buyer pursuant to Paragraph 4(a) hereof;

     (c) "Buyer's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of a percentage (which may be equal to
the percentage that is agreed to as the Seller's Margin Amount under
subparagraph (q) of (his Paragraph), agreed to by Buyer and Seller prior to
entering Into the Transaction, to the Repurchase Price for such Transaction as
of such date;

     (d) "Confirmation", the meaning specified in Paragraph 3(b) hereof;

     (e) "Income", with respect to any Security at any time, an principal
thereof then payable and all interest, dividends or other distributions thereon;

     (f) "Margin Deficit", the meaning specified In Paragraph 4(a) hereof;

     (g) "Margin Excess", the meaning specified In Paragraph 4(b) hereof;

     (h) "Market Value", with respect to any Securities as of any date, the
price for such Securities on such date obtained from a generally recognized
source agreed to by the parties or the most recent closing bid quotation from
such a source, plus accrued Income to the extent not included therein (other
then any Income credited or transferred to, or applied to the obligations of,
Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to
market practice for such Securities);

     (i) "Price Differential", with respect to any transaction hereunder as of
any date, the aggregate amount obtained by daily application of the Pricing Rate
for such Transaction to the Purchase Price for such Transaction on a 360 day per
year basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential
previously paid by Seller to Buyer With respect to such Transaction);



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     (j) "Pricing Rate", the per annum percentage rate for determination of the
Price Differential;

     (k) "Prime Rate", the prim rate of U.S. money center commercial banks as
published In The Wall Street Journal;

     (l) "Purchase Date", the d to on which Purchased Securities are transferred
by Seller to Buyer;

     (m) "Purchase Price", (i) o the Purchase Date, the price at which Purchased
Securities are transferred by Seller to Buyer, and (ii) thereafter, such price
increased by the amount of any cash transferred by Buyer to Seller pursuant to
Paragraph (b) hereof and decreased by the amount of any cash transferred by
Seller to Buyer pursuant to Paragraph 4) hereof or applied to reduce Seller's
obligations under clause (ii) of Paragraph 5 hereof;

     (n) "Purchased Securities", the Securities transferred by Seller to Buyer
in a Transaction hereunder, and any Securities substituted therefore In
accordance with Paragraph 9 hereof. The term "Purchased Securities" to Paragraph
4(a) and shall exclude Securities returned pursuant to Paragraph 4(b);

     (o) "Repurchase Date", the date on which Seller Is to repurchase the
Purchased Securities from Buyer, including any date determined by application of
the provisions of Paragraphs 3(c) or 11 hereof;

     (p) "Repurchase Price", the price at which Purchased Securities are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination, Increased by any amount deter tried by the application of the
provisions of Paragraph 11 hereof;

     (q) "Seller's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of a percentage (which may be equal to
the percentage that is agreed to as the Buyer's Margin Amount under subparagraph
() of this Paragraph), agreed to by Buyer and Seller prior to entering Into the
Transaction, to the Repurchase Price for such Transaction as of such date.

3. Initiation; Confirmation; Termination

     (a) An agreement to enter into a Transaction may be made orally or in
writing at the Initiation of either Buyer or Seller. On the Purchase Data for
the Transaction, the Purchases) Securities shall be transferred to Buyer or its
agent against the transfer of a Purchase price to an account of Seller.

     (b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller
(or both), as shall be agreed, shall promptly deliver to the other party a
written confirmation of each Transaction (a "Confirmation"). The Confirmation
shall describe the Purchased Securities (Including CUSIP number, if any),
Identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase
Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on
demand, (Iv) the Pricing Rate or Repurchase Price. applicable to the
Transaction, and (v) any additional terms or conditions of the Transaction not
inconsistent with this Agreement. The Confirmation, together wits this
Agreement, shall constitute conclusive evidence of the terms agreed between
Buyer and Seller with r sped to the Transaction to which the Confirmation
relates, unless with respect to the Confirmation specific o action is made
promptly. after receipt thereof. In the event of any conflict between the terms
of such Confirmation and this Agreemen t this Agreement shall prevail.

     (c) In the case of transactions terminable upon demand, such demand shall
be made by Buyer or Seller, no later than such time as Is customary in
accordance with market practice, by telephone or otherwise on or prior to the
business day on which su termination will be effective. On the date specified in
such demand, or on the date fixed for termination In the case of Transactions
having a fixed term, termination of the Transaction will be effected by transfer
to Seller or I s agent of the purchased Securities and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against
the transfer of the Repurchase Price to an account of Buyer.

4. Margin Maintenance

     (a) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions In which a particular party hereto 1 acting as Buyer
is less than the aggregate Buyer's Margin Amount for all such Transactions (a
"Margin Deficit), the Buyer may by notice to Seller require Seller In such
Transactions, at Seller's option, to transfer to Buyer cash or additional
Securities reasonably acceptable to Buyer ("Additional Purchased Securities"),
so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer's Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions In which such Buyer
Is acting as Seller).

     (b) If at any time the egg gets Market Value of all Purchased Securities
subject to all Transactions In which a particular party hereto s acting as
Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at
such time (a "~1Aargin Excess"), then Seller may by notice to Buyer require
Buyer In such Transactions, at Buyer's option o transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the Purchased
Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller's Margin Amount
(increased by the amount of any Margin Excess as of such date arising f m any
Transactions in which such Seller is acting as Buyer).

     (c) Any cash transferred pursuant to this Paragraph shall be attributed to
such Transactions as shall be agreed upon by Buyer and Seller.


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     (d) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both) under
subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin
Deficit or Margin Excess exceeds a specified dollar amount or a specified
percentage of the Repurchase Prices for such Transactions (which amount or
percentage shall be agreed to by Buyer and Seller prior to entering Into any
such Transactions).

     (e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under subparagraphs
(a) and (b) of this Parah to require the elimination of a Margin Deficit or a
Margin Excess, as the case may be, may be exercised whenever such a Margin
Deficit or Margin Excess exists with respect to any single Transaction hereunder
(calculated without regard to any other Transaction outstanding under this
Agreement).

5. Income Payments

     Where a particular Transaction's term extends over an Income payment date
on the Securities subject to that Transaction, Buyer shall, as the parties may
agree with respect to such Transaction (or, In the absence of any agreement, as
Buyer shall reasonably determine In its distribution), on the date such Income
is payable either (i) transfer to or credit to the account of Seller an amount
equal to such Income payment or payments with respect to any Purchased
Securities subject to such Transaction or (ii) apply the Income payment or
payments to reduce the amount to be transferred to Buyer by Seller upon
termination of the Transaction. Buyer shell not be obligated to take any action
pursuant to the preceding sentence to the extent that such action would result
in the creation of a Margin Deficit, unless prior thereto or simultaneously
therewith Seller transfers to Buyer cash or Additional Purchased Securities
sufficient to eliminate such Margin Deficit.

6. Security Interest

     Although the parties Intend that all transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security Interest In, all of the Purchased
Securities with respect to all Transactions hereunder and all proceeds thereof.

7. Payment and Transfer

     Unless otherwise mutually agreed, all transfers of funds hereunder shall be
In immediately available funds. All Securities transferred by one party hereto
to the other party (i) shall be In suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment In blank and
such other documentation as the party receiving possession may reasonably
request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to
Seller and Buyer. As used herein with respect to Securities; "transfer" is
Intended to have the same meaning as when used In Section 8-313 of the New York
Uniform Commercial Code or, where applicable, In any federal regulation
governing transfers of the Securities.

8. Segregation of Purchased Securities

     To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities In Its possession
and shall be identified as subject to this Agreement. Segregation may be
accomplished by appropriate Identification on the books and records of the
holder, Including a financial intermediary or a clearing corporation. Title to
all Purchased Securities shall pass to Buyer an, unless otherwise agreed by
Buyer and Seller, nothing In this Agreement shall preclude Buyer from engaging
In repurchase transactions with the Purchased Securities or otherwise pledging
or hypothecating the Purchased Securities, but no such transaction shall relieve
Buyer of its obligations to transfer Purchased Securities to Seller pursuant to
Paragraphs 3, 4, or 11 hereof, or of Buyer's obligation to credit or pay Income
to, or apply Income to the obligations of, Seller pursuant to Paragraph 5
hereof.

     Required Disclosure for Transactions In Which the Seller Retains Custody of
     the Purchased Securities

     Seller is not permitted to substitute other securities for those subject to
this Agreement and therefore must keep Buyer's securities segregated et ell
times, unless In this Agreement Buyer and Seller the right to substitute other
settlements. If Buyer grants its right to substitute, this means that Buyer's
securities will likely be commingled with Seller's own securities during the
trading day. Buyer Is advised that, during any trading day. that Buyer's needs
are commingled with Sellers' securities, the [will/may] be subject to Ikens
granted by Seller to pta clearing bank]' [third -parties]" and may be used by
SeNeer for deliveries on other securities transactions. Whenever the securities
are commingled, Seller's ability to resegregate substitute securities for Buyer
will be subject to Seller's ability to at" [the clearing]' [any]" lien or to
obtain substitute securities.

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

*    Language to be used under 17 C.F.R. ss.403.4(e) if Seller is a government
     securities; broker or dealer other than a financial institution.

**   Language to be used under 17 C.F.R. ss.403.4(d) if Seller is s financial
     institution.


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9. Substitution

     (a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such substitution
shall be made by transfer to Buyer of such other Securities and transfer to
Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.

     (b) In Transactions in which the Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be deemed, for purposes
of subparagraph (a) of this Paragraph, to have agreed to and accepted In this
Agreement substitution by Seller of other Securities for Purchased Securities;
provided, however, that such other Securities shall have a Market Value at least
equal to the Market Value of the Purchased Securities for which they are
substituted.

10. Representations

     Each of Buyer and Seller represents and warrants to the other that (1) it
Is duly authorized to execute and deliver this Agreement, to enter Into the
Transactions contemplated hereunder and to perform Its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) It will engage In such Transactions as principal (or, If
agreed in writing In advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement on Its
behalf Is duly authorized to do so on Its behalf (or on behalf of any such
disclosed principal), (Iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect and
(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by w hich it is bound or by which any of
its assets are affected. On the Purchase Date for any Transaction Buyer and
Seller shall each be deemed to repeat all the foregoing representations made by
it.

11. Events of Default

     In the event that (i) Seller falls to repurchase or Buyer falls to transfer
Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer
fails, after one business day's notice, to comply with Paragraph 4 hereof, (ill)
Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of Insolvency occurs
with respect to Seller or Buyer, (v) any representation made by Seller or Buyer
shall have been Incorrect or untrue In any material respect when made or
repeated or deemed to have been made or repeated, or (vi) Seller or Buyer shall
admit to the other Its inability to, or its Intention not to, perform any of Its
obligations hereunder (each an 'Event of Default'):

     (a) At the option of the nondefaulting party, exercised by written notice
to the defaulting party (which option shall be deemed to have been exercised,
even If no notice is given, Immediately upon the occurrence of an Act of
Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed
Immediately to occur.

     (b) In all Transactions in which the defaulting party is acting as Seller,
if the nondefeulting party exercises or is deemed to have exercised the option
referred to In subparagraph (a) of the Paragraph, (i) the defaulting party's
obligations hereunder to repurchase all Purchased Securities in such
Transactions shall thereupon become immediately due and payable, (ii) to the
extent permitted by applicable law, the Repurchase Price with respect to each
such Transaction shall be Increased by the aggregate amount obtained by dally
application of (x) the greater of the Pricing Rate for such Transaction or the
Prime Rate to (y) the Repurchase Price for such Transaction as of the Repurchase
Date as determined pursuant to subparagraph (a) of this Paragraph (decreased as
of any day by (A) any amounts retained by the riondefaulting party with respect
to such Repurchase Price pursuant to clause (iii) of the subparagraph, (B) any
proceeds from the sale of Purchased' Securities pursuant to subparagraph (d)(i)
of this Paragraph, and (C) any amounts credited to the account of the defaulting
party pursuant to subparagraph (a) of the Paragraph) on a 360 day per year basis
for the actual number of days during the period from and including the date of
the Event of Default giving rise to such option to but excluding the date of
payment of the Repurchase Price as so Increased, (iii) all Income paid after
such exercise or deemed exercise shall be retained by the nondefeulting party
and applied to. the aggregate unpaid Repurchase Prices owed by the defaulting
party, and (iv) the defaulting party shall immediately deliver to the
nondefaulting party any Purchased Securities subject to such Transactions then
in the defaulting party's possession.

     (c) In all Transactions In which the defaulting party is acting as Buyer,
upon tender by the nondefaulting party of payment of the aggregate Repurchase
Prices for all such Transactions, the defaulting party's right, title and
interest in ail Purchased Securities subject to such Transactions shall be
deemed transferred to the nondefaulting party, and the defaulting party shall
deliver all such Purchased Securities to the non defaulting party.

     (d) After one business day's notice to the defaulting party (which notice
need not be given if an Act of Insolvency shall have occurred, and which may be
the notice given under subparagraph (a) of this Paragraph or the notice referred
to in clause (ii) of the first sentence of this Paragraph), the nondefaulting
party may:

         (i) as to Transactions in which the defaulting party Is acting as
     Seller, (A) Immediately sell, In a recognized market at such price or
     prices as the nondefaulting party may reasonably deem satisfactory, any or
     all Purchased Securities subject to such Transactions and apply the
     proceeds thereof to the aggregate



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     unpaid Repurchase Prices and any other amounts owing by the defaulting
     party hereunder or (B) in its sole discretion elect, In lieu of selling all
     or a portion of such Purchased Securities, to give the defaulting party
     credit for such Purchased Securities In an amount equal to the price
     therefor on such date, obtained from a generally recognized source or the
     most recent dosing bid quotation from such a source, against the aggregate
     unpaid Repurchase Prices and any other amounts owing by the defaulting
     party hereunder, and

         (ii) as to the Transactions In which the defaulting party Is acting as
     Buyer, (A) purchase securities ("Replacement Securities") of the same class
     and amount as any Purchased Securities that are not delivered by the
     defaulting party to the nondefoulting party as required hereunder or (B) in
     its sole discretion elect, in lieu of purchasing Replacement Securities, to
     be deemed to have purchased Replacement Securities at the price therefor on
     such date, obtained from a generally recognized source or the most recent
     closing bid quotation from such a source.

     (e) As to Transactions in which the defaulting party is acting as Buyer,
the defaulting party shall be liable to the nondefaulting party (i) with respect
to Purchased Securities (other than Additional Purchased Securities), for any
excess of the price paid (or deemed paid) by the nondefauRlng party for
Replacement Securities therefor over the Repurchase Price for such Purchased
Securities and (il) with respect to Additional Purchased Securities, for the
price paid (or deemed paid) by the nondefoulting party for the Replacement
Securities therefor. In addition, the defaulting party shall be liable to the
nondefoulting party for Interest on such remaining liability with respect to
each such purchase (or deemed purchase) of Replacement Securities from the date
of such purchase (or deemed purchase until paid in full by Buyer. Such interest
shall be at a rate equal to the greater of the Pricing Rate for such Transaction
or the Prime Rate.

     (f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder In respect of which the defaulting party Is acting as
Buyer shall not increase above the amount of such Repurchase Price for such
Transaction determined as of the date of the exercise or deemed exercise by the
nondefaufting party of Its option under subparagraph (a) of this Paragraph.

     (g) The defaulting party shall be liable to the nondefaulting party for the
amount of all reasonable legal or other expenses Incurred by the nondefoulting
party in connection with or as a consequence of an Event of Default, together
with Interest thereon at a rate equal to the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate.

     (h) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to It under an other agreement or
applicable law.

12. Single Agreement

     Buyer and Seller acknowledge that, and have entered hereunto and will enter
Into each Transaction hereunder In consideration of and In reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made In consideration of each other.
Accordingly, each of Buyer and Seller agrees (1) to perform all of its
obligations In respect of each Transaction hereunder, and that a default In the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction against
obligations owing to them In respect of any other Transactions hereunder and
(111) that payments, deliveries and other transfers made by either of them In
respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers In respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.

13. Notices and Other Communications

     Unless another address Is specified in writing by the respective party to
whom any notice or other communication Is to be given hereunder, all such
notices or communications shall be in writing or confirmed in writing and
delivered at the respective addresses set forth In Annex II attached hereto.

14. Entire Agreement; Severability

     This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

15. Non-assignability; Termination

     The rights and obligations of the parties under this Agreement and under
any Transaction shall not be assigned by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall Inure to the benefit of the parties
and their respective successors and assigns. This Agreement may be canceffed by
either party upon giving written notice to the other, except that this Agreement
shall, notwithstanding such notice, remain applicable to any Transactions then
outstanding.


<PAGE>   6

16. Governing

     Law This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.

17. No Waivers, Etc.

     No express or Implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder. No modification or waiver of any provision of this agreement and no
consent by any party to a departure herefrom shall be effective unless and until
such shall be in writing and duly executed by both of the parties hereto.
Without limitation on any of the foregoing, the failure to give a notice
pursuant to subparagraphs 4(a) or 4(b) hereof will not constitute a waiver of
any right td do so at a later date.

18. Use of Employee Plan Assets

     (a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be
used by either party hereto (the 'Pian Party") In a Transaction, the Plan Party
shall so notify the other party prior to the Transaction. The Plan Pity shall
represent In writing to the other party that the Transaction does not constitute
a prohibited transaction under ERISA or Is otherwise exempt therefrom, and the
other party may proceed In reliance thereon but shall not be required so to
proceed.

     (b) Subject to the last sentence of subparagraph (a) of this Paragraph, any
such Transaction shall proceed only If Seller furnishes or has furnished to
Buyer Its most rest available audited statement of its financial condition and
its most recent subsequent unaudited statement of its financial condMon.

     (c) By entering Into a Transaction pursuant to this Paragraph, Seller shall
be deemed (I) to represent to Buyer that since the date of Seller's latest such
financial statements, there has been no material adverse change in Seller's
financial condition which Seller has not disclosed to Buyer, and (II) to agree
to provide Buyer with future audited and unaudited statements of Its financial
condition as the y are Issued, so long as It Is a Seller In any outstanding
transaction Involving a Plan Party.

19. Intent

     (a) The parties recognize that each Transaction is a "repurchase agreement"
as that term Is defined In Section 101 of Title 11 of the United States Code, as
amended (except Insofar as the type of Securities subject to such Transaction or
the term of such Transaction would render such dellnition inapplicable), and a
"securities contract" as that term is defined in Section 741 of Title 11 of the
United States Code, as amended.

     (b) It is understood that either party's right to liquidate Securities
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Paragraph 11 hereof, Is a contractual right to
liquidate such Transaction as described in Sections 555 and 559 of Title 11 of
the United States Code, as amended.

20. Disclosure Relating to Certain Federal Protections

          The parties acknowledge that they have been advised that:

     (a) in the case of Transactions In which one of the parties Is a broker or
dealer registered with the Securities and Exchange Commission ("SEC") under
Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 ((degree)SIPA") do not protect
the other party with respect to any Transaction hereunder;

     (b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and

     (c) in the case of Transactions in which one of the parties Is a financial
Institution, funds held by the financial Institution pursuant to a Transaction
hereunder are not a deposit and therefore are not Insured by the Federal Deposit
Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.

IMPAC WAREHOUSE LENDING GROUP, INC.          STARNET FINANCIAL, INC. AND
                                             STARNET MORTGAGE


By                                           By   /s/ [ILLEGIBLE]
   -------------------------------------        --------------------------------
Title                                        Title  President
      ----------------------------------           -----------------------------
Date                                         Date  11/5/99
     -----------------------------------          ------------------------------

<PAGE>   7

                                    ANNEX I

                       SUPPLEMENTAL TERMS AND CONDITIONS

<PAGE>   8

                                    ANNEX II

             NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES


<PAGE>   9

                                    ANNEX I

                       SUPPLEMENTAL TERMS AND CONDITIONS


     The Master Repurchase Agreement between Impac Warehouse Lending Group
("Buyer") and STARNET FINANCIAL,1NC. AND STARNET MORTGAGE ("Seller"), dated as
of NOVEMBER !, 1999 is amended and supplenented as set fcath below. All
capitalized terms used herein that are defined in the Master Repurchase
Agreement are used herein as defined therein except to the extent such terms are
amended or supplemented herein.

     1. Paragraph 1 of the Master Repurchase Agreement is amended by adding the
following after the word "instruments" and before the parenthetical
"("Securities")" in the second line thereof

         "or whole mortgage loans or any interests in any whole mortgage loans,
     including, without limitation, mortgage participation certificates and
     mortgage passthrough certificates".

     2. Subparagraph 2(a) of the Master Repurchase Agreement is amended by
adding the following after the word "any" and before the word "bankruptcy" in
the second line thereof

         "conservatorship or receivership (within the meaning of the Financial
     Institutions Reform, Recovery, and Enforcement Act of 1989),".

     3. Subparagraph 2(a) of the Master Repurchase Agreement is further amended
by adding the following after the word "a" and before the word "receiver" in the
third line thereof

         "conservator,".

     4. Subparagraph 2(h) of the Master Repurchase Agreement is amended by
deleting the defined term "Market Value" and replacing it with the defined term
"Assumed Repurchase Value", and the term Market Value throughout the Master
Repurchase Agreement shall be deemed to denote the Assumed Repurchase Value.

     5. Subparagraph 2(h) of the Master Repurchase Agreement is amended by
adding at the end thereof

         "except that the Assumed Repurchase Value of any Securities that are
     loans secured by mortgages or deeds of trust on residential dwellings (such
     loans, "Mortgage Loans") as of any date shall be the dollar amount ascribed
     to such Mortgage Loans on that date by Buyer in its reasonable and sole
     discretion, and shall not include any Income on such Mortgage Loans paid to
     and held by Seller pursuant to Paragraph 5 hereof, and the Assumed
     Repurchase Value of any Additional Purchased Securities shall be the fair
     market value thereof as determined by Buyer Nrvo1:1aso91.p OMM i:sspn
     I17sn-00M1 in its reasonable and sole discretion"


<PAGE>   10

     6. Subparagraph 3(b) ~of the Master Repurchase Agreement is amended by
adding at the end of the first sentence of Paragraph 3(b):

         "In the case of Transactions involving Securities that are Mortgage
     Loans, (a) the Purchased Securities shall be identified on a detailed
     listing to be provided by Seller to Buyer (a "Mortgage Loan Schedule")
     attached to a Certificate of Seller in the form attached hereto, (li) the
     Confirmation shall be sent by Seller to Buyer, (c) the documents contained
     it the Mortgage File (as defined in Paragraph 7) shall be delivered at the
     option of the Buyer to the Buyer, or the Custodian, and held by the
     Custodian pursuant to the terns of a Custody Agreement, dated of even date
     herewith (the "Custody Ag ement"), among Seller, Buyer and Custodian
     pursuant to which Custodian shall, among other things, issue Trust
     Receipts, as defined therein (the "Trust Receip "), and (d) the Mortgage
     Loans shall be serviced for Buyer by Seller pursuant t the Servicing
     Agreement, dated of even date herewith (the "Servicing Agreement" , between
     Seller and Buyer."

     7. Paragraph 3(b) of le Master Repurchase Agreement is fiuther amended by
deleting the last sentence and replacing it with the following:

         "In the event of any conflict between the terms of such Confirmation
     and this Agreement, the terms o: 'such Confirmation shall prevail."

     8. Subparagraph 3(c) pf the Master Repurchase Agreement is amended by
adding at the end of the first sentence of Pa iagraph 3(c);

         "In the case of Tr actions involving Securities that are Mortgage
     Loans, (i) which meet the requiremen of the Seller's Warranties Agreement,
     such demand by Buyer may not be made rior to 60 days following the date of
     the Transaction in which the Securities were oiiginally conveyed to Buyer
     provided no event of default has occurred; (ii) which do o not meet the
     requirements of the Seller's Warranties Agreement in all material respects,
     such demand by Buyer may be made at any time; or (iii) Seller may repurch a
     at any time, irrespective of whether the particular Mortgage Loans(s) meets
     t requirements of the Seller's Warranties Agreement. In any case, such
     demand eith6r by Buyer or by Seller shall be for a repurchase of all
     Purchased Securities subject to the related Transaction and such demand
     shall be made no later than 5:00 p.n)l. New York City tune on the business
     day preceding the day on which such termination will be effective, which
     termination shall also be on a business day. Upon receipt of the Repurchase
     Price in immediately available funds, Buyer shall deliver the Trust Receipt
     for such Transaction to Custodian for further disposition in accordance
     with the terms of the Custody Agreement." i


<PAGE>   11

     9. Paragraph 4 of the Master Repurchase Agreement is amended by adding a
new subparagraph (f) as follows:

         "(f) In the case of Transactions involving Securities that are Mortgage
     Loans, (i) the percentage used in calculating Buyer's Margin Amount for
     such Transaction shall be the percentage specified in the Confirmation and
     (ii) Additional Purchased Securities shall be limited .to obligations
     issued by the United States government or mortgaged-backed securities
     issued by the Federal National Mortgage Association ("FNMA") or guaranteed
     by the Government National Mortgage Association ("GNMA") and otherwise
     acceptable to Buyer in its sole discretion, and (iii) the provisions of
     subparagraphs (b), (d) and (e) of this Paragraph shall not apply."

     10. Paragraph 5 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 5:

         "Notwithstanding the foregoing and except as provided in Paragraph 11
     of this Agreement, in the case of Transactions involving Securities that
     are Mortgage Loans, Seller shall be deemed to hold for the benefit of, and
     in trust for, Buyer all Income, including without limitation all scheduled
     and unscheduled principal and interest payments, received by Seller with
     respect to such Mortgage Loans. Seller shall service the Mortgage Loans, or
     supervise the servicing of the Mortgage Loans, for the benefit of Buyer in
     accordance with the terms of the Servicing Agreement. On the 10th day of
     each month, Seller will provide Buyer with reports substantially identical
     in form to FNMA's form 2010 remittance report with respect to all Mortgage
     Loans then involved in any Transaction hereunder. Within three business
     days of its receipt of each such report, Buyer either (i) shall determine
     that a Margin Deficit has occurred and direct Seller to pay to Buyer all
     Income received in the period covered by such report to the exte nt of such
     Margin Deficit, in which case Buyer shall be deemed to have released any
     excess Income to Seller, or (ii) shall determine that a Margin Deficit has
     not occurred, in which case Buyer shall be deemed to have released all such
     Income to Seller."

     11. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "the" and before the words "Purchased Securities" in
the fourth line thereof

         "Seller's right (including the power to convey title thereto), title
     and interest in and to the".

     12. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the words "Purchased Securities" and before the word "with" in
the fourth line thereof

<PAGE>   12

         ", the contractual right to receive payments, including the right to
     payments of principal and interest and the right to enforce such payments,
     arising from or under any oithe Purchased Securities, the contractual right
     to service each Mortgage Loan, any dub-servicing agreements with respect to
     each Mortgage Loan, and all documents ~n each Mortgage File,".

     13. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "all" and before the word "proceeds" in the fifth line
thereof I

         "income, payments, products and".

     14. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "tliereof'and before the period in the fifth line
thereof i i

         "(the "Collateral")".

     15. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 6:

         "In such event, the parties hereto intend to create for the benefit of
     Buyer, as secured party, a legally valid and enforceable first priority
     perfected security interest in the Collateral. On or prior to each Purchase
     :Date, Seller shall cause to be filed in the appropriate filing offices of
     the jurisdiction in which Seller maintains its place of business, or 'its
     chief executive office if Seller has more than one place of business, in
     accordance with applicable law, Uniform Commercial Code financing
     statements naming Sellar as debtor, Buyer as secured party, and the
     Collateral as collateral." 1

     16. Paragraph 7 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 7:

         "In the case of Transactions involving Securities that are Mortgage
     Loans, the transfer ;of such Mortgage Loans for the ,purposes of this
     Paragraph 7 shall include the delivery to the Buyer or Custodian, as
     directed by the Buyer, the following dc#cuments (the "Mortgage File") with
     respect to each Mortgage Loan, as set forth in the Custody Agreement:
     subject, however, to the paragraph immediately following clAuse (xii)
     below;" I

         (i) the original note or other evidence of indebtedness (the "Mortgage
     Note") of the obligor thereon (each such obligor, a "Mortgagor"), endorsed
     to the order of or assigned to Seller by the holder/payee thereof, without
     recourse, and endorsed by Seller, without recourse, in blank;

         (ii) the original mortgage, deed of trust or other instrument (the
     "Mortgage")'creating a first lien on the underlying property securing the
     Mortgage Loan (the "Mortgaged Property"), naming Seller as the "mortgagee"
     or "beneficiary"


<PAGE>   13

     thereof, and bearing on the face thereof the address of Seller as provided
     in Paragraph 13 of this Agreement, or, if the Mortgage does not name Seller
     as the mortgagee/beneficiary, the Mortgage, together with an instrument of
     assignment assigning the Mortgage, individually or together with other
     Mortgages, to Seller and bearing on the face thereof the address of Seller
     as provided in Paragraph 13 of this Agreement, and, in either case, bearing
     evidence that such instruments have been recorded in the appropriate
     jurisdiction where the Mortgaged Property is located (or, in lieu of the
     original of the Mortgage or the assignment thereof, a duplicate or
     conformed copy of the Mortgage or the instrument of assignment, if any,
     together with a certificate of either the closing attorney or an officer of
     the title insurer that issued the related title insurance policy, or a
     certificate of receipt from the recording office, certifying that such copy
     or copies represent true and correct copy(ies) of the originals) and th at
     such originals) have been or are currently submitted to be recorded in the
     appropriate governmental recording office of the jurisdiction where the
     Mortgaged Property is located);

         (iii) an original assignment of Mortgage, in blank, which assignment
     shall be in form and substance acceptable for recording and, in the event
     that the Seller acquired the Mortgage Loan in a merger, the assignment must
     be by "[Seller], successor by merger to [name of predecessor)";

         (iv) any intervening assignment of the Mortgage not included in (ii)
     above, including any warehousing assignment;

         (v) any assumption, modification, extension or guaranty agreement;

         (vi) the Lender's title insurance policy, or, if such policy has not
     been issued, a written commitment or interim binder issued by the title
     insurance company evidencing that the required title insurance coverage is
     in effect and unconditionally guaranteeing the holder of the Mortgage Loan
     that the lender's title insurance policy will be issued;

         (vii) if applicable, any policy or certificate of primary mortgage
     guaranty insurance;

         (viii) if the Mortgage Note or Mortgage or any other material document
     or instrument relating to the Mortgage Loan has been signed by a person on
     behalf of the Mortgagor, the power of attorney or other instrument that
     authorized and, empowered such person to sign with recording information
     thereon;

         (ix) with respect to FHA insured Mortgage Loans, the original FHA '`
     Insurance Contract, together with a completed HUD Form 92080 "Mortgagee
     Record Change" with the Purchasing Mortgagees name left blank;


<PAGE>   14
         (x) with respect to VA guaranteed Mortgage Loans, the original VA Loan
     Guaranty Certificate;

         (xi) with respect to each Mortgage Loan which is subject to the
     provisions of the Homeownership and Equity Protection Act of 1994, a copy
     of a notice to each entity which was a purchaser or assignee of the
     Mortgage Loan, satisfying the provisions of such Act and the regulations
     issued thereunder, to the effect that the Mortgage low is subject to
     special truth in lending rules; and (xii) any other document as may be
     requested by Buyer.

         "Notwithstanding the above; Seller shall, at least one Business Day
     prior to the related Purchase Date, deliver to or cause to be delivered to
     Buyer or Custodian, as directed by Buyer, originals or true copies of such
     documents contained in the Mortgage File; and within forty-eight (48) hours
     after such purchase date Seller shall deliver or cause to be delivered to
     Buyer or Custodian, as directed by Buyer, the originals (to the extent not
     previously delivered) of all such documents in the Mortgage File. Failure
     by Seller to deliver or cause to be delivered such documents within
     such time periods specified in the immediately preceding sentence shall
     constitute an Event of Default under the Master Repurchase Agreement.
     Seller shall cause each closing agent to hold any originals of such
     documents in the Mortgage File held by such closing agent prior to delivery
     thereof to Buyer or Custodian,, as directed by Buyer, in trust and as
     bailee for Buyer.

         In addition to the documents contained in the Mortgage File, Seller
     shall deliver to buyer on or prior to the Purchase Date for such
     Transaction a security release certification acceptable to Buyer,
     cartifying the release of any security interest of a third party which may
     have existed with respect to any of the Mortgage Loans subject to such
     Transaction during the 45-day period prior to the related Purchase Date.

         Seller shall include on each Mortgage Lean Schedule a code indicating
     whether the Mortgage Loan is subject to the Homeownership and Equity
     Protection Act of 1994."

     Seller shall cause to be maintained a servicing file ("Servicing File")
with respect to each Mortgage Loan that shall contain the following documents:

         (a)   copies of all the documents contained in the Mortgage File;

         (b)   any instrument necessary to complete identification of any
               exception set forth in the exception schedule in the title
               insurance policy (e.g., map or plat, restrictions, easements,
               sewer agreements,
<PAGE>   15

                           home association declarations, etc.);

                  (c)      a survey of the Mortgaged Property;

                  (d)      any hazard insurance policy or flood insurance
                           policy, with extended coverage of the hazard
                           insurance policy;

                  (e)      the Mortgage Loan closing statement (Form HUD-1) and
                           any other truth-in-lending, real estate settlement
                           procedure forms or other disclosure statements
                           required by law;

                  (f)      the residential loan application, if applicable;

                  (g)      any verification of employment and income;

                  (h)      if applicable, any verification of acceptable
                           evidence of source and amount of downpayment;

                  (i)      any credit report on the borrower under the Mortgage
                           Loan;

                  (j)      each residential appraisal report;

                  (k)      a photograph of the Mortgaged :Property;

                  (1)      any tax receipts, insurance premiums, ledger sheets,
                           payment records, insurance claim files. and
                           correspondence, current and historical computerized
                           data files, underwriting standards used for
                           origination and all other papers and records
                           developed or originated by the Seller, any servicer
                           or others, required to document the Mortgage Loan or
                           to service the Mortgage Loan; and

                  (m)      any other document as may be requested by Buyer.

Seller shall cause to be delivered to Buyer each Servicing File: upon Event of
Default by Seller under the Master Repurchase Agreement.

         17. Paragraph 8 of the Master Repurchase Agreement is amended by
deleting the last sentence of Paragraph 8 and substituting the following:

                  "Title to all Purchased Securities (except for Securities that
         are Mortgage Loans) shall pass to Buyer. In the case of Purchased
         Securities that are Mortgage



<PAGE>   16

         Loans, upon transfer of the Mortgage Loans to Buyer as set forth in
         Paragraph 3(a) of this Agreement and until termination of any
         Transactions as set forth in Paragraphs 3(c) or 11 of this Agreement,
         ownership of each Mortgage Loan, including each document in the related
         Mortgage File, is vested in Buyer. Upon transfer of the Mortgage Loans
         to Buyer as set forth in Paragraph 3(a) of this Agreement and until
         termination of any Transactions as set forth in Paragraphs 3(c) or 11
         of this Agreement, record title in the name of Seller to each Mortgage
         shall be retained by Seller in trust, for the benefit of Buyer, for the
         sole purpose of facilitating the servicing and the supervision of the
         servicing of the Mortgage Loans pursuant to the Servicing Agreement.
         Unless otherwise agreed by Buyer and Seller, nothing in this Agreement
         shall preclude Buyer from engaging in repurchase transactions with the
         Purchased Securities or othmwise pledging or hypothecating the
         Purchased Securities, but no such transaction shall rel ieve Buyer of
         its obligations to transfer Purchased Securities (and, with respect to
         the Mortgage Loans, not substitutes therefor) to Seller pursuant to
         Paragraphs 3, 4 or 11 hereof. Upon termination of any Transactions as
         set forth in Paragraph 3(c) of this Agreement, Buyer agrees to execute
         promptly endorsements of the Mortgage Notes, assignments of the
         Mortgages and UCC-3 assignments, to the extent that such documents are
         prepared by Seller for Buyer's execution, are delivered to Buyer by
         Seller and are necessary to reconvey, without recourse, to Seller and
         perfect title of like tenor to that conveyed to Buyer to the related
         Mortgage Loans. Buyer agrees to cooperate with Seller to identify
         documents that may be required to effect such reconveyance and
         perfection of title to Seller."

         18. Subparagraph 9(b) of the Master Repurchase Agreement is amended by
adding the following after the word "substituted" and before the, period in the
fifth line thereof.

                  "; provided, further, that, in the case of Transactions
         involving Securities that are Mortgage Loans, the retention by Seller
         of custody of any document in any Mortgage File or otherwise shall be
         held by Seller in trust Buyer for purposes of servicing or supervising
         the servicing of the related Mortgage Loan and shall not be deemed to
         constitute Seller's retention of custody of the Purchased Securities
         for purposes of this subparagraph".

         19. Paragraph 10 of the Master Repurchase Agreement is amended by
adding the following clauses at the end of the first sentence of Paragraph 10
after the word "affected" and before the period:

                  ", (vi) Seller and Buyer have entered into the Transaction
         described in each Confirmation contemporaneously with the sale of the
         Purchased Securities by Seller to Buyer and the transfer of the
         Purchase Price by Buyer to Seller, or, in the event that the
         Transaction is deemed to constitute a loan, contemporaneously with the
         grant of the security interest in the Collateral by Seller to Buyer
         pursuant to Paragraph 6 hereof and the transfer of the consideration
         therefor, consisting of the



<PAGE>   17

         extension of the Purchase Price, which represents the loan proceeds, by
         Buyer to Seller, (vii) the board of directors of Seller has approved
         the form of Confirmation and the Master Repurchase Agreement, and such
         approval is reflected in the minutes of said board, and (viii) each
         Confirmation, the Master Repurchase Agreement, the Custody Agreement
         and the Servicing Agreement have been and shall be, continuously, from
         the time of, their execution, a corporate record of Seller."

         20. Paragraph 11 is amended by inserting the words ", other than any
representation made by Seller as to a particular Mortgage Loan," after the words
"made by Seller or Buyer" on the fourth line thereof.

         21. Paragraph 11 is further amended by deleting the word "or"
immediately preceding clause (vi) and by adding at the end of such clause,
immediately preceding the parenthesis, the following:

         (vii)    Buyer shall have reasonably determined that Seller is or will
                  be unable to meet its commitments under this Agreement, the
                  Custody Agreement, the Guaranty, the Sellers Warranties
                  Agreement, the Servicing Agreement and any other related
                  agreement (such agreements, the "Transaction Documents") and
                  shall have notified Seller of such determination and such
                  other party shall not have responded with appropriate
                  information to the contrary to the satisfaction of the
                  notifying party within 24 hours;

         (viii)   The Master Repurchase Agreement shall for any reason cease to
                  create a valid, first priority security interest min any of
                  the Purchased Securities purported to be covered thereby;

         (ix)     A final judgment by any competent court in the United States
                  of America for the payment of money in an amount of at least
                  $100,000 is rendered against Seller, and the same remains
                  undischarged for a period of 30 days during which execution of
                  such judgment is not effectively stayed;

         (x)      Seller shall fail to observe or perform any of the covenants
                  or agreements under any Transaction Document, which failure
                  materially and adversely affects the rights of the Buyer;

         (xi)     Any event of default or any event which with notice, the
                  passage of time or both shall constitute an event of defilult
                  shall occur and be continuing under any repurchase or other
                  financing agreement for borrowed funds or, indenture for
                  borrowed funds by which Seller is bound or affected shall
                  occur and be continuing;

         (xii)    In the good faith judgment of Buyer, a material adverse change
                  shall have



<PAGE>   18

                  occurred in the business, operations, properties, prospects or
                  condition (financial or otherwise) of Seller,

         (xiii)   Seller shall request written assurances as to the financial
                  well-being of Buyer and such assurances shall not have been
                  provided within 24 hours of such request;

         (xiv)    Seller shall be in default with respect to any normal and
                  customary covenants under any debt contract or agreement, any
                  servicing agreement or any lease to which it is a party, which
                  default could materially and adversely affect the financial
                  condition of Seller (which covenants include, but are not
                  limited to, an Act of Insolvency of Seller or the failure of
                  Seller to make required payments under such contract or
                  agreement as they become due);

         (xv)     Any representation or warranty made b; y Seller in any
                  Transaction Document shall have been incorrect or untrue in
                  any material respect (to the extent that such representation
                  or warranty does not incorporate a materiality limitation in
                  its terms) when made or repeated or when deemed to have been
                  made or repeated;

         (xvi)    Seller shall fail to promptly notify Buyer of (i) the
                  acceleration of any debt obligation or the termination of any
                  credit facility of Seller, respectively; (ii) the amount and
                  maturity of any such debt assumed after the date hereof; (iii)
                  any adverse developments with respect to pending or future
                  litigation involving Seller, respectively; and (iv) any other
                  developments which might materially and adversely affect the
                  financial condition of Seller,

         (xvii)   Seller's audited annual financial statements or the notes
                  thereto or other opinions or conclusions stated therein shall
                  be qualified or limited by' reference to Selleess status as a
                  "going concern";

         (vxiii)  Seller shall fail to maintain a tangible net worth of no less
                  than $ 1,000,000. The term "tangible net worth" shall mean the
                  excess of all of the Seller's assets (excluding any value for
                  goodwill, trademarks, patents, copyrights, organization
                  expense and other similar intangible items) over all its
                  liabilities as completed and determined in accordance with
                  generally accepted accounting principles consistently applied.

         (xx)     Seller shall fail to deliver to Buyer or Custodian as directed
                  by Buyer the documents in the Mortgage File within the time
                  period specified in 1 Paragraph 7 of the Master Repurchase
                  Agreement.



<PAGE>   19

         22. Subparagraph 11 (d) of the Master Repurchase Agreement is amended
by deleting the words that precede Subparagraph 11(d)(i) and replacing them with
the words "The nondefaulting party may with concurrent notice to the defaulting
party".

         23. Subparagraph 11(d)(i) of the Master Repurchase Agreement is amended
by inserting the words "or in any other commercially reasonable manner" after
the word "market" and before the word "at", on the second line thereof.

         24. Subparagraph 11(d)(i) of the Master Repurchase Agreement is amended
by adding the following after the word "hereunder" and before the semi-colon:

                  "and in either case upon the determination and receipt by
         Buyer, in a manner deemed final and complete by Buyer in its sole
         discretion, of the aggregate unpaid Repurchase Prices and any other
         amounts owing by the defaulting party, including, without limitation,
         any unpaid fees, expenses or other amounts owing to the Custodian under
         the Custody Agreement, or to which Buyer is otherwise entitled
         hereunder, Buyer shall transfer the portion of the Purchased Securities
         and proceeds thereof, including without limitation, any proceeds of a
         sale of the servicing rights to the Mortgage Loans, held by Buyer
         following, such receipt to either (i) Seller, if in Buyer's sole
         discretion Seller is legally entitled thereto, (ii) such other party or
         person as is in Buyer's reasonable judgment is legally entitled
         thereto, or (iii) if Buyer cannot determine in its reasonable judgment
         the person or party entitled thereto, a court of competent
         jurisdiction."

         25. Paragraph 11 of the Master Repurchase Agreement is amended by
adding a new Subparagraph (j) as follows:

                  "(j) Seller acknowledges that any delay in the ability of
         Buyer to exercise its remedies pursuant to Paragraph 11 hereof shall.
         result in irreparable injury to Buyer."

         26. Paragraph 13 of the Master Repurchase Agreement is amended by
deleting the text thereof and replacing it with the following:



<PAGE>   20

         "Any notice or mmunication in respect of this Agreement will be
sufficiently given to a p if in writing and delivered in person, sent by
certified or registered mail, return ' t requested, or by overnight courier or
given by facsimile transfer at the fol owing address or facsimile number:

         If to [BUYER]:

               Impac Warehouse Lending Group
               1401 Dove Street
               Newport B h, CA 92660

               Attention: ila Velasco
               Facsimile No.: (949) 475-3950

         If to [SELLER]:

               RADIUS CAPITAL CORPORATION DBA
               HOME MORTGAGE OF AMERICA
               17000 PRESTON RD #350
               DALLAS, TX 75248
               Attention: INDA LEFEVRI9:
               Facsimile Number: (972) 665-0052

         A notice or communicatio will be effective:

         (i)      if delivered by ban or sent by overnight courier, on the day
                  and time it is delivered;

         (ii)     If sent by facsimile transfer, on the day it is sent; or

         (iii)    if sent by certified or registered mail, return receipt
                  requested, three days after dispatch.

         Either party may by notic to the other change the address or facsimile
         number at which notices or communi ations are to be given to it."

         27. Paragraph 14 of th Master Repurchase Agreement is amended by
inserting the words "with respect to Securities that consist of mortgage loans"
after the word "transactions" I and befbre the period on the second line
thereof.



<PAGE>   21

         28. Intentionally Omitted

         29. Intentionally Omitted

         30. Subparagraph 20(c) is amended by deleting the words "the Federal
Savings and Loan Insurance Corporation" in the third line thereof and
substituting therefor the following: "through either the Bank Insurance Fund or
the Savings Association Insurance Fund,".

         31. This Annex I is executed and shall be construed as an agreement
supplemental to the Master Repurchase Agreement and, as provided in the Master
Repurchase Agreement, this Annex I forms a part then f.

         32. All of the covenants , stipulations, promises and agreements in
this Annex I shall bind the successors and assigns of the parties hereto,
whether expressed or not.

         33. This Annex I may b e executed in any number of counterparts, each
of which shall be an original but such counterparts all together constitute but
one and the same instrument.

         34. Seller shall promptly provide such further assurances or agreements
as Buyer may request in order to effect the purposes of this Master Repurchase
Agreement, including without limitation, the delivery of any further documents
to ensure that Buyer maintains a first priority perfected security interest in
the ollateral pursuant to Paragraph 6 hereof and to carry into effect the
purpose, of the Transaction Docum ents.

         35. Buyer is hereby appointed the attorney-in-fact of Seller for the
purpose of carrying out the provisions of this Agree nt and taking any action
and executing or endorsing any instruments that Buyer may deem nece ary or
advisable to accomplish the purposes hereof, including, without limitation,
completing or correcting any endorsement of a Mortgage Note or assignment of a
Mortgage, which appointment as attoney-in-fact is irrevocable and coupled with
an interest. Without limiting the generality of the foreg6ing, Buyer shall have
the right and power during the occurrence and continuation o any Event of
Default to receive, endorse and collect all checks made payable to the order of
Sell representing any payment on account of the principal of or interest on any
of the Collateral and to give full discharge for the same.

         36. Seller shall promptly pay as and when payment is due all, and Buyer
shall not be liable for any, expenses, fees and charges incurred by Buyer or
Seller (other than the salaries and overhead of Buyer and its affiliate) 'sing
out of or related in any way, to the administration and enforcement of this
Agreement or the Custody Agreement ("Costs"), including,, without limitation,
legal expenses, the fees and expenses of the Custodian, recording and filing
fees and any costs associated with reconveyance of the Purchased Securities and,
in the event that any Costs are incurred by Buyer, Seller shall reimburse Buyer
on demand of Buyer accompanied by a statement describing the circumstances and
the nature of the Cost, by wire transfer of immediately available federal funds.



<PAGE>   22

         37. Seller and Buyer contemplate that all Mortgage Loans purchased by
Buyer and subject to repurchase pursuant to this Master Repurchase Agreement
shall have an average daily balance (in principal amount) of $12,500,000 (the
'Minimum Usage Amount"). If, within forty-five (45) days of the date hereof,
Seller shall not have sold any Mortgage Loans to Buyer pursuant to this Master
Repurchase Agreement, Seller shall promptly pay Buyer $1,500. If at any time
after forty-five (4,5) days after the Seller shall have commenced selling
Mortgage Loans to Buyer, pursuant to this Master Repurchase Agreement but the
avenge daily balance (in principal amount) of all Mortgage Loans held by Buyer
is less than the Minimum Usage Amount, Seller shall pay Buyer a fee to be
determined by Buyer in its sole discretion, provided, however such fee shall not
exceed $1,500 during any thirty (30) day period.

         38. This Annex I shall supersede any existing annex to or modification
of the Master Repurchase Agreement.

[BUYER]                                 [SELLER]
IMPAC WAREHOUSE LENDING GROUP      STARNET FINANCIAL INC
                                   AND
                                   STARNET MORTGAGE

By:                                     By: KENNETH F. URBANAS
   ----------------------                  --------------------------
Name:                                   Name: Kenneth F. Urbanas
     --------------------                    ------------------------
Title:                                  Title: President
      -------------------                     -----------------------
Date:                                   Date: 11/5/99
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