Exhibit No. 10.01

                      LOAN SERVICING PURCHASE AND SALE AGREEMENT


         This Loan Servicing Purchase and Sale Agreement (the "Agreement") is
made and entered into as of July 19, 1999 by and between Fidelity Federal Bank,
a Federal Savings Bank, a federally chartered savings association ("Buyer"),
having its principal place of business at 4565 Colorado Boulevard, Los Angeles,
California 90039, and Western Financial Bank, a federally chartered savings
association ("Seller"), having its principal place of business at 23 Pasteur,
Irvine, California 92718.

                              W I T N E S S E T H:

         WHEREAS, Buyer desires to buy and Seller desires to sell the Servicing
Rights in certain Mortgage Loans secured by first or second liens on real
estate;

         WHEREAS, pursuant to a Loan Servicing Purchase and Sale Agreement dated
May 15, 1996 between Seller, as purchaser and Purchaser, as seller (the "Initial
Sale Agreement"), the Seller purchased the Servicing Rights to certain
residential mortgage loans, including the Mortgage Loans; and

         WHEREAS, pursuant to a Loan Servicing Agreement dated May 15, 1996 by
and between Buyer, as seller and investor, and Seller as buyer and servicer (the
"Servicing Agreement"), Buyer engaged Seller to service on behalf of Buyer
certain of the Mortgage Loans which were owned by Buyer; and

         WHEREAS, pursuant to Amendment No. 1 to the Initial Sale Agreement
dated October 24, 1996 but effective as of May 15, 1996 (the "Initial Sale
Amendment"), Buyer and Seller specified certain additional rights, obligations
and responsibilities with respect to the FNMA Pool, as defined below; and

         WHEREAS, Buyer wishes to purchase and Seller wishes to sell the
Servicing Rights, as defined herein, upon the terms and subject to the
conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows.

                                   ARTICLE I

                                   DEFINITIONS

Section 1.01      Definitions

         All words or phrases defined in this Article I (except as herein
otherwise expressly provided or unless the context otherwise requires) shall,
for all purposes of the Agreement, have the respective meanings specified in
this Article.



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         1.01.01 Accounts Receivable means, including but without limitation,
principal and interest Advances with respect to Mortgage Loans, escrow account
receivables and foreclosure account receivables net of escrow Advances.

         1.01.02 Advances means payments of principal, interest, taxes,
insurance, ground rents, assessments and similar charges advanced on behalf of
the Mortgagor under a Mortgage Loan by Seller or Buyer, as the case may be, with
respect to the Mortgage Loans.

         1.01.03 Agreement means this Loan Servicing Purchase and Sale Agreement
and any written amendments or modifications thereto.

         1.01.04 ARM Claim is defined in Section 5.01.02 of the Initial Sale
Agreement.

         1.01.05 ARM Claim Mortgage Loan means any Mortgage Loan which (i) was,
on the Initial Transfer Date, subject to an ARM Claim or (ii) has otherwise
become subject to an ARM Claim after the Initial Transfer Date.

         1.01.06 Bankruptcy Mortgage Loan means any Mortgage Loan as to which
any borrower is a debtor with respect to any proceeding under the federal
Bankruptcy Code, and which is delinquent by more than one payment.

         1.01.07 Borrower means the obligor on a Mortgage Note.

         1.01.08 Business Day means any day other than Saturday, Sunday or a
legal holiday or a day during which the Purchaser or the Seller is not open for
business.

         1.01.09 Buyer Owned Mortgage Loan means any Mortgage Loan which is
owned by Buyer.

         1.01.10 Class I Mortgage Loan is defined in Section 2.02.

         1.01.11 Class II Mortgage Loan is defined in Section 2.02.

         1.01.12 Custodian means an entity acting as a document custodian with
respect to any Mortgage Loan under any custodial agreement or pursuant to FNMA
requirements, or any successor in interest to the Custodian.

         1.01.13 Cutoff Date means the date each month coinciding with the
applicable Investor accounting cycle on which a reconciliation is performed of
all funds received on behalf of any Investor during the preceding accounting
cycle.

         1.01.14 Document Exception Mortgage Loan means any Mortgage Loan
identified on the schedule of Document Exception Mortgage Loans provided by
Buyer pursuant to Section 2.09.

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         1.01.15 Escrow or Escrow Account means any escrow, impound and
custodial accounts maintained under the Servicing Agreements or otherwise
relating to the Mortgage Loans including, without limitation, any buydown
account and any account established for purposes of receiving funds for the
payment of principal, interest, taxes, insurance premiums, assessments and
similar charges, suspense, buydown funds, completion escrow monies and unearned
fees, provided such fees are deemed earned as collected relating to the Mortgage
Loans and interest accrued on such funds for the benefit of the Mortgagors under
the terms of the Mortgage Loan or applicable law or otherwise.

         1.01.16 Estimated Purchase Price is defined in Section 2.03.01.

         1.01.17 FNMA means the Federal National Mortgage Association, and any
successor thereto.

         1.01.18 FNMA Pool means FNMA Investor Pool 303.

         1.01.19 Foreclosure Mortgage means any Mortgage Loan which has been
either recommended to the Investor for foreclosure by Seller, or is 90 days or
more past due as of the Sale Date, or is actually in foreclosure provided, the
term Foreclosure Mortgage shall exclude any Pending Sale Foreclosure Mortgage.

         1.01.20 Initial Sale Agreement is defined in the second recital.

         1.01.21 Initial Sale Amendment is defined in the fourth recital.

         1.01.22 Initial Transfer Date means the applicable Transfer Date with
respect to a Mortgage Loan as specified in the Initial Sale Agreement.

         1.01.23 Interim Period, with respect to a Mortgage Loan, is the period
between the Sale Date and the applicable Transfer Date.

         1.01.24 Investor means FNMA, Buyer or any other person, party or entity
that owns in whole or in part a Mortgage Loan.

         1.01.25 Mortgage means a mortgage, deed of trust or other instrument
creating a lien or similar interest in real property as security for payment of
a Mortgage Note.

         1.01.26 Mortgage Documents means all documents specified in Exhibit B,
pertaining to a Mortgage Loan.

         1.01.27 Mortgage Loan means a mortgage loan the Servicing Rights with
respect to which are sold by Seller to Buyer under this Agreement, as more fully
identified in Exhibit A, attached hereto. This term includes Class I Mortgage
Loans and Class II Mortgage Loans, but excludes Foreclosure Mortgages and REO
Property, even if the latter are identified on Exhibit A.

         1.01.28 Mortgage Loan File means all documents relating to a Mortgage
Loan that are necessary or customary for servicing in accordance with Investor
guidelines and procedures, applicable law and regulatory requirements,
including, but not limited to those documents described in Exhibit B.

         1.01.29 Mortgage Note means a promissory note secured by a Mortgage.

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         1.01.30 Mortgagor means any mortgagor or trustor of the real estate
encumbered as security for a Mortgage Note.

         1.01.31 P & I means principal and interest.

         1.01.32 PMI means private mortgage insurance and refers, except where
the context otherwise indicates, to the companies providing such insurance.

         1.01.33 Pending Disposition REO Property means REO Property which is,
at the Transfer Date, subject to a pending written purchase and sale agreement.

         1.01.34 Pending Payoff Loan means a Mortgage Loan as to which Seller
has, within the 30 days preceding the Sale Date, received a written request for
beneficiary demand.

         1.01.35 Pending Sale Foreclosure Mortgage shall mean a Foreclosure
Mortgage as to which a notice of sale has been published on or prior to the
Transfer Date.

         1.01.36 Pool means a group of Mortgage Loans that collateralize a
mortgage-backed security issue.

         1.01.37 Purchase Price is defined in Section 2.03.

         1.01.38 Records means Mortgage Loan Files, insurance files, tax
records, collection records, copies of correspondence with the Borrower,
Mortgage Documents, ledgers, computer printouts and other records, data or
information relating to the Mortgage Loans, the Escrow Accounts, the Pools or as
otherwise provided in this Agreement.

         1.01.39 REO Property means real property acquired by Seller upon
foreclosure or deed in lieu of foreclosure in connection with the enforcement of
a Mortgage Loan, including REO Property as defined in the Servicing Agreement.

         1.01.40 Sale Date is defined in Section 2.04.

         1.01.41 Servicing Agreement is defined in the third recital.

         1.01.42 Subservicing Fee is defined in Section 3.01.

         1.01.43 Servicing Rights means all of Seller's right to receive the
servicing fee income and any and all ancillary or other income including,
without limitation, late charge income, and all of Seller's right to hold and
administer any related Escrows and the Records arising from or connected to any
of the servicing of the Mortgage Loans, as of the Sale Date.

         1.01.44 T & I means taxes and insurance.

         1.01.45 Transfer Date is defined in Section 2.05.

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                                   ARTICLE II

                        BASIC TERMS OF PURCHASE AND SALE

Section 2.01      Purchase and Sale

         2.01.01 Purchase, Sale and Assumption. Buyer hereby agrees to buy from
Seller and Seller hereby agrees to sell, transfer and assign to Buyer, in either
case at the Sale Date, all right, title and interest of Seller in and to the
Servicing Rights. Such sale shall be without recourse except as provided in this
Agreement. Buyer agrees to assume all obligations in connection with the
Servicing Rights arising on and after the Sale Date, subject to the approval of
FNMA prior to the applicable Transfer Date.

Section 2.02      Class I and Class II Mortgage Loans

         2.02.01 Class I Mortgage Loans are Mortgage Loans which, as of the Sale
Date, are neither (i) more than 60 days past due, (ii) Foreclosure Mortgages,
(iii) Bankruptcy Mortgages, (iv) in litigation (provided that this clause (iv)
shall not include Mortgage Loans which were in litigation on the Initial
Transfer Date, including the ARM Claim Mortgage Loans) (v) Mortgage Loans where
the properties, in the sole discretion of Buyer, require substantial repairs due
to natural disasters which occurred after the Initial Transfer Date, (vi)
Mortgage Loans subject to a payment plan with property tax authorities where the
Borrower is delinquent with respect to more than one payment required under such
payment plan, (vii) Mortgage Loans with respect to which the Borrower is
delinquent with respect to more than one installment of real property taxes or
(viii) Mortgage Loans which pay in full within 30 days after the applicable Sale
Date. Any Mortgage Loan described in (i), (ii), (iii), (iv), (v), (vi) and (vii)
above on the Sale Date and any Mortgage Loan which pays in full within such
30-day period, shall be deemed a Class II Mortgage Loan for purposes of this
Agreement. Buyer shall have no obligation to pay for the Servicing Rights to any
Class II Mortgage Loans; however, Servicing Rights with respect to Class II
Mortgage Loans shall be transferred to and accepted under and subject to all
terms of this Agreement. Buyer shall be entitled to a reduction in the Purchase
Price for the Servicing Rights with respect to a Mortgage Loan in the event such
Mortgage Loan pays in full on or before the expiration of the 30-day period
following the Sale Date.

Section 2.03      Purchase Price and Terms of Payments

         2.03.01 Purchase Price. The Purchase Price shall be the result of
multiplying 0.92% by the unpaid principal balance of all Class I Mortgage Loans
as defined in Section 2.02., subject to adjustment as described in Section 2.02,
Section 2.03.03 and Section 2.03.04. On the Business Day prior to the Sale Date,
the Purchase Price shall be estimated based upon the most recent available
information regarding the Mortgage Loans, Accounts Receivable and Escrow
Accounts (the "Estimated Purchase Price").

         2.03.02 Terms of Payment. The payment of the Purchase Price shall be as
follows:

(A) 20% of the Estimated Purchase Price shall be paid to Seller by wire transfer
of immediately available funds on the Sale Date.

(B) 70% of the Estimated Purchase Price shall be paid to Seller by wire transfer
of immediately available funds on or before the expiration of seven Business
Days after the Sale Date.

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(C) Any amounts (i) required to be paid by Buyer to Seller or by Seller to Buyer
as a result of the reconciliations described in Sections 2.03.03 and 2.03.04 or
(ii) required to be paid by Seller to Buyer in respect of a Mortgage Loan which
pays in full on or before the expiration of 30 days following the Sale Date, as
provided in Section 2.02.01, in either case, shall be paid at the times
prescribed in such sections.

(D) The remaining balance of the Purchase Price shall be paid to Seller by wire
transfer of immediately available funds in increments (i) on the third Business
Day after the delivery by Buyer of the schedule of the Document Exception
Mortgage Loans, in an amount equal to the amount by which the remaining balance
of the Purchase Price exceeds the product of $500.00 times the number of
Document Exception Mortgage Loans set forth on such schedule; (ii) on the
thirtieth day after the delivery by Buyer of the schedule of Document Exception
Mortgage Loans in an amount equal to $500.00 for each Document Exception
Mortgage Loan for which a complete Mortgage File has been received and accepted
as such by Buyer during the preceding 30-day period, and (iii) on the expiration
of each of two subsequent 30-day periods in an amount equal to $500.00 for each
Document Exception Mortgage Loan for which a complete Mortgage File has been
received and accepted as such by Buyer during the applicable 30-day period. If
all required documentation has not been received within 90 days after the
delivery of the schedule of Schedule of Document Exception Mortgage Loans
pursuant to Section 2.08.02, Purchaser shall be entitled to retain the portion
of the remaining Purchase Price held in accordance with this subparagraph (D).

         2.03.03 Verification of Estimated Purchase Price and Other Amounts to
be Transferred (a) As soon as possible, but no later than within five (5)
Business Days after the Sale Date, Seller shall determine with respect to the
Mortgage Loans as of the Sale Date from its books and Records and promptly
notify Buyer in writing of: (i) the aggregate outstanding principal balance of
all Mortgage Loans; (ii) the aggregate principal balance of all Class I Mortgage
Loans and Class II Mortgage Loans; (iii) the amount of all Accounts Receivable;
and (iv) the amount of Escrow Accounts. All such amounts shall be reconciled by
Seller to reports generated by the Seller's automated servicing system and to
reports made to the Investors and all such reports shall be sent to the Buyer
within five (5) Business Days after the Sale Date. Buyer shall notify Seller of
any discrepancies identified as a result of such reconciliation promptly, and in
any event within ten (10) Business Days of identification thereof. Any
adjustment to the Purchase Price arising as a result of such reconciliation
shall be promptly paid by Buyer to Seller, or by Seller to Buyer, as
appropriate.

         2.03.04 Verification of Purchase Price and Other Amounts Transferred
(a) As soon as possible, but no later than within five (5) Business Days after
the applicable Transfer Date, Seller shall determine with respect to the
Mortgage Loans as of the Cutoff Date immediately preceding the applicable
Transfer Date from its books and Records and promptly notify Buyer in writing
of: (i) the aggregate outstanding principal balance of all Mortgage Loans; (ii)
the aggregate principal balance of all Class II Mortgage Loans; (iii) the amount
of all Accounts Receivable; and (iv) the amount of Escrow Accounts. All such
amounts shall be reconciled by Seller to reports generated by Seller's automated
servicing system and to reports made to the Investors and all such reports and
reconcilements shall be sent to the Buyer within five (5) Business Days after
the applicable Transfer Date. Buyer shall notify Seller of any discrepancies
identified as a result of such reconciliation promptly, and in any event within
ten (10) Business Days of identification thereof. Any adjustment to the Purchase
Price arising as a result of such reconciliation shall be promptly paid by Buyer
to Seller, or by Seller to Buyer, as appropriate.

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Section 2.04      Sale Date

         2.04.01 The Sale Date shall be: with respect to the Buyer Owned
Mortgage Loans, July 1, 1999; and with respect to the Mortgage Loans in the FNMA
Pool, September 1, 1999 or, if the Transfer Date for the Mortgage Loans in the
FNMA Pool is extended pursuant to Section 2.05.01, to such date as so extended.
The Servicing Rights shall be transferred to Buyer on the applicable Sale Date
and Seller shall subservice the Mortgage Loans on behalf of Buyer, pursuant to
Section 3.01 below, from the Sale Date to the applicable Transfer Date.

Section 2.05      Transfer Date

         2.05.01 The applicable Transfer Date shall be the date on which the
Buyer assumes the physical servicing administration of the Mortgage Loans. The
Transfer Date shall be: with respect to the Buyer Owned Mortgage Loans, August
11, 1999; and with respect to the Mortgage Loans in the FNMA Pool, September 1,
1999; provided that in the event the conditions for transfer for such Mortgage
Loans have not been met by either such date, the applicable Transfer Date shall
be postponed at the option of Buyer until such conditions for transfer have been
satisfied, but not to exceed 60 days. On the applicable Transfer Date, Buyer
shall relieve Seller of its subservicing responsibilities for the Mortgage Loans
transferred on such Transfer Date. The latest date for the posting of
transactions by the Seller shall be the close of business July 31, 1999 for the
Buyer Owned Mortgage Loans and August 30, 1999 for the Mortgage Loans in the
FNMA Pool; provided that in the event the applicable Transfer Date is extended
in accordance with this Section 2.05.01, such transaction posting deadline shall
be extended a like number of days.

         2.05.02 On the applicable Transfer Date, Seller shall transfer to Buyer
or its designee tax service contracts relating to each Mortgage Loan (each of
which shall be a life-of-loan tax service contract), at no cost to Buyer.

         2.05.03 On the applicable Transfer Date, Seller shall transfer to Buyer
or its designee flood insurance contracts relating to each Mortgage Loan (each
of which shall be a life-of-loan flood insurance contract), at no cost to Buyer.

         2.05.04 On the applicable Transfer Date, Seller shall transfer to Buyer
all REO Property acquired in connection with liquidation of a loan which is or
was a Buyer Owned Mortgage Loan, except for any Pending Disposition REO
Property, together with any REO Account maintained in accordance with the
Servicing Agreement. On the applicable Transfer Date, Seller shall transfer all
REO Property acquired in connection with liquidation of a loan which is or was a
Mortgage Loan in the FNMA Pool, except any Pending Disposition REO Property,
together with any account maintained in accordance with FNMA requirements, to
the extent such treatment is consistent with FNMA requirements.

Section 2.06      Conditions of Sale

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         2.06.01 The obligations of Buyer hereunder shall be subject to the
satisfaction of the following conditions or Buyer's written waiver thereof:

(A) Delivery by Seller to Buyer of FNMA's written approval of the transfer of
Servicing Rights and responsibilities to Buyer prior to the applicable Transfer
Date;

(B) The material accuracy of all representations and warranties of Seller as of
the Sale Date and Transfer Date;

(C) Material compliance by Seller with all its obligations hereunder as of the
Sale Date and the applicable Transfer Date;

(D) Approval by FNMA to transfer the Servicing Rights to the Buyer as
contemplated herein;

(E) Seller shall have no knowledge of any litigation, legal or regulatory
proceeding pending, threatened or contemplated against the Seller which would
have a material adverse effect upon the related Servicing Agreements, the
Mortgage Loans, the Servicing Rights, or the transactions contemplated herein,
or the ability of the Seller to consummate the transaction contemplated herein
or to perform the obligations of the Seller under this Agreement as of the Sale
Date and the Transfer Date, except for such litigation, legal or regulatory
proceedings which (i) were in existence on the Initial Transfer Date or, (ii)
relate to an ARM Claim;

(F) Prior to Sale Date, Buyer's receipt of the resolution of the Board of
Directors of the Seller acceptable to Buyer approving the execution of the
delivery and performance of this Agreement certified by the Secretary or an
Assistant Secretary of the Seller; and

(G) Approval of the OTS or any other regulatory agency having jurisdiction over
the Buyer.

Buyer's election to close the transaction contemplated herein shall not be
deemed to constitute a waiver of any inaccuracy of any representation or
warranty or of any noncompliance by Seller of any of its obligations under this
Agreement.

         2.06.02 The obligations of Seller hereunder shall be subject to the
satisfaction of each of the following conditions or Seller's written waiver
thereof:

(A) The material accuracy of all representations and warranties of Buyer as of
the Sale Date and Transfer Date;

(B) Material compliance by Buyer with all its obligations hereunder as of the
Sale Date and the applicable Transfer Date; and

(C) Approval by FNMA to transfer the Servicing Rights to the Buyer as
contemplated herein.

         2.06.03 In the event of the failure of any condition set forth in
Section 2.06.01 or Section 2.06.02 prior to the applicable Transfer Date, after
notice and a 15-day period during which Seller or Buyer, as applicable shall
have the right to cure such failure, Buyer, with respect to the failure of any
condition set forth in Section 2.06.01 and Seller, with respect to the failure
of any condition set forth in Section 2.06.02, may elect to cancel and terminate
this Agreement and forthwith receive refund of all sums paid to Seller together

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with per diem interest at the average Federal Funds Rate as published in the
Wall Street Journal during the period from payment by the Buyer through refund
to the Buyer, and subservicing fees paid to Seller less any servicing fees
actually remitted to Buyer in accordance with 3.01 from the date such funds were
deposited with Seller through the date of cancellation or termination; provided,
that in the event of the failure of the condition set forth in Section
2.06.01(A) or Section 2.06.02(C), Buyer or Seller shall be entitled to terminate
this Agreement solely with respect to Mortgage Loans owned by the nonconsenting
Investor.

Section 2.07      Division of Costs

         2.07.01 Seller shall pay all costs incurred by Seller in the
performance of its obligations under this Agreement, including but not limited
to fees for Seller's attorneys, accountants, Seller's computer service and
related costs. Seller shall pay the applicable Investor transfer fee(s) for the
Mortgage Loans transferred to the Buyer. Seller shall prepare individual
assignments and interim or intervening assignments as required on each of the
Mortgage Loans to complete the chain of title to the Buyer and/or Investor as
applicable and as required by Investor guidelines, regulations or requirements,
or state or federal law. Seller shall record all such assignments, if necessary,
except those from Buyer to Investor, and deliver all unrecorded assignments to
Buyer, within five (5) business days after the applicable Transfer Date, at its
own expense. Prior to the expiration of five (5) business days after the
applicable Transfer Date the Seller will deliver to the Buyer the Seller's
certification that such assignments have been prepared as provided herein and
mailed for recording and Seller shall deliver copies of such assignments sent
for recording to the Buyer. All assignments sent for recording or copies thereof
sent to Buyer shall contain the Seller's and Buyer's loan numbers. Substitutions
of trustee, if necessary, are to be prepared and recorded on each individual
loan, in each respective county at Seller's expense. On Buyer Owned Mortgage
Loans, a Power of Attorney will be provided to Buyer to allow Buyer to execute
all necessary documents to process foreclosures and or documents to discharge
the lien and or any other documents needed to service the Mortgage Loans
pursuant to the Agreement.

         2.07.02 Buyer shall pay all costs incurred by Buyer in the performance
of its obligations under this Agreement including but not limited to fees for
Buyer's attorneys, accountants, Buyer's computer services, and related costs.

Section 2.08      Transportation Costs

         2.08.01 Seller shall pay for all costs associated with the shipment of
all Records and Mortgage Loan Files required to be transferred to Buyer or
Buyer's Custodian hereunder. Seller shall bear the risk of loss during transit
until such Records and files are received by the Buyer, or Buyer's Custodian.

Section 2.09 Document Exception Mortgage Loans. Within 90 calendar days from the
applicable Transfer Date, Buyer shall transmit to Seller a schedule of Mortgage
Loans with respect to which the Mortgage File does not contain all of the
documents required by Exhibit B (the "Document Exception Mortgage Loans").

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Section 2.10 Provisions relating to Initial Sale Agreement. With respect to a
Mortgage Loan, on and after the applicable Transfer Date, any continuing
obligation of any party as to such Mortgage Loan shall terminate; provided,
however, that except as specified herein, the Initial Sale Agreement, including
without limitation the provisions of Section 5.01.02 of the Initial Sale
Agreement, shall continue in full force and effect. On and after the applicable
Transfer Date, Seller agrees to transfer to Buyer all right, title and interest
in and to the funds held by FNMA on behalf of Buyer under that certain
Investment Agreement, as defined in the Sale Agreement Amendment. Buyer agrees
to cooperate with Seller in connection with the termination or assignment of
that certain Credit Enhancement Maintenance Agreement between Seller and FNMA.

Section 2.11 Provisions relating to Servicing Agreement. With respect to a Buyer
Owned Mortgage Loan, on and after the Transfer Date relating to Buyer Owned
Mortgage Loans, any continuing obligation of any party as to such Mortgage Loan
shall terminate. Seller shall continue to be obligated to deal with any REO
Property or Mortgage Loans not transferred to Buyer in accordance with the
Servicing Agreement on and after such Transfer Date.

Section 2.12 Resolution of Preexisting Dispute. The Parties acknowledge the
existence of a dispute relating to Loan No 97873 (Campos). Buyer contends that
Seller was deficient in the performance of its obligations under the Servicing
Agreement with respect to such loan, and Buyer unilaterally asserted a setoff
against servicing cost reimbursements to compensate itself for the damages it
alleged it suffered on account of the alleged deficient performance. Seller
denies that its performance was deficient or that Buyer suffered any damages.
The parties hereby agree to settle and compromise all of their disputes and
release each other from all claims relating to the servicing of this loan and
the offset. As settlement in full of all such disputes, and as an accord and
satisfaction with respect thereto, Buyer shall pay to Seller, on the Sale Date
with respect to the Buyer Owned Mortgage Loans, the sum of $14,000.

                                  ARTICLE III

                              COVENANTS OF SERVICER

Section 3.01 Servicing Duties Prior to and Subsequent to Transfer Date. (a)
Seller shall subservice for Buyer, during the Interim Period, the Buyer Owned
Mortgage Loans in accordance with the provisions of the Servicing Agreement
(except as provided herein), applicable laws and regulations, and generally
accepted prudent servicing standards. Notwithstanding anything to the contrary
in the Servicing Agreement, Seller shall be entitled to a subservicing fee for
such subservicing activities in an amount of $6.00 per loan per month (the
"Subservicing Fee"). Buyer shall be entitled to Servicing Fees as provided in
the Servicing Agreement on a pro-rata basis for the portion of the month prior
to and including a Transfer Date, and shall be entitled to Subservicing Fees as
provided herein on a pro-rata basis for the portion of the month following a
Transfer Date. Such proration shall be computed on the basis of the outstanding
balance of the Mortgage Loans transferred on the applicable Transfer Date (with
respect to the Servicing Fee) and the last Business Day of the month (with
respect to the Subservicing Fee), the number of days prior to and including such
Transfer Date (with respect to the Servicing Fee) or after such Transfer Date
and prior to and including the end of such month (with respect to the
Subservicing Fee), and the total number of days in such month.

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         (b) Seller shall continue to service in accordance with the relevant
provisions of the Servicing Agreement, and for no compensation all Pending Sale
Foreclosure Mortgages on and after the Transfer Date until such time as such
Pending Sale Foreclosure Mortgages are acquired as REO Property. Thereafter,
Seller shall transfer such REO Property to Seller.

         (c) Seller shall administer and manage all Pending Disposition REO
Property in accordance with the relevant provisions of the Servicing Agreement
and for no compensation until such Pending Disposition REO Property is disposed,
at which time the net proceeds of such disposition shall be remitted to Buyer.

         (d) Buyer shall reimburse Seller for all servicing advances made prior
to the applicable Transfer Date and not previously reimbursed within 30 days
after submission of documentation relating to such advance.

Section 3.02      Transfer of Records.

         3.02.01 At its sole expense, Seller shall deliver to Buyer all
documents, files, reports and similar items as set forth in Exhibit B attached
hereto organized in loan number order. All Mortgage Loan Files and microfiche
jackets must be delivered to Buyer's office no later than the fifth (5th)
Business Day after the applicable Transfer Date. Mortgage Loan Files shall be
delivered to:

                  Fidelity Federal Bank, a Federal Savings Bank
                  4565 Colorado Boulevard
                  Los Angeles, CA  90039
                  Attn:  Robert Dalton

         3.02.02 All custodial files held by the Seller's Custodian shall be
delivered to the office of Buyer's Custodian, or as otherwise directed by the
Buyer, within five (5) Business Days after the Transfer Date.

         3.02.03 Custodial files for FNMA shall be delivered to: Same.

Section 3.03      Payments and Notices Received After Transfer Date

         3.03.01 Seller and Buyer acknowledge that, during the 90-day period
after the applicable Transfer Date, all correspondence and funds received by
Seller in connection with the Mortgage Loans, including, but not limited to, tax
bills, insurance premiums, principal, interest, mortgage guaranty or mortgage
insurance payment bills, insurance loss drafts, tax refunds and all other types
of payments, are to be immediately paid over to the Buyer without offset or
deduction. Buyer shall be entitled to the Servicing Fees and other
servicing-related income on all such payments. During the first 60-day period
such correspondence and funds shall be identified by the Seller by the Seller's
loan numbers and shall be immediately delivered to the Buyer at the Seller's
expense by overnight courier, for next Business Day delivery, at the address for
notice to Buyer. During the ensuing 30-day period, Seller shall use regular mail
to make such delivery to Buyer. In addition, the Seller shall deliver or cause
to be delivered to the Buyer, as promptly as practicable after receipt by the
Seller, copies of all correspondence received from any Borrower or otherwise
relating to the Mortgage Loans. Following such 90-day period, all such funds and

                                       11
<PAGE>

correspondence shall be returned by Seller to the sender with a letter of
explanation, a copy of which letter shall be sent to the Buyer. Funds accepted
by Seller shall be forwarded to Buyer with a letter of explanation.

Section 3.04      Service Bureau Cooperation

         3.04.01 The Seller and Buyer will timely cooperate, and will use
commercially reasonable efforts to cause their respective service bureaus to
timely cooperate, with each other and their respective service bureaus, such
cooperation shall include without limitation the identification by Seller of its
user-defined codes. Seller shall deliver or cause to be delivered a test tape,
trial tape and an accurate conversion tape at the request of the Buyer. Seller
will provide or cause to be provided a written report of all such reports,
computer file layouts, and definitions as needed to facilitate automated
transfer, which may be reasonably requested. Costs incurred by the Seller in the
performance of these aforementioned requirements will be borne by the Seller.

Section 3.05      Investor Approvals and Costs

         3.05.01 Prior to the applicable Transfer Date, Seller shall have
secured and delivered to the Buyer, the written applicable FNMA approvals,
satisfactory to Buyer, to transfer the Servicing Rights contemplated hereunder,
together with all requisite approvals for the transfer of custodial and trust
documentation and funds (i.e., P&I and T&I) to Buyer.

         3.05.02 Seller will satisfy all FNMA requirements to transfer
effectively the Servicing Rights from Seller to Buyer and pay and bear any and
all fees imposed by FNMA to effect the transfer.

Section 3.06      Year-End Reporting

         3.06.01 Seller shall be responsible for all government and regulatory
reporting pertaining to servicing activities prior to the applicable Transfer
Date, including but not limited to all 1999 year-end Statements to the
Mortgagors and to government agencies, such as Form 1099s, 1098s, K-1s and HMDA
reporting. Buyer shall be responsible for all such reporting pertaining to
servicing activities after the applicable Transfer Date.

Section 3.07      Interest on Escrow

         3.07.01 Seller shall indemnify and hold Buyer harmless from any and all
claims, damages, costs and/or liabilities arising out of or in connection with
Seller's obligations to pay interest on Escrow Accounts from the Initial
Transfer Date to the applicable Transfer Date. At Seller's election, Seller
shall post or cause to be posted accrued interest on each Escrow Account to the
Borrower's account up to and including the Business Day prior to the applicable
Transfer Date. In the event Seller does not elect to post interest on each
Escrow Account in accordance with the preceding sentence, then, within five (5)
business days after the applicable Transfer Date, Seller shall remit to Buyer a
sum equal to the interest accrued on impounds as of the Sale Date along with
reports separately detailing the accrued but unpaid interest as of the Sale Date
and as of such Transfer Date.

                                       12
<PAGE>

Section 3.08      Notification to Mortgagors

         3.08.01 No later than 15 days prior to the applicable Transfer Date,
Seller shall mail to all Mortgagors, at Seller's cost and expense, a notice
advising them of the occurrence of the transfer contemplated hereby and when and
where to make payments on and after such Transfer Date and such other
disclosures as required by Investor or federal or state law. The letter
effecting such notification shall be reviewed and accepted by Buyer prior to
mailing to Mortgagors. In any event, such notification will be in compliance
with all Investor, federal and state requirements. Buyer shall at its own
expense, within the time period provided by applicable federal or state law,
provide such notification required to be given by Buyer with respect to the
transfer of Servicing Rights pursuant to this Agreement.

Section 3.09      Notification to Insurance Carriers

         3.09.01 Seller shall mail a notice to all appropriate insurance
companies, with respect to the property securing each Mortgage Loan, of the
occurrence of the transfer contemplated hereby and request the following:

                  a. The fire and extended coverage policy with respect to the
property securing each Mortgage Loan shall name Buyer, its successors and
assigns, as mortgagee;

                  b. The Private Mortgage Insurance companies and optional
insurance companies Records shall reflect Buyer as servicer of the Mortgage
Loans; and

                  c. Any flood insurance or hazard insurance policy, with
respect to the property securing each Mortgage Loan, shall name Buyer, its
successors and assigns as an insured and contain a lender's loss payable
endorsement in favor of Buyer, its successors and assigns.

Section 3.10      Payment of Property Insurance and Mortgage Insurance Premiums

         3.10.01 Seller shall pay, or cause to be paid, prior to the applicable
Transfer Date, all property and mortgage insurance premiums due prior to and
including such Transfer Date and those due 30 days after such Transfer Date for
any Mortgage Loan as to which an escrow or impound account has been established
and shall use its reasonable best efforts, consistent with any obligations under
the Servicing Agreement, to cause the payment of such premiums with respect to
any other Mortgage Loan. On the applicable Transfer Date, Seller shall provide
to Buyer a list of those loans on which insurance premiums are due but, despite
Seller's best efforts, it has been unable to pay due to non receipt of premium
billing or for other reasons outside of Sellers control. Seller agrees to
forward to Buyer within three (3) Business Days of receipt all such insurance
bills received by Seller. Seller shall use its reasonable best efforts,
consistent with any obligations under the Servicing Agreement, to cause all
policies of property and other insurance which have been force-placed by Seller
to be transferred to Buyer.

Section 3.11      Payment of Property Taxes

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<PAGE>

         3.11.01 Seller shall pay, or cause to be paid, on all impounded loans,
prior to the applicable Transfer Date, all real estate tax bills issued by the
jurisdictions (including all interest, late payments and penalties in connection
therewith) that are due to each taxing authority and relating to the property
securing the Mortgage Loan, and shall use its reasonable best efforts,
consistent with any obligations under the Servicing Agreement, to cause such
real estate tax bills to be paid by the applicable Borrower on nonimpounded
Mortgage Loans, prior to the applicable Transfer Date. Set forth on Schedule
3.11 is a list of all Mortgage Loans with delinquent taxes, setting forth the
amount thereof and whether an impound has been established with respect to such
Mortgage Loan. Seller agrees to forward to Buyer within three (3) Business Days
of receipt thereof of all tax bills received by the Seller.

         3.11.02 Seller shall forward to Buyer, within three (3) Business Days
after Seller's receipt thereof, all property tax bills received by Seller
relating to the Mortgage Loans and which are due more than thirty (30) days
after the applicable Transfer Date.

         3.11.03 For the first sixty days following the applicable Transfer
Date, such delivery shall be made by overnight express service and shall be
delivered to the address referenced in Section 3.03.01.

         3.11.04 Seller will insure that all tax identification information for
each Mortgage Loan is maintained on Seller's servicing system to allow the
automated transfer of such data on the applicable Transfer Date.

         3.11.05 Seller will load all available hazard insurance policy numbers
in a manner that will allow automated transfer of such data on the applicable
Transfer Date.

         3.11.06 Seller shall load all PMI Certificate numbers on Seller's
servicing system to allow the automated transfer of such data on the applicable
Transfer Date.

         3.11.07 Seller, prior to the applicable Transfer Date, shall correctly
code all conventional insured loans on its system to allow the automated
transfer of such data on the applicable Transfer Date.

         3.11.08 Seller shall insure that the appraisal values maintained on its
system are accurate, as of the date of the last appraisal, prior to the
applicable Transfer Date.

         3.11.09 Seller shall cause Fidelity Tax Service to perform an audit
with respect to all Mortgage Loans to determine if there are any unpaid taxes
outstanding as of the applicable Transfer Date (or the most recent practicable
date prior thereto to the extent county tax records do not permit such an audit
to be conducted as of such Transfer Date), and issue a certification to Buyer
stating all taxes due have been paid, or list all such outstanding taxes due
with explanations of why the taxes are not paid.

         3.11.10 On or before the applicable Transfer Date, Seller shall cause
Seller's tax service to provide Buyer's tax service with all necessary data to
facilitate the transfer of service without cost to Buyer.[resolution of
life-of-loan issue to be discussed]

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<PAGE>

Section 3.12      Assumptions

         3.12.01 Simultaneously with the delivery of the Mortgage Loan Files
after the applicable Transfer Date, Seller shall deliver to Buyer a list of
Mortgage Loans on which Seller has received written notice of pending
assumptions. Such list shall include the assuming Mortgagor's name and social
security number, Seller's Mortgage Loan number, and, if any, the name and social
security number of co-borrowers. Additionally, Seller shall provide to Buyer
copies of any assumption instructions Seller has issued.

Section 3.13      Solicitation Rights of Buyer and Seller Solicitation
                  Prohibition

         3.13.01 From and after the Sale Date, Buyer and any of its affiliates,
have the unconditional right to directly or indirectly solicit, by means of
direct mail, telephonic or personal solicitation, or otherwise, the Borrower
with respect to any of the Mortgage Loans subject to this Agreement, for
purposes of prepayment, refinance, modification of such Mortgage Loans, optional
insurance or for any related or other types of products or services offered by
Buyer or any of its affiliates, for the life of such Mortgage Loans.

         3.13.02 From and after the date of this Agreement, Seller, its agents
and affiliates, shall not directly or indirectly, solicit, for themselves or for
any other party, and Seller shall exercise reasonable efforts to prevent any of
its agents and affiliates from directly or indirectly soliciting, by means of
direct mail, telephonic, personal solicitation, or otherwise, the Borrowers with
respect to any of the Mortgage Loans subject to this Agreement, for purposes of
prepayment, refinance, or modification of such Mortgage Loans, optional
insurance or for any related or other types of products or services offered by
Seller or any of its affiliates or agents, for the life of such Mortgage Loans.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by Seller or any affiliate of Seller which are directed at the
general public at large or to Seller's depositors and other non-mortgage
customers, including without limitation mass-mailings based on commercially
acquired mailing lists, and newspaper, radio and television, internet and web
page advertisements, shall not constitute solicitation under this section.

Section 3.14      Powers of Attorney

         3.14.01 Seller shall endorse to Buyer, on and after the Transfer Date,
Mortgage Loan Payment checks, loss draft checks relating to Mortgage Loans and
similar items. On the Transfer Date, Seller shall deliver to Buyer a special
power of attorney, in a form satisfactory to Buyer and its counsel, empowering
Buyer to endorse in the name of Seller, Mortgage Loan payment checks, loss draft
checks relating to Mortgage Loans, and similar items to Buyer. Such power of
attorney shall be solely for use in the event Seller inadvertently fails to
endorse an item over to Buyer. Such power of attorney shall expire on December
31, 1999.

Section 3.15      Escrow and Escrow Analysis

         3.15.01 All negative escrow or impound balances will be researched and
analyzed prior to transfer and shall be reported to Buyer. Seller shall, at its
own cost and expense, provide short-year statements in compliance with RESPA and
shall furnish a copy of each such short-year statement to Buyer. Seller
acknowledges that Buyer will rely upon such short-year statement in connection
with its escrow accounting activities with respect to the Mortgage Loans and
agrees that such short-year statements will be true and correct in all material
respects.

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<PAGE>

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

Section 4.01      General Representation and Warranties of Seller

         4.01.01 Seller hereby represents and warrants that as of the Sale Date
and as of the applicable Transfer Date:

         4.01.02 Seller is duly organized and validly existing as a federally
chartered savings association, with full corporate authority to enter into and
perform its obligations under this Agreement.

         4.01.03 This Agreement has been duly authorized by all requisite
corporate action of Seller and is a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to laws
respecting bankruptcy, receivership, insolvency and other laws affecting
creditors' rights generally and the rights of creditors of federally insured
financial institutions, and further subject to limitations on the availability
of equitable remedies.

         4.01.04 Seller owns the Servicing Rights, and has the power to transfer
the Servicing Rights free and clear of any claim, lien, encumbrance or charge,
subject to any approval rights of FNMA or any Investor, and is aware of no
adverse claims to or encumbrances on such rights. Seller has the sole right and
authority to sell the Servicing Rights to Buyer and is not contractually or
otherwise obligated to sell the Servicing Rights to any other party. Neither the
Mortgage Loans nor the Servicing Rights are hypothecated, assigned or pledged as
collateral for any obligations of Seller.

         4.01.05 Neither the execution of this Agreement nor the consummation of
the transactions contemplated herein constitutes a violation of Seller's charter
or bylaws, is a breach of or constitutes an event of default under, or conflicts
with any contract, loan agreement, indenture, mortgage or other undertaking to
which Seller is subject, nor violates any outstanding judgment, order,
injunction, law, rule or regulations to which Seller is subject or by which it
or its properties may be bound.

         4.01.06 No authorization, approval or consent of or declaration of
filing including, but not limited to, any filing required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with any
governmental authority or regulatory body, Federal, State or local, is necessary
or required of the Seller in connection with the execution and delivery of this
Agreement or the performance by the Seller, except approval from the Investor
for the transfer of the Servicing Rights to the Buyer.

         4.01.07 The Seller has not, and has not permitted any third party to,
solicit the Borrowers for refinancing of the Mortgage Loans within 90 days prior
to the date of this Agreement; PROVIDED, that general mass media solicitations,
including through the media of television, radio, internet, web page or print
advertisements not targeted to such Borrowers shall not constitute a breach or
exception to the foregoing representation and warranty.

                                       16
<PAGE>

Section 4.02 Representations and Warranties of Seller Relating to the Pools and
Servicing Rights: Seller represents and warrants that as of the date hereof and
as of the Sale Date:

         4.02.01 Seller is duly and validly authorized to sell, assign and
transfer the Servicing Rights, and the sale is be in compliance with all laws,
regulations and guidelines under which Seller operates, subject to approval of
such transfer by the Investors on or prior to the applicable Transfer Date.

         4.02.02 Except for any such contract entered into with FNMA, the Seller
has not entered into any contract affecting the Servicing Rights which is or
will be binding to Buyer.

Section 4.03 Representations and Warranties of Seller Relating to the Servicing
of the Mortgage Loans: Seller represents and warrants that as of the Sale Date
and the Transfer Date, provided that any representation or warranty that relates
to any event prior to the Sale Date or Transfer Date shall be deemed to be
limited to that period of time commencing on the Initial Transfer Date and
ending on the Sale Date or Transfer Date, as applicable:

         4.03.01 (i) The unpaid balances of the Mortgage Loans are as stated on
Exhibit A. All payments received by Seller with respect to any Mortgage Loan
have been remitted and properly accounted for as required by the Investors.

                  (ii) No payment of principal or interest on any such Mortgage
  Loan has been forgiven, suspended or rescheduled except as disclosed in
  writing to Buyer and no waiver, alteration or modification has been made to
  the terms or provisions of such Mortgage Loans except as allowed by Investor
  guidelines, regulations or requirements.

         4.03.02 There are no actions, claims, litigation, lawsuits or
governmental investigations pending or, to the knowledge of the Seller,
threatened that relate to the Servicing Rights, the Mortgage Loans or any of
them, other than usual and customary actions such as foreclosure proceedings and
the ARM Claims.

         4.03.03 Seller has and will keep in full force and effect an errors and
omissions policy with respect to its servicing operations and a financial
institution's fidelity blanket bond in an amount sufficient to comply with
Investor guidelines. Such policies shall be maintained for a period of no less
than one year subsequent to any Transfer Date.

         4.03.04 There is in force with respect to mortgaged property subject to
any Mortgage Loan, (i) a hazard insurance policy issued by an insurance carrier,
which provides at a minimum for fire and extended coverage in an amount not less
than the outstanding principal balance of the Mortgage Loan or guaranteed
replacement value of improvements, whichever is less, and, conforms with
Investor guidelines and applicable statutes and (ii) if required by the flood
Disaster Protection Act of 1973, a flood insurance policy in an amount
representing coverage not less than the lesser of: (1) the outstanding principal
balance, or (2) the maximum amount of insurance which is available under such
Act.

                                       17
<PAGE>

         4.03.05 The Accounts Receivable are valid and existing accounts owing
to Seller, and are carried on the books of Seller at values determined in
accordance with generally accepted accounting principles, and are not subject to
any setoffs or claims of the account debtor arising from acts or omissions of,
or otherwise known to, Seller.

         4.03.06 The Seller will, at the applicable Transfer Date, provide a
report satisfactory in form and content to the Buyer to substantiate compliance
with Internal Revenue Service and other applicable U.S. Treasury Department
regulations and requirements applicable to reporting of interest and obtaining
Social Security numbers. The Seller also agrees to provide the certification of
an authorized officer of the Seller certifying that the Seller has complied with
all Internal Revenue Service and U.S. Treasury Department requirements for due
diligence in obtaining and maintaining tax identification numbers for each
Mortgage Loan. In addition to the foregoing, the Seller agrees to reimburse the
Buyer for any and all penalties and/or costs incurred because of Internal
Revenue Service and/or U.S. Treasury Department requirements for any missing tax
identification numbers and forms incurred as a result of infractions which
occurred prior to the applicable Transfer Date.

         4.03.07 All Investor Pools have been properly certified and/or
recertified as required by Investor requirements and otherwise comply with all
Investor requirements and regulations.

Section 4.04 Representations and Warranties Relating to Mortgage Loans. Seller
represents and warrants that as of the Sale Date and Transfer Date, provided
that any representation or warranty that relates to any event prior to the Sale
Date or Transfer Date shall be deemed to be limited to that period of time
commencing on the Initial Transfer Date and ending on the Sale Date or Transfer
Date, as applicable:

         4.04.01 Seller has received no notice as to any Mortgage Loan (i) that
the Mortgage Note and the related Mortgage are not genuine or are not a legal,
valid and binding obligation of the maker thereof, enforceable in accordance
with its terms; (ii) that any party to the Mortgage Note and the Mortgage did
not have legal capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage have been duly and properly executed by such parties,
and is properly assigned in the name of the Investor.

         4.04.02 The terms of each Mortgage Note and Mortgage have not been
modified, no party thereto has been released in whole or in part and no part of
the mortgaged property has been released unless approved by the Investor, if
required.

         4.04.03 To Seller's knowledge there are no uninsured casualty losses or
casualty losses, where coinsurance has been, or Seller has reason to believe it
will be, claimed by the insurance company or where the loss, exclusive of
contents, is greater than the net recovery from the hazard insurance carrier. No
casualty insurance proceeds have been used to reduce Mortgage Loan balances or
for any other purposes except to make repairs to the mortgaged premises or as
otherwise allowed by the Investor. All damages with respect to which casualty
insurance proceeds have been received by or through Seller have been properly
repaired or are in the process of such repair with such proceeds in accordance
with Investor requirements, regulations and guidelines.

                                       18
<PAGE>

         4.04.04 All other documentation with respect to the Mortgage Loans has
been properly and accurately completed and executed and all documents required
by the Investor and necessary to service the Mortgage Loans are in Mortgage Loan
Files or such documentation is held in the Seller's Pool custodial files held by
the Seller's document custodian.

         4.04.05 The PMI premiums, if applicable, have been paid. Seller has not
acted or failed to act in any manner, the effect of which with respect to each
Mortgage Loan would be to invalidate the contract of insurance or guarantee with
the PMI carriers.

         4.04.06 Each Mortgage Loan meets, or is exempt from, applicable state
or federal laws, regulations and other requirements pertaining to usury and no
Mortgage Loan is usurious.

         4.04.07 Seller has no knowledge of damage to the property securing a
Mortgage Loan by fire, windstorm or other casualty, or any other circumstances
or conditions which would cause any Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loans. If timely
repair is presently being undertaken with casualty insurance proceeds or an
insurance claim is being processed with the appropriate insurance company, no
breach of this warranty shall occur provided the repaired property securing a
Mortgage Loan is restored to substantially the same condition it was in prior to
the casualty.

         4.04.08 Seller and Buyer acknowledge that Buyer, as seller and investor
under the Initial Sale Agreement, instructed Seller, as buyer and servicer under
the Initial Sale Agreement, to service the ARM Claim Mortgage Loans
substantially in the same manner as Buyer, as seller and investor under the
Initial Sale Agreement, did prior to the Initial Transfer Date, and that
compliance with the requirements of this Section 4.04.08 and Sections 4.04.13
and 4.04.17, to the extent of those instructions, is the responsibility of
Buyer. Except as provided in the previous sentence, to Mortgage Loan has been
serviced in violation of (a) any applicable federal or state law or regulation,
or (b) the rules, regulations or requirements of (i) any regulatory agency
having jurisdiction over Seller or (ii) any insurance company in any way
associated with any Mortgage Loan, the effect of which violation, (1) would
impair, invalidate or reduce (i) any Investor approvals, (ii) any private
insurer (iii) any title insurance policy, (iv) any hazard insurance policy, (v)
any flood insurance policy required by the National Flood Insurance Act of 1968
as amended, (vi) any tax liens or assessment or (vii) any fidelity bond direct
surety bond or errors and omissions insurance required by FNMA and private
mortgage insurer, or any investor; or (2) would result in a breach of a
representation or warranty made by Seller to Buyer or its successors and assigns
hereunder or made by Seller to any Investor; or (3) would result in Buyer, or
its permitted assigns, having to repurchase or incur curtailment of full
reimbursement or enter into any form of indemnification agreement with respect
to such Mortgage Loan, or pay a fine.

         4.04.09 Seller has properly conducted an escrow analysis for each
Mortgage Loan during the preceding twelve month period ending on the applicable
Transfer Date in compliance with federal, state and RESPA regulations. All books
and conditions with respect to each Mortgage Loan are in good condition and
shall have been adjusted to reflect properly the results of the escrow analysis.
Seller shall have delivered notification to the Mortgagor under each Mortgage
Loan of all payment adjustments resulting from such escrow analysis.

         4.04.10 Seller has not been informed that any property subject to a
Mortgage has been or will be condemned, except if such condemnation will not
have a material adverse effect on the value of such property or its status as
security for a Mortgage Loan.

                                       19
<PAGE>

         4.04.11 All documents submitted, to the extent generated after the
Initial Transfer Date, are genuine, and all other representations as to each
such Mortgage Loan are true and correct and meet the requirements and
specifications of all parts of this Agreement.

         4.04.12 Seller represents that to the best of its knowledge as of the
applicable Transfer Date there are no properties securing mortgage Loans subject
to this Agreement which are subject to any homeowner's assessment which impairs
or could impair the first lien priority on such properties.

         4.04.13 All Mortgage Loans have been properly serviced in all material
respects in accordance with Investor guidelines, regulations and requirements.

         4.04.14 Where applicable law requires the payment of interest on Escrow
Accounts, all such interest has been properly accrued and credited.

         4.04.15 To the best of Seller's knowledge, each Mortgage Loan that may
have been damaged due to earthquake, flood, fire or other natural disaster has
been fully repaired and restored, each loan file will have documentation to
substantiate required major repairs.

         4.04.16 Each Mortgage Loan has in effect a lender's policy of title
insurance that extends coverage to its successors and assigns as additional
named insured of said policy of title insurance running for the benefit of the
Seller, its successors or assigns, and to Seller's knowledge, no event has
occurred which would have the effect of invalidating such title insurance
policy.

         4.04.17 All interest rate adjustments with respect to adjustable rate
mortgage loans, including those which have converted to fixed rate mortgage
loans, including periodic adjustments and the conversion adjustment, have been
(a) calculated properly; and (b) made in accordance with (i) the terms of the
related Mortgage Note and (ii) applicable law.

Section 4.05      Representations and Warranties of Buyer

         4.05.01 Buyer hereby represents and warrants as follows:

         4.05.02 Buyer is duly organized and validly existing as a federally
chartered savings institution, with full corporate authority to enter into and
perform its obligations under this Agreement.

         4.05.03 This Agreement has been duly authorized by all requisite
corporate action of Buyer and is a legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to laws
respecting bankruptcy, receivership, insolvency and other laws affecting
creditors' rights generally and the rights of creditors of federally insured
financial institutions, and further subject to limitations on the availability
of equitable remedies.

         4.05.04 Neither the execution of this Agreement nor the consummation of
the transactions contemplated herein constitutes a violation of Buyer's charter
or bylaws, is a breach of or constitutes an event of default under, or conflicts
with any contract, loan agreement, indenture, mortgage or other undertaking to
which Buyer is subject, nor violates any outstanding judgment, order,
injunction, law, rule or regulations to which Seller is subject or by which it
or its properties may be bound.

                                       20
<PAGE>

         4.05.05 There is no litigation, legal proceedings, or regulatory
actions pending, or threatened against the Buyer which can reasonably be
expected to have a material adverse effect upon this Agreement, or the
transaction contemplated hereunder, or Buyer's ability to perform its
obligations hereunder.

         4.05.06 No authorization, approval or consent of, or declaration of
filing including, but not limited to, any filing required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with any
governmental authority or regulatory body, federal, state or local, is necessary
or required of Buyer in connection with the execution and delivery of this
Agreement or the performance by Buyer hereunder, except approval from FNMA for
the transfer of the Servicing Rights to Buyer and any required approval of the
OTS.

Section 4.06      Survival

         4.06.01 All representations and warranties contained herein, and all
rights of the parties arising hereunder, shall remain in force for the life of
each Mortgage Loan and for one (1) year thereafter relative to the Mortgage
Loans, Mortgage Documents and Mortgage Loan files, and for a period of ten (10)
years after Transfer Date(s) relative to the servicing of the Mortgage Loans.
Notwithstanding the foregoing, the indemnification obligation of Buyer under
Section 5.02.01 of the Initial Sale Agreement shall survive for the period
provided therein.

                                   ARTICLE V

Section 5.01      Indemnification of Buyer by Seller

         5.01.01 Seller hereby agrees to defend and indemnify and hold Buyer,
and Buyer's stockholders, directors, officers and employees, harmless, against
any claim, cause of action, suit, proceeding or demand, and any and all losses,
liabilities, costs and expenses of any nature whatsoever associated therewith
("Buyer's Claims") arising out of, or in connection with, directly or
indirectly, any breach of any representation or warranty or any other obligation
of Seller under this Agreement or the Servicing Agreement or otherwise,
resulting from any state of facts and or conditions existing (i) on or before
the applicable Transfer Date but after the Initial Transfer Date and (ii) on or
after the applicable Transfer Date as to the Pending Sale Foreclosure Mortgages
and the Pending Disposition REO Property involving the Servicing Rights,
Mortgage Loans, Pools, Pending Sale Foreclosure Mortgages and REO Property,
including without limitation the Pending Disposition REO Property subject to
this Agreement, including but not limited to:

(A) In the event any Investor requests or demands repurchase of any Mortgage
Loan and/or the Servicing Rights to which are transferred under this Agreement,
for any reason, or requires Buyer to indemnify such Investor with respect to a
Mortgage Loan, Seller shall indemnify and hold Buyer harmless and make Buyer
whole pursuant to any such repurchase and indemnity required or demanded by
Investor. This shall include, but is not limited to Seller agreeing upon Buyer's
demand to repurchase any Mortgage Loan and Repurchase the Servicing Rights where
there occurred fraud by the Borrower, Mortgagor, or any other party, whether or


                                       21
<PAGE>

not Seller had reason to believe or know that such fraud occurred or existed;
provided, however that notwithstanding the foregoing, Buyer's Claims involving
misrepresentations, breach of warranty or nonfulfillment of any agreement, duty
or obligation of Seller involving the Pools, Mortgage, Mortgage Loans, or this
Agreement and based upon a state of facts existing on or before the Initial
Transfer Date shall not be subject to indemnification by Seller.

(B) Any and all Buyer's Claims involving unfair collection practices, failure to
disclose, deceptive acts or practices, breach of contract, the collection of
usurious interest and the like, pertaining to the subject matter of this
Agreement, and based upon a state of facts existing on or after the Initial
Transfer Date.

(C) Any and all Buyer's Claims involving tax and insurance payments or escrow
deposits relating to the subject matter of this Agreement upon which tax and
insurance escrow deposits are provided for in the instruments securing the
Mortgage Loans and which were payable on or after the Initial Transfer Date.

(D) Any misrepresentation made by Seller pursuant to this Agreement, or in any
schedule, statement or certificate furnished by Seller pursuant to this
Agreement.

(E) Any breach of a representation or warranty by Seller, or the nonfulfillment
of any covenant or obligation of Seller contained in this Agreement, or in any
schedule, statement or certificate furnished by Seller pursuant to this
Agreement.

         5.01.02 This indemnity of the Buyer by the Seller provided in this
Article V shall remain in full force and effect regardless of any investigation
made by Buyer or its representatives.

         5.01.03 The indemnity of the Buyer by the Seller provided in this
Section 5.01 shall remain in full force and effect for as long the
representations and warranties survive.

Section 5.02      Indemnification of Seller by Buyer

         5.02.01 Buyer hereby agrees to indemnify and hold Seller harmless
against any claim, cause of action, suit, proceeding or demand, and any and all
losses, liabilities, costs and expenses of any nature whatsoever associated
therewith ("Seller's Claims") arising out of, or in connection with, directly or
indirectly, any breach of any representation or warranty or any other obligation
of Buyer under this Agreement, any state of facts existing after the Transfer
Date which (except for any Seller's Claims which arise out of, or in connection
with, directly or indirectly, an ARM Claim or an ARM Claim Mortgage Loan) did
not exist prior to the Transfer Date, involving the Servicing Rights, Mortgage
Loans and/or Pools subject to this Agreement, whether or not such Seller's
Claims relate to the Servicing Rights, or this Agreement including but not
limited to:

(A) Any and all Seller's Claims involving unfair collection practices, failure
to disclose, deceptive acts or practices, breach of contract, the collection of
usurious interest and the like, pertaining to the subject matter of this
Agreement, and based upon a state of facts existing after the applicable
Transfer Date, which did not exist prior to the applicable Transfer Date.

                                       22
<PAGE>

(B) Any misrepresentation made by Buyer pursuant to this Agreement, or in any
schedule, statement or certificate furnished by Buyer pursuant to this
Agreement.

(C) Any breach of warranty by Buyer, or the nonfulfillment of any covenant of
Buyer contained in this Agreement, or in any schedule, statement or certificate
furnished by Buyer pursuant to this Agreement.

(D) Any and all actions of Buyer, its employees, representatives and agents,
whether by omission or commission, pertaining to the subject matter of the
Agreement and occurring after the applicable Transfer Date, which (except as
otherwise provided in the preamble to this Section 5.02.01) did not exist prior
to the applicable Transfer Date, which materially adversely affect the
enforceability of the instruments securing a Mortgage Loan or the collectability
of the Mortgage Notes.

There shall be excluded from the foregoing indemnification provision any claim,
cause of action, suit, proceeding or demand, and any and all losses,
liabilities, costs and expenses of any nature whatsoever associated therewith
arising out of, or in connection with, directly or indirectly, the activities of
Seller in connection with its servicing, or administration, after the Transfer
Date of the Pending Foreclosure Mortgage Loans and the Pending Disposition REO
Property.

Section 5.03      Notification of Claims for Indemnification

         5.03.01 Buyer agrees to promptly notify Seller in writing of the
existence of any fact known to Buyer giving rise to any obligations of Seller
under Section 5.01.01, and any fact known to Buyer which may give rise to any
such obligations. Buyer agrees promptly to notify Seller of the making of such
Claim or the commencement of such action by a third party as and when same
becomes known to Buyer. Seller shall be entitled to participate in the defense
of any action brought by a third party against Buyer, which may give rise to any
obligation of Seller, and, at its election, to direct the defense thereof at
Seller's own expense. In the event that any cost, expense, judgment or award is
incurred by or levied against Buyer where Seller has undertaken the defense of
any such action, Seller shall pay or reimburse the full amount of any such cost,
expense, judgment or award to or for the benefit of Buyer. Seller shall have
thirty (30) days from receipt of such notice, in accordance with Section 6.05,
to cure the condition or state of facts giving rise to any obligations of Seller
under Section 5.01.01. Unless Buyer or Seller is required by an Investor to
repurchase a Mortgage Loan or indemnify an Investor with respect to a Mortgage
Loan in the meantime, in no event shall Seller be required to repurchase any
Mortgage Loan, pay any money or tender any performance under Section 5.01.01
until the expiration of this thirty (30) day period. If Seller elects to defend
any actions in accordance with this Section, Seller shall not be liable under
Section 5.01.01 for the payment of legal fees of Buyer with respect to such
action, from and after the date that Seller assumes such defense.

         5.03.02 Seller agrees to promptly notify Buyer in writing of the
existence of any fact know to Seller giving rise to any obligations of Buyer
under Section 5.02.01, hereof or elsewhere in this Agreement and, in the case of
any Claim or any litigation brought by a third party, any fact known to Seller
which may give rise to any such obligations. Seller agrees promptly to notify
Buyer of the making of such claim or the commencement of such action by a third
party as and when same becomes known to Seller. Buyer shall be entitled to
participate in the defense of any action brought by a third party against Seller

                                       23
<PAGE>

which may give rise to any obligation of Buyer, and, at its election, to direct
the defense thereof at its own expense. In the event that any cost, expense,
judgment or award is incurred by or levied against Seller where Buyer has
undertaken the defense of any such action, Buyer shall pay or reimburse the full
amount of any such cost, expense, judgment or award to or for the benefit of
Seller. Buyer shall have thirty (30) days from receipt of such notice, in
accordance with Section 6.07, to cure the condition or state of facts giving
rise to any obligations of Seller under Section 5.02.01. In no event shall Buyer
be required to pay any money or tender any performance under Section 5.02.01
until the expiration of this thirty (30) day period. If Buyer elects to defend
any actions in accordance with this Section, Buyer shall not be liable under
Article V for the payment of legal fees and expenses of Seller with respect to
such action, from and after the date that Buyer assumes such defense.

         5.03.03 For purposes of Article V, the term "Mortgage Loan(s)" shall
include within its definition Foreclosure Mortgages if any Foreclosure Mortgages
are transferred to Buyer pursuant to this Agreement.

                                   ARTICLE VI

                                 LOAN REPURCHASE

Section 6.01      Seller's Repurchase After Sale Date.

         6.01.01 If (i) Buyer is required to repurchase any Mortgage Loan by any
Investor after the Sale Date or (ii) Buyer concludes that a Mortgage Loan has
been impaired so as to materially and adversely affect its value as an asset, in
the case of either clause (i) or clause (ii), for reasons resulting from (x)
improper, incorrect, missing and or fraudulent documentation related to a
Mortgage Loan which was created by Seller prior to the applicable Transfer Date
but after the Initial Transfer Date, (y) a breach of Seller's representations
and warranties or other obligations hereunder or under the Servicing Agreement
(z) Seller's improper pooling, errors, omissions, origination or servicing of
such Mortgage Loan prior to the applicable Transfer Date but after the Initial
Transfer Date or for reasons relating to the certification status of the pools,
Seller, at the request of Buyer, and in addition to any indemnification
obligations hereunder, shall reimburse Buyer for the sum of (a) the outstanding
balance of such Mortgage Loan and (b) the Purchase Price for the Servicing
Rights determined hereunder attributable to such Mortgage Loan, and shall
repurchase such Mortgage Loan and the Servicing Rights on the earlier of thirty
(30) days of Buyer's written demand or the date by which the Investor has
requested Buyer to indemnify or to repurchase the Mortgage Loan. The funds to be
provided by Seller to Buyer pursuant to this section shall be the unpaid
principal balance and any accrued unpaid interest paid by Buyer to Investor,
plus any unpaid advances, plus any Purchase Price with respect to the Servicing
Rights paid for the Mortgage Loan under this Agreement.

         6.01.02 In the event of a breach of Seller's representations and
warranties or other obligations hereunder or under the Servicing Agreement, or
Seller's improper pooling, errors, omissions, origination or servicing of such
Mortgage Loan prior to the applicable Transfer Date but after the Initial
Transfer Date or for reasons relating to the certification status of the pools,
where such breach or improper pooling, error, omission, origination or servicing
materially and adversely affects the value of the Servicing Rights as an asset

                                       24
<PAGE>

(but which does not materially and adversely affect the value or the related
Mortgage Loan as an asset) Seller, at the request of Buyer, and in addition to
any indemnification obligations hereunder, shall reimburse Buyer for the
Purchase Price for the Servicing Rights determined hereunder attributable to
such Mortgage Loan, within thirty (30) days of Buyer's written demand. The funds
to be provided by Seller to Buyer pursuant to this section shall be the Purchase
Price for such Servicing Rights, plus any unpaid advances.

Section 6.02      Seller's Right to Contest Repurchase

         6.02.01 Seller shall have the right to contest any repurchase request
of Buyer or any Investor, pursuant, in the case of a repurchase request of an
Investor, to the Investor requirements and within the Investor time limits as
they may be extended. However, if Buyer, pursuant to an Investor request, is
required to repurchase or if Buyer suffers any damages in the meantime, then
Seller shall, notwithstanding any contest or defense, repurchase the Mortgage
Loan and otherwise make Buyer whole at the time of Buyer's request.

Section 6.03      Buyer's Repurchase

         6.03.01 If Buyer should be required to repurchase any Mortgage Loan by
any Investor, at any time after the Sale Date for reasons resulting from the
improper servicing, error or omission of Buyer, then Seller shall not be
responsible for any reimbursement with respect to such Mortgage Loan.

Section 6.04      Seller's Cure Rights

         6.04.01 Within 30 days of Seller's receipt of a notice from Buyer of a
claim under Article V or a repurchase or indemnity request under this Agreement,
Seller shall cure the condition or state of facts giving rise to such claim or
if a cure cannot reasonably be completed within such 30 day period, Seller shall
have commenced a cure for and hereby agrees to diligently pursue such cure to
completion provided, however, Seller may continue to pursue such cure for a
reasonable time beyond the 30 day period for so long as Buyer is not required by
an Investor to repurchase or indemnify the Investor with respect to the Mortgage
Loan which is the subject of the cure. However, if Buyer, pursuant to an
Investor request, has to repurchase, indemnify or if Buyer suffers any damages
in the meantime, then Seller shall, notwithstanding any cure or cure period,
repurchase the Mortgage Loan and otherwise make Buyer whole at the time of
Buyer's request.

                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

Section 7.01      Integration

         7.01.01 This Agreement and the documents referred to herein, including
without limitation the Initial Sale Agreement and the Servicing Agreement,
constitute a final and complete integration of the agreement of the parties
respecting the subject matter hereof, thereby superseding all previous or
contemporaneous oral and written agreements. There are no contemporaneous oral
agreements relating to the subject matter of this Agreement.

                                       25
<PAGE>

Section 7.02      Modification

         7.02.01 This Agreement may not be changed orally but only by an
agreement in writing signed by all parties. Subject to the foregoing, any of the
terms or conditions of this Agreement may be waived or modified at any time by
the party entitled to the benefit thereof, but no such waiver, express or
implied, shall affect or impair the right of the waiving party to require
observance, performance or satisfaction of either (1) the same term or condition
as it applied to a subsequent or previous occasion of (2) any other term or
condition hereof.

Section 7.03      Successors

         7.03.01 This Agreement shall inure to the benefit of and be binding
upon the heirs, representatives, successors and assigns of each party.

Section 7.04      Governing Law

         7.04.01 This Agreement is entered into and its construction and rights,
remedies and obligations arising by, under, through, or an account of it shall
be governed by the laws of the State of California.

Section 7.05      Assignability

         7.05.01 Buyer shall have the right, without Seller's consent, to assign
and transfer this Agreement and all rights, obligations, benefits, privileges
and agreements of Buyer hereunder provided, however, Buyer shall not be
permitted to assign and transfer this Agreement without Seller's consent, which
consent shall not be unreasonably withheld, prior to the payment by Buyer to
Seller of 100% of the Purchase Price. No assignment of this Agreement nor any
rights, obligations, privileges and agreements of Buyer hereunder shall relieve
Buyer of any indemnification obligation hereunder.

Section 7.06      Notices

         7.06.01 Any notice provided for or permitted hereunder shall be in
writing and sent by first class mail, addressed to the parties at the address
for such party set forth in the preamble hereof. All such notices shall be
addressed to the attention of the Bobbi J. Koehler, Senior Vice President, of
Seller and Keith Palmer, Vice President, Loan Administration for the Buyer. The
giving of notice shall be complete three (3) Business Days after depositing of
it, properly addressed and postage prepaid, with the United States Postal
Service.. Address for notices may be changed by giving notice hereunder in
accordance with the requirements of this section.

Section 7.07      Attorney Fees, Costs, Etc.

         7.07.01 If any action at law or in equity, including an action for
declaration relief, is brought to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees from the other party. Such fees may be set by the court in the
trial of such action or may be enforced in a separate action brought for that
purpose. Such fees shall be in addition to any other relief that may be awarded.

                                       26
<PAGE>

Section 7.08      Independent Contractor

         7.08.01 At no time shall Seller represent that it is acting as an agent
for or on behalf of Buyer. At all times, Seller shall act as an independent
contractor. At no time shall Buyer represent that it is acting as an agent for
or on behalf of the Seller. At all times Buyer shall act as an independent
contractor.

Section 7.09      Broker's Fees

         7.09.01 Each party will indemnify the other against claims by any
person claiming a finder's fee, commission, transfer or termination fee in
connection with the negotiation or consummation of this Agreement or the
transaction contemplated hereby.

Section 7.10      Counterparts

         7.10.01 This Agreement may be executed in multiple counterparts, each
of which shall be an original regardless of whether all parties sign the
document. Regardless of the number of counterparts, they shall constitute only
one Agreement.

Section 7.11      Documentation

         7.11.01 Prior to the applicable Transfer Date, Seller shall deliver to
Buyer a certification from the Seller or its Custodian that all Pools are
documented and certified in accordance with Investor guidelines and applicable
law and regulations. Seller will deliver a copy of the inventory of Pools with
such certification. Such inventory and certification shall be in a form and
content satisfactory to Buyer. Seller will have their document custodian(s)
contact Buyer by letter to provide a status report of all Pools under their
control that are to be transferred as contemplated hereunder. Such custodian
status reports (if applicable) will be delivered to Buyer each month until the
transfer is completed and such reports will commence no later than thirty (30)
days after the applicable Transfer Date.

         7.11.02 Not later than the applicable Transfer Date, Seller shall
deliver to Buyer a certification from the Seller that all original documents
including the Mortgage Note, PMI, title policy assignments to Investor,
intervening assignments not properly held by the custodian or Investor are held
by the Seller for each of the Mortgage Loans, and all such documents have been
inventoried and accounted for by the Seller. Seller shall deliver to Buyer a
copy of said inventory with such certification and inventory in a form and
content satisfactory to the Buyer, by placing a copy of all such documents in
the Seller's servicing file, identified with the Seller's loan number, for
delivery to Buyer together with a copy of said inventory on the applicable
Transfer Date.

         7.11.03 All servicing files will be organized and fastened on file
folders that are clearly labeled with the Mortgagor's name and loan number as
specified by Buyer.

         7.11.04 Original loan documents for each loan held by the custodian
will be filed in a separate file, labeled with the loan and Pool/PC number (if
applicable). In addition, all Pool documents will be filed in a separate "Master
Pool File" for each Pool held by the custodian, in compliance with all Investor
guidelines.

                                       27
<PAGE>

         7.11.05 Seller shall provide Buyer a schedule indicating the location
of all the original documents described in Exhibit B for the Mortgage Loans not
later than the applicable Transfer Date.

Section 7.12      Effect of Termination in Part

         7.12.01 Upon termination of this Agreement in part upon the failure of
the condition set forth in Section 2.06.01(A) or 2.06.02(C), (i) all right,
title and interest in the Servicing Rights relating to the Mortgage Loans
affected by such termination shall revert to Seller, (ii) Seller shall refund to
Buyer any and all portions of the Purchase Price, together with interest,
previously paid to the Seller and attributable to such Mortgage Loans and (iii)
the Buyer shall return to the Seller all Mortgage Documents and Records
previously delivered to Buyer by Seller at Seller's expense in connection with
such Mortgage Loans, (iv) Buyer shall promptly execute and deliver to Seller for
filing all documents necessary to terminate the assignment to Buyer and transfer
to Seller all of Buyer's right, title and interest in the Servicing Rights as to
such Mortgage Loans and (v) Buyer shall refund to Seller all servicing fees
received by Buyer during the Interim Period and Seller shall refund all Interim
subservicing fees with respect to such Mortgage Loans.


                                       28
<PAGE>


IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused
this Agreement to be duly executed by one of its duly authorized officers as of
this 1st day of July, 1999.


                                           FIDELITY FEDERAL BANK, A FEDERAL
                                           SAVINGS BANK

                                           By: /s/ MYRON MUELLER
                                              ----------------------------------
                                                  Myron Mueller
                                                  Vice President


ATTEST:


Name: /s/ MYRON MUELLER
     -----------------------------

Its:  SVP and Senior Counsel
     -----------------------------


                                           WESTERN FINANCIAL BANK


                                           By: /s/ KEITH PALMER
                                              ----------------------------------
                                                  Keith Palmer
                                                  Vice President
                                                  Loan Administration


ATTEST:


Name: /s/ SANDRA J. MURRAY
     -----------------------------

Its:  Secretary
     -----------------------------