<PAGE>   1
                                                                    EXHIBIT 10.1


================================================================================

                    WAREHOUSING CREDIT AND SECURITY AGREEMENT
                         (SINGLE FAMILY MORTGAGE LOANS)

                                   BETWEEN

                   BNC MORTGAGE, INC., a Delaware corporation
                                       and
               MORTGAGE LOGIC.COM, INC., a California corporation

                                     AND

                        RESIDENTIAL FUNDING CORPORATION,
                             a Delaware corporation


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


                          Dated as of March 1, 1999


================================================================================




<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 PAGE 
                                                                                 ---- 
<S>    <C>                                                                       <C>  
1.     DEFINITIONS...............................................................  1  
                                                                                      
       1.1         Defined Terms.................................................  1  
                                                                                      
       1.2         Other Definitional Provisions................................. 11  
                                                                                      
2.     THE CREDIT................................................................ 11  
                                                                                      
       2.1         The Commitment................................................ 11  
                                                                                      
       2.2         Procedures for Obtaining Advances............................. 12  
                                                                                      
       2.3         Note.......................................................... 14  
                                                                                      
       2.4         Interest...................................................... 14  
                                                                                      
       2.5         Principal Payments............................................ 16  
                                                                                      
       2.6         Expiration of Commitment...................................... 19  
                                                                                      
       2.7         Method of Making Payments..................................... 19  
                                                                                      
       2.8         Commitment Fees and Non-Usage Fees............................ 19  
                                                                                      
       2.9         Warehousing Fees.............................................. 20  
                                                                                      
       2.10        Miscellaneous Charges......................................... 20  
                                                                                      
       2.11        Interest Limitation........................................... 20  
                                                                                      
       2.12        Increased Costs; Capital Requirements......................... 21  
                                                                                      
3.     COLLATERAL................................................................ 22  
                                                                                      
       3.1         Grant of Security Interest.................................... 22  
                                                                                      
       3.2         Release of Security Interest in Collateral.................... 24  
                                                                                      
       3.3         Mark-to-Market................................................ 25  
                                                                                      
       3.4         Delivery of Additional Collateral or Mandatory Prepayment..... 26  
                                                                                      
       3.5         Release of Collateral......................................... 27  
                                                                                      
       3.6         Collection and Servicing Rights............................... 27  

</TABLE>

                                        i

<PAGE>   3

<TABLE>
<CAPTION>

                                                                                 PAGE 
                                                                                 ---- 
<S>    <C>                                                                       <C>  
       3.7         Return of Collateral at End of Commitment..................... 27  
                                                                                      
4.     CONDITIONS PRECEDENT...................................................... 28  
                                                                                      
       4.1         Initial Advance............................................... 28  
                                                                                      
       4.2         Each Advance.................................................. 31  
                                                                                      
5.     REPRESENTATIONS AND WARRANTIES............................................ 32  
                                                                                      
       5.1         Organization; Good Standing; Subsidiaries..................... 32  
                                                                                      
       5.2         Authorization and Enforceability.............................. 32  
                                                                                      
       5.3         Approvals..................................................... 33  
                                                                                      
       5.4         Financial Condition........................................... 33  
                                                                                      
       5.5         Litigation.................................................... 33  
                                                                                      
       5.6         Compliance with Laws.......................................... 34  
                                                                                      
       5.7         Regulation U.................................................. 34  
                                                                                      
       5.8         Investment Company Act........................................ 34  
                                                                                      
       5.9         Payment of Taxes.............................................. 34  
                                                                                      
       5.10        Agreements.................................................... 35  
                                                                                      
       5.11        Title to Properties........................................... 35  
                                                                                      
       5.12        ERISA......................................................... 35  
                                                                                      
       5.13        Eligibility................................................... 36  
                                                                                      
       5.14        Place of Business............................................. 36  
                                                                                      
       5.15        Special Representations Concerning Collateral................. 36  
                                                                                      
       5.16        Servicing..................................................... 38  
                                                                                      
       5.17        No Adverse Selection.......................................... 38  
                                                                                      
       5.18        Year 2000 Compliance.......................................... 38  
                                                                                      
6.     AFFIRMATIVE COVENANTS..................................................... 39  
                                                                                      
       6.1         Payment of Note............................................... 39  
</TABLE>



                                       ii

<PAGE>   4


<TABLE>
<CAPTION>

                                                                                 PAGE 
                                                                                 ---- 
<S>    <C>                                                                       <C>  
       6.2         Financial Statements and Other Reports........................ 39  
                                                                                      
       6.3         Maintenance of Existence; Conduct of Business................. 42  
                                                                                      
       6.4         Compliance with Applicable Laws............................... 42  
                                                                                      
       6.5         Inspection of Properties and Books............................ 42  
                                                                                      
       6.6         Notice........................................................ 43  
                                                                                      
       6.7         Payment of Debt, Taxes, etc................................... 43  
                                                                                      
       6.8         Insurance..................................................... 44  
                                                                                      
       6.9         Closing Instructions.......................................... 44  
                                                                                      
       6.10        Subordination of Certain Indebtedness......................... 44  
                                                                                      
       6.11        Other Loan Obligations........................................ 44  
                                                                                      
       6.12        Use of Proceeds of Advances................................... 45  
                                                                                      
       6.13        Special Affirmative Covenants Concerning Collateral........... 45  
                                                                                      
7.     NEG COVENANTS............................................................. 46  
                                                                                      
       7.1         Contingent Liabilities........................................ 46  
                                                                                      
       7.2         Sale or Pledge of Servicing Contracts......................... 46  
                                                                                      
       7.3         Merger; Sale of Assets; Acquisitions.......................... 46  
                                                                                      
       7.4         Deferral of Subordinated Debt................................. 47  
                                                                                      
       7.5         Loss of Eligibility........................................... 47  
                                                                                      
       7.6         Debt to Tangible Net Worth Ratio.............................. 47  
                                                                                      
       7.7         Minimum Tangible Net Worth.................................... 47  
                                                                                      
       7.8         Liquidity..................................................... 47  
                                                                                      
       7.9         Transactions with Affiliates.................................. 47  
                                                                                      
       7.10        Quarterly Net Income.......................................... 47  
                                                                                      
       7.11        Acquisition of Recourse Servicing Contracts................... 47  
                                                                                      
       7.12        Special Negative Covenants Concerning Collateral.............. 48  
</TABLE>



                                       iii

<PAGE>   5

<TABLE>
<CAPTION>

                                                                                PAGE 
                                                                                ---- 
<S>    <C>                                                                       <C> 
8.     DEFAULTS; REMEDIES........................................................ 48 
                                                                                     
       8.1         Events of Default............................................. 48 
                                                                                     
       8.2         Remedies...................................................... 51 
                                                                                     
       8.3         Application of Proceeds....................................... 55 
                                                                                     
       8.4         Lender Appointed Attorney-in-Fact............................. 56 
                                                                                     
       8.5         Right of Set-Off.............................................. 56 
                                                                                     
9.     NOTICES................................................................... 57 
                                                                                     
10.    REIMBURSEMENT OF EXPENSES; INDEMNITY...................................... 57 
                                                                                     
11.    FINANCIAL INFORMATION..................................................... 58 
                                                                                     
12.    MISCELLANEOUS............................................................. 58 
                                                                                     
       12.1        Terms Binding Upon Successors; Survival of Representations.... 58 
                                                                                     
       12.2        Assignment.................................................... 59 
                                                                                     
       12.3        Amendments.................................................... 59 
                                                                                     
       12.4        Governing Law................................................. 59 
                                                                                     
       12.5        Participations................................................ 59 
                                                                                     
       12.6        Relationship of the Parties................................... 59 
                                                                                     
       12.7        Severability.................................................. 60 
                                                                                     
       12.8        Operational Reviews........................................... 60 
                                                                                     
       12.9        Consent to Credit References.................................. 60 
                                                                                     
       12.10       Consent to Jurisdiction....................................... 60 
                                                                                     
       12.11       Counterparts.................................................. 61 
                                                                                     
       12.12       Entire Agreement.............................................. 61 
                                                                                     
       12.13       WAIVER OF JURY TRIAL.......................................... 61 
</TABLE>



                                       iv

<PAGE>   6

                                    EXHIBITS
                                    --------


Exhibit A                Promissory Note                     
                                                             
Exhibit B                [INTENTIONALLY OMITTED]             
                                                             
Exhibit C-SF             Request for Advance Against Single  
                         Family Mortgage Loans               
                                                             
Exhibit D-SF             Procedures and Documentation for    
                         Warehousing Single Family Mortgage  
                         Loans                               
                                                             
Exhibit E                Schedule of Servicing Contracts     
                                                             
Exhibit F                Subordination of Debt Agreement     
                                                             
Exhibit G                Subsidiaries                        
                                                             
Exhibit H                Legal Opinion                       
                                                             
Exhibit I-SF             Officer's Certificate               
                                                             
Exhibit J                Schedule of Existing Warehouse Lines 
                                                             
Exhibit K                Funding Bank Agreement (Wire)       
                                                             
Exhibit L                Commitment Summary Report           
                                                             
Exhibit M                Terms Applicable to Advances Against
                         Eligible Loans                      
                                                             
Exhibit N                Terms of Guaranteed Obligations     




                                        v

<PAGE>   7



            THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as of March 1,
1999, between BNC MORTGAGE, INC., a Delaware corporation ("BNC"), MORTGAGE
LOGIC.COM, INC., a California corporation ("Mortgage Logic") (BNC and Mortgage
Logic, collectively referred to as the "Borrowers"), having their principal
office at 1063 McGaw Avenue, Irvine, CA 92614 and RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation (the "Lender"), having its principal office
at 8400 Normandale Lake Blvd., Suite 600, Minneapolis, Minnesota 55437.

            WHEREAS, the Borrowers and the Lender desire to set forth herein the
terms and conditions upon which the Lender shall provide warehouse financing to
the Borrowers;

            NOW, THEREFORE, the parties hereto hereby agree as follows:

1.          DEFINITIONS.

                        1.1 Defined Terms. Capitalized terms defined below or
            elsewhere in this Agreement (including the Exhibits hereto) shall
            have the following meanings:

                        "Adjusted Servicing Portfolio" means, for any Person,
            the Servicing Portfolio of such Person, but excluding the principal
            balance of Mortgage Loans included in the Servicing Portfolio at
            such date (a) which are past due for principal or interest for sixty
            (60) days or more, (b) with respect to which such Person is
            obligated to repurchase or indemnify the holder of the Mortgage
            Loans as a result of defaults on the Mortgage Loans at any time
            during the term of such Mortgage Loans, (c) for which the Servicing
            Contracts are not owned by such Person free and clear of all Liens
            (other than in favor of the Lender), or (d) which are serviced by
            the Borrowers for others under subservicing arrangements.

                        "Adjusted Tangible Net Worth" means with respect to any
            Person at any date, the Tangible Net Worth of such Person at such
            date, excluding capitalized excess servicing fees and capitalized
            servicing rights, plus one percent (1%) of the Adjusted Servicing
            Portfolio, and plus deferred taxes arising from capitalized excess
            servicing fees and capitalized servicing rights.

                        "Advance" means a disbursement by the Lender under the
            Commitment pursuant to Section 2.1 of this Agreement.

                        "Advance Request" has the meaning set forth in Section
            2.2(a) hereof.

                        "Affiliate" has the meaning set forth in Rule 12b-2 of
            the General Rules and Regulations under the Exchange Act.

                                        1

<PAGE>   8



                        "Agency Security" means a Mortgage-backed Security 
            issued or guarantied by Fannie Mae, Freddie Mac or Ginnie Mae.

                        "Agreement" means this Warehousing Credit and Security
            Agreement (Single Family Mortgage Loans), either as originally
            executed or as it may from time to time be supplemented, modified or
            amended.

                        "Approved Custodian" means a pool custodian or other
            Person which is deemed acceptable to the Lender from time to time in
            its sole discretion to hold a Mortgage Loan for inclusion in a
            Mortgage Pool or to hold a Mortgage Loan as agent for an Investor
            who has issued a Purchase Commitment for such Mortgage Loan.

                        "Borrowers" has the meaning set forth in the first
            paragraph of this Agreement.

                        "Business Day" means any day excluding Saturday or
            Sunday and excluding any day on which national banking associations
            are closed for business.

                        "Cash Collateral Account" means a demand deposit account
            maintained at the Funding Bank in the name of the Lender and
            designated for receipt of the proceeds of the sale or other
            disposition of the Collateral.

                        "Check Disbursement Account" means a demand deposit
            account maintained at the Funding Bank in the name of the Borrowers
            and under the control of the Lender for the clearing of checks
            written by the Borrowers to fund Advances.

                        "Closing Date" means March 1, 1999.

                        "Collateral" has the meaning set forth in Section 3.1
            hereof.

                        "Collateral Documents" has the meaning set forth in
            Section 2.2(a) hereof.

                        "Collateral Value" means (a) with respect to any
            Eligible Loan as of the date of determination, the lesser of (i) the
            amount of any Advance made against such Eligible Loan under Section
            2.1(c) hereof or (ii) the Fair Market Value of such Eligible Loan;
            (b) in the event Pledged Mortgages have been exchanged for Agency
            Securities, the lesser of (i) the amount of any Advances outstanding
            against the Eligible Loans backing such Agency Securities or (ii)
            the Fair Market Value of such Pledged Securities; and (c) with
            respect to cash, the amount of such cash.


                                        2

<PAGE>   9

                        "Commitment" has the meaning set forth in Section 2.1(a)
            hereof.

                        "Commitment Amount" means Fifty Million Dollars
            ($50,000,000).

                        "Commitment Fee" means a fee payable by the Borrowers in
            consideration of the Lender's issuance of the Commitment. The amount
            of the Commitment Fee, if any, is set forth in Section 2.8(a)
            hereof.

                        "Committed Purchase Price" means for an Eligible Loan
            the product of the Mortgage Note Amount multiplied by (a) the price
            (expressed as a percentage) as set forth in a Purchase Commitment
            for such Eligible Loan or (b) in the event such Eligible Loan is to
            be used to back an Agency Security, the price (expressed as a
            percentage) as set forth in a Purchase Commitment for such Agency
            Security.

                        "Credit Score" means a mortgagor's overall consumer
            credit rating, represented by a single numeric credit score
            calculated using the Fair, Isaac consumer credit scoring system, as
            provided by a credit repository acceptable to the Lender and the
            Investor that issued the Purchase Commitment covering the related
            Mortgage Loan.

                        "Debt" means, with respect to any Person at any date,
            (a) all indebtedness or other obligations of such Person which, in
            accordance with GAAP, would be included in determining total
            liabilities as shown on the liabilities side of a balance sheet of
            such Person at such date, and (b) all indebtedness or other
            obligations of such Person for borrowed money or for the deferred
            purchase price of property or services; provided that for purposes
            of this Agreement, there shall be excluded from Debt at any date
            Subordinated Debt not due within one year of such date, loan loss
            reserves and deferred taxes arising from capitalized excess
            servicing fees and capitalized servicing rights.

                        "Default" means the occurrence of any event or existence
            of any condition which, but for the giving of Notice, the lapse of
            time, or both, would constitute an Event of Default.

                        "Depository Benefit" shall mean the compensation
            received by the Lender, directly or indirectly, as a result of the
            Borrowers' maintenance of Eligible Balances with a Designated Bank.

                        "Designated Bank" means any bank(s) designated from time
            to time by the Lender as a Designated Bank, but only for as long as
            the Lender has an agreement under which the Lender can receive a
            Depository Benefit.

                                        3

<PAGE>   10

                        "Designated Bank Charges" means any fees, interest or
            other charges that would otherwise be payable to a Designated Bank
            in connection with Eligible Balances maintained at a Designated
            Bank, including Federal Deposit Insurance Corporation insurance
            premiums, service charges and such other charges as may be imposed
            by governmental authorities from time to time.

                        "Eligible Balances" means all funds of or maintained by
            the Borrowers and their Subsidiaries in accounts at a Designated
            Bank, less balances to support float, reserve requirements, and such
            other reductions as may be imposed by governmental authorities from
            time to time.

                        "Eligible Loan" means a Single Family Mortgage Loan
            secured by a Mortgage on owner occupied real property located in one
            of the states of the United States or the District of Columbia that
            is designated as such on Exhibit M attached hereto and made a part
            hereof.

                        "Eligible Mortgage Pool" means a Mortgage Pool for which
            (a) an Approved Custodian has issued its initial certification (on
            the basis of which an Agency Security is to be issued), (b) there
            exists a Purchase Commitment covering such Agency Security, and (c)
            such Agency Security will be delivered to the Lender.

                        "ERISA" means the Employee Retirement Income Security
            Act of 1974 and all rules and regulations promulgated thereunder, as
            amended from time to time and any successor statute.

                        "Event of Default" means any of the conditions or events
            set forth in Section 8.1 hereof.

                        "Exchange Act" means the Securities Exchange Act of
            1934, as amended from time to time, and any successor statute.

                        "Fair Market Value" means at any time for an Eligible
            Loan or the related Agency Security (if such Eligible Loan is to be
            used to back an Agency Security), (a) if such Eligible Loan or the
            related Agency Security is covered by a Purchase Commitment, the
            Committed Purchase Price, or (b) otherwise, the market price for
            such Eligible Loan or Agency Security, determined by the Lender
            based on market data for similar Mortgage Loans or Agency Securities
            and such other criteria as the Lender deems appropriate.

                        "Fannie Mae" means Fannie Mae, a corporation created
            under the laws of the United States, and any successor thereto.


                                        4

<PAGE>   11

                        "Federal Funds Rate" mean, as of any date of
            determination, the effective federal funds rate (per annum) of
            interest in effect on such date (or, if such date is not a Business
            Day, the preceding Business Day) as published by Bridge Information
            Services in its MoneyCenter System. If this federal funds rate is
            not so offered or published per any Business Day, then the Federal
            Funds Rate for any applicable date should mean the highest offered
            federal funds rate (per annum) published for such Business Day
            published in The Wall Street Journal in its regular column entitled
            "Money Rates." [For use where the Lender owes funds to another
            Lender and does not pay on the Business Day above.]

                        "FHA" means the Federal Housing Administration and any
            successor thereto.

                        "FICA" means the Federal Insurance Contributions Act.

                        "FIRREA" means the Financial Institutions Reform,
            Recovery and Enforcement Act of 1989, as amended from time to time,
            and the regulations promulgated and rulings issued thereunder.

                        "First Mortgage" means a Mortgage which constitutes a
            first Lien on the property covered thereby.

                        "First Mortgage Loan" means a Mortgage Loan secured by a
            First Mortgage.

                        "Freddie Mac" means Freddie Mac, a corporation created
            under the laws of the United States, and any successor thereto.

                        "Funding Bank" means The First National Bank of Chicago
            or any other bank designated from time to time by the Lender.

                        "Funding Bank Agreement" means the letter agreement
            substantially in the form of Exhibit K hereto.

                        "GAAP" means generally accepted accounting principles
            set forth in the opinions and pronouncements of the Accounting
            Principles Board and the American Institute of Certified Public
            Accountants and statements and pronouncements of the Financial
            Accounting Standards Board or in such other statements by such other
            entity as may be approved by a significant segment of the accounting
            profession, which are applicable to the circumstances as of the date
            of determination.

                        "Gestation Agreement" means an agreement under which the
            Borrowers agree to sell or finance (a) a Pledged Mortgage prior to
            the date of purchase by an Investor, or (b) a

                                        5

<PAGE>   12



            Mortgage Pool prior to the date an Agency Security backed by such
            Mortgage Pool is issued.

                        "Ginnie Mae" means the Government National Mortgage
            Association, an agency of the United States government, and any
            successor thereto.

                        "Hedging Arrangements" means, with respect to any
            Person, any agreements or other arrangement (including, without
            limitation, interest rate swap agreements, interest rate cap
            agreements and forward sale agreements) entered into by such Person
            to protect itself against changes in interest rates or the market
            value of assets.

                        "HUD" means the Department of Housing and Urban
            Development and any successor thereto.

                        "Indemnified Liabilities" has the meaning set forth in
            Article 10 hereof.

                        "Internal Revenue Code" means the Internal Revenue Code
            of 1986, or any subsequent federal income tax law or laws, as any of
            the foregoing have been or may from time to time be amended.

                        "Investor" means Fannie Mae, Freddie Mac or a
            financially responsible private institution which is deemed
            acceptable by the Lender from time to time in its sole discretion
            with respect to a particular category of Pledged Mortgages.

                        "Lender" has the meaning set forth in the first
            paragraph of this Agreement.

                        "LIBOR" means, for each 30-day period, the rate of
            interest per annum which is equal to the arithmetic mean of the U.S.
            Dollar London Interbank Offered Rates for one (1) month periods of
            certain U.S. banks as of 11:00 a.m. London time on the first
            Business Day of each 30-day period on which the London Interbank
            market is open, as published by Bridge Information Services on its
            MoneyCenter system. LIBOR shall be rounded, if necessary, to the
            next higher one sixteenth of one percent (1/16%). If such U.S.
            dollar LIBOR rates are not so offered or published for any period,
            then during such period LIBOR shall mean the London Interbank
            Offered Rate for one (1) month periods published on the first
            Business Day of each 30-day period on which the London Interbank
            market is open, in the Wall Street Journal in its regular column
            entitled "Money Rates."

                        "Lien" means any lien, mortgage, deed of trust, pledge,
            security interest, charge or encumbrance of any kind (including any
            conditional sale or other title retention

                                        6

<PAGE>   13

            agreement, any lease in the nature thereof, and any agreement
            to give any security interest).

                        "Liquid Assets" means, with respect to any Person at any
            date, the following unrestricted and unencumbered assets owned by
            such Person on such date: cash, funds on deposit in any bank located
            in the United States, investment grade commercial paper, money
            market funds, and the excess, if any, of Mortgage Loans and
            Mortgage-backed Securities held for sale (valued in accordance with
            GAAP) excluding Mortgage Loans that are more than 30 days delinquent
            (determined pursuant to a Mortgage Bankers Association of America
            method for determining delinquency status as in effect on the date
            hereof) over the outstanding aggregate principal amount of notes or
            other debt instruments against which such Mortgage Loans or
            Mortgage- backed Securities are pledged as Collateral.

                        "Loan Documents" means this Agreement, the Note, any
            agreement of the Borrowers relating to Subordinated Debt, and each
            other document, instrument or agreement executed by the Borrowers in
            connection herewith or therewith, as any of the same may be amended,
            restated, renewed or replaced from time to time.

                        "Manufactured Home" means a structure that is built on a
            permanent chassis (steel frame) with the wheel assembly necessary
            for transportation in one or more sections to a permanent site or
            semi-permanent site and which has been built in compliance with the
            National Manufactured Housing Construction and Safety Standards
            established by HUD.

                        "Margin Stock" has the meaning assigned to that term in
            Regulation U of the Board of Governors of the Federal Reserve System
            as in effect from time to time.

                        "Maturity Date" shall mean the earlier of: (a) the close
            of business on March 1, 2000, as such date may be extended from time
            to time in writing by the Lender, in its sole discretion, on which
            date the Commitment shall expire of its own term and without the
            necessity of action by the Lender, and (b) the date the Advances
            become due and payable pursuant to Section 8.2 below.

                        "Miscellaneous Charges" has the meaning set forth in
            Section 2.10 hereof.

                        "Mortgage" means a mortgage or deed of trust on improved
            and substantially completed real property (including, without
            limitation, real property to which a Manufactured Home has been
            affixed in a manner such that the Lien of a mortgage or deed of
            trust would attach to such manufactured home under applicable real
            property law).

                                        7

<PAGE>   14

                        "Mortgage-backed Securities" means securities that are
            secured or otherwise backed by Mortgage Loans.

                        "Mortgage Loan" means any loan evidenced by a Mortgage
            Note and secured by a Mortgage.

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

                        "Mortgage Note Amount" means, as of the date of
            determination, the then outstanding unpaid principal amount of a
            Mortgage Note [or other note evidencing an Eligible Loan] (whether
            or not an additional amount is available to be drawn thereunder).

                        "Mortgage Pool" means a pool of one or more Pledged
            Mortgages on the basis of which there is to be issued a
            Mortgage-backed Security.

                        "Multiemployer Plan" means a "multiemployer plan" as
            defined in Section 4001(a)(3) of ERISA which is maintained for
            employees of the Borrowers or a Subsidiary of the Borrowers.

                        "Non-Usage Fee" has the meaning set forth in
            Section 2.8(b) hereof.

                        "Note" has the meaning set forth in Section 2.3 hereof.

                        "Notices" has the meaning set forth in Article 9 hereof.

                        "Obligations" means any and all indebtedness,
            obligations and liabilities of the Borrowers to the Lender (whether
            now existing or hereafter arising, voluntary or involuntary, whether
            or not jointly owed with others, direct or indirect, absolute or
            contingent, liquidated or unliquidated, and whether or not from time
            to time decreased or extinguished and later increased, created or
            incurred), whether or not arising out of or related to the Loan
            Documents.

                        "Officer's Certificate" means a certificate executed on
            behalf of BNC by its chief financial officer or its treasurer or by
            such other officer as may be designated herein and substantially in
            the form of Exhibit I-SF attached hereto.

                        "Operating Account" means a demand deposit account
            maintained at the Funding Bank in the name of the Borrowers and
            designated for funding that portion of each Eligible Loan not funded
            by an Advance made against such Eligible Loan and for returning any
            excess payment from an Investor for a Pledged Mortgage or Pledged
            Security.


                                        8

<PAGE>   15

                        "Participant" has the meaning set forth in Section 12.5
            hereof.

                        "Person" means and includes natural persons,
            corporations, limited liability companies, limited partnerships,
            general partnerships, joint stock companies, joint ventures,
            associations, companies, trusts, banks, trust companies, land
            trusts, business trusts or other organizations, whether or not legal
            entities, and governments and agencies and political subdivisions
            thereof.

                        "Plans" has the meaning set forth in Section 5.12
            hereof.

                        "Pledged Mortgages" has the meaning set forth in Section
            3.1(a) hereof.

                        "Pledged Securities" has the meaning set forth in
            Section 3.1(b) hereof.

                        "Purchase Commitment" means a written commitment, in
            form and substance satisfactory to the Lender, issued in favor of
            the Borrowers by an Investor pursuant to which that Investor commits
            to purchase Mortgage Loans or Mortgage-backed Securities.

                        "Release Amount" has the meaning set forth in Section
            3.2(g) hereof.

                        "RFC" means Residential Funding Corporation, a Delaware
            corporation, and any successor thereto.

                        "Second Mortgage" means a Mortgage which constitutes a
            second Lien on the property covered thereby.

                        "Second Mortgage Loan" means a Mortgage Loan secured by
            a Second Mortgage.

                        "Servicing Contract" means, with respect to any Person,
            the arrangement, whether or not in writing, pursuant to which such
            Person has the right to service Mortgage Loans.

                        "Servicing Portfolio" means, as to any Person, the
            unpaid principal balance of Mortgage Loans serviced by such Person
            under Servicing Contracts.

                        "Single Family Mortgage Loan" means a Mortgage Loan
            secured by a Mortgage covering improved real property containing one
            to four family residences.

                        "Statement Date" means the date of the most recent
            financial statements of the Borrowers (and, if applicable, its

                                        9

<PAGE>   16

            Subsidiaries, on a consolidated basis) delivered to the Lender under
            the terms of this Agreement.

                        "Subordinated Debt" means (a) all indebtedness of the
            Borrowers for borrowed money which is effectively subordinated in
            right of payment to all other present and future Obligations either
            (i) pursuant to a Subordination of Debt Agreement in the form of
            Exhibit F hereto or (ii) otherwise on terms acceptable to the
            Lender, and (b) solely for purposes of Section 7.4 hereof, all
            indebtedness of the Borrowers which is required to be subordinated
            by Section 4.1(b) or Section 6.10 hereof.

                        "Subsidiary" means any corporation, association or other
            business entity in which more than fifty percent (50%) of the total
            voting power or shares of stock entitled to vote in the election of
            directors, managers or trustees thereof is at the time owned or
            controlled, directly or indirectly, by any Person or one or more of
            the other Subsidiaries of that Person or a combination thereof.

                        "Tangible Net Worth" means with respect to any Person at
            any date, the excess of the total assets of such Person over total
            liabilities of such Person on such date, each to be determined in
            accordance with GAAP consistent with those applied in the
            preparation of the financial statements referred to in Section
            4.1(a)(5) hereof, plus that portion of Subordinated Debt not due
            within one year of such date; provided that, for purposes of
            calculating Tangible Net Worth, there shall be excluded from total
            assets advances or loans to shareholders, officers, employees or
            Affiliates, investments in Affiliates, assets pledged to secure any
            liabilities not included in the Debt of such Person, intangible
            assets, those other assets which would be deemed by HUD to be
            non-acceptable in calculating adjusted net worth in accordance with
            its requirements in effect as of such date, as such requirements
            appear in the "Audit Guide for Audit of Approved Non-Supervised
            Mortgagees," and other assets deemed unacceptable by the Lender in
            its sole discretion.

                        "Trust Receipt" means a trust receipt in a form approved
            by and pursuant to which the Lender may deliver any document
            relating to the Collateral to the Borrowers for correction or
            completion.

                        "Unused Portion" has the meaning set forth in Section
            2.8(b) hereof.

                        "Used Portion" has the meaning set forth in Section
            2.8(b) hereof.


                                       10

<PAGE>   17

                        "VA" means the U.S. Department of Veterans Affairs and
            any successor thereto.

                        "Warehousing Fee" has the meaning set forth in Section
            2.9 hereof.

                        "Wet Settlement Advance" means an Advance pursuant to
            Section 2.2(b) of this Agreement in respect of the closing or
            settlement of a Mortgage Loan, from the time of such Advance until
            the time of subsequent delivery of the Collateral Documents as
            provided in such Section and the Exhibit referenced therein.

                        "Wire Disbursement Account" means a demand deposit
            account maintained at the Funding Bank in the name of the Lender for
            the clearing of wire transfers requested by the Borrowers to fund
            Advances.

                        "Year 2000 Problem" means the risk that computer
            applications may not be able to properly perform date- sensitive
            functions after December 31, 1999.

                        1.2 Other Definitional Provisions.

                                1.2(a) Accounting terms not otherwise defined
                        herein shall have the meanings given the terms under
                        GAAP.

                                1.2(b) Defined terms may be used in the singular
                        or the plural, as the context requires.

                                1.2(c) All references to time of day shall mean
                        the then applicable time in Chicago, Illinois, unless
                        expressly provided to the contrary.

2. THE CREDIT.

                        2.1  The Commitment.

                                    2.1(a) Subject to the terms and conditions
                        of this Agreement and provided no Default or Event of
                        Default has occurred and is continuing, the Lender
                        agrees from time to time during the period from the
                        Closing Date to, but not including, the Maturity Date,
                        to make Advances to the Borrowers, provided the total
                        aggregate principal amount outstanding at any one time
                        of all such Advances shall not exceed the Commitment
                        Amount. The obligation of the Lender to make Advances
                        hereunder up to the Commitment Amount is hereinafter
                        referred to as the "Commitment." Within the Commitment,
                        the Borrowers may borrow, repay and reborrow. All
                        Advances under this

                                       11

<PAGE>   18

                        Agreement shall constitute a single indebtedness, and
                        all of the Collateral shall be security for the Note and
                        for the performance of all the Obligations. Advances
                        shall be made either to BNC or to Mortgage Logic, as
                        shall be requested by BNC or Mortgage Logic, but each
                        Advance, whether made to BNC or to Mortgage Logic shall
                        be deemed made to or for the benefit of BNC and Mortgage
                        Logic, and BNC and Mortgage Logic, jointly and
                        severally, shall be obligated to repay any Advances made
                        to BNC or Mortgage Logic under the Commitment. With
                        respect to its obligation to repay Advances made to the
                        other Borrower, each Borrower agrees to the terms set
                        forth in Exhibit N attached hereto and made a part
                        hereof.

                                    2.1(b) Advances shall be used by the
                        Borrowers solely for the purpose of funding the
                        acquisition or origination of Eligible Loans and shall
                        be made at the request of the Borrowers, in the manner
                        hereinafter provided in Section 2.2 hereof, against the
                        pledge of such Eligible Loans as Collateral therefor.
                        The limitations on the use of Advances set forth on
                        Exhibit M attached hereto and made a part hereof shall
                        be applicable. In addition, the following limitations on
                        the use of Advances shall be applicable:

                                                (1) No Advance shall be made
                                    against any Mortgage Loan which was closed
                                    more than ninety (90) days prior to the date
                                    of the requested Advance.

                                                (2) No Advance shall be made
                                    against a Mortgage Loan other than a
                                    Mortgage Loan secured by a Mortgage on real
                                    property located in one of the states of the
                                    United States or the District of Columbia.

                                    2.1(c) No Advance shall exceed the following
                        amount applicable to the type of Eligible Loan at the
                        time it is pledged to secure an Advance hereunder:

                                                (1) For an Eligible Loan pledged
                                    hereunder, the amount set forth on Exhibit M
                                    attached hereto and made a part hereof.

                        2.2 Procedures for Obtaining Advances.

                                    2.2(a) The Borrowers may obtain an Advance
                        hereunder, subject to the satisfaction of the conditions
                        set forth in Sections 4.1 and 4.2 hereof, upon
                        compliance with the procedures set forth in this Section
                        2.2 and in Exhibit D-SF with respect to Advances,
                        attached hereto and made a part hereof including the
                        delivery of all

                                       12

<PAGE>   19



                        documents listed in Exhibit D-SF, as applicable (the
                        "Collateral Documents") to the Lender. Requests for
                        Advances shall be initiated by the Borrowers by
                        delivering to the Lender, no later than one (1) Business
                        Day prior to any Business Day that the Borrowers desire
                        to borrow hereunder, a completed and signed request for
                        an Advance (an "Advance Request") on the then current
                        form approved by the Lender. The current form in use by
                        the Lender is Exhibit C-SF for Advances, attached hereto
                        and made a part hereof. The Lender shall have the right,
                        on not less than three (3) Business Days' prior Notice
                        to the Borrowers, to modify any of said Exhibits to
                        conform to current legal requirements or Lender
                        practices, and, as so modified, said Exhibits shall be
                        deemed a part hereof.

                                    2.2(b) In the case of a Wet Settlement
                        Advance, the Borrowers shall follow the procedures and,
                        at or prior to the Lender's making of such Wet
                        Settlement Advance, shall deliver to the Lender the
                        documents set forth in Exhibit D-SF hereto. In the case
                        of a Mortgage Loan financed through a Wet Settlement
                        Advance, the Borrowers shall cause all Collateral
                        Documents required to be delivered to the Lender
                        pursuant to Exhibit D-SF within seven (7) Business Days
                        after the date of the Wet Settlement Advance relating
                        thereto.

                                    2.2(c) Before funding, the Lender shall have
                        a reasonable time (one (1) Business Day under ordinary
                        circumstances) to examine such Advance Request and the
                        Collateral Documents to be delivered prior to such
                        requested Advance, as set forth in the applicable
                        Exhibit hereto, and may reject such of them as do not
                        meet the requirements of this Agreement or of the
                        related Purchase Commitment.

                                    2.2(d) The Borrowers shall hold in trust for
                        the Lender, and the Borrowers shall deliver to the
                        Lender promptly upon request, or if the recorded
                        Collateral Documents have not yet been returned from the
                        recording office, immediately upon receipt by the
                        Borrowers of such recorded Collateral Documents, and the
                        Pledged Mortgage is not being held by an Investor for
                        purchase or has not been redeemed from pledge, the
                        following: (1) the originals of the Collateral Documents
                        for which copies are required to be delivered to the
                        Lender pursuant to Exhibit D-SF, (2) the original
                        lender's ALTA Policy of Title Insurance or an equivalent
                        thereto, and (3) any other documents relating to a
                        Pledged Mortgage which the Lender may request,
                        including, without limitation, documentation evidencing
                        the FHA Commitment to Insure or the VA Guaranty of any
                        Pledged Mortgage which is either

                                       13

<PAGE>   20

                        FHA insured or VA guaranteed, the appraisal, Private
                        Mortgage Insurance Certificate, if applicable, the
                        Regulation Z Statement, certificates of casualty or
                        hazard insurance, credit information on the maker of
                        each such Mortgage Note, a copy of a HUD-1 or
                        corresponding purchase advice and other documents of all
                        kinds which are customarily desired for inspection or
                        transfer incidental to the purchase of any Mortgage Note
                        by an Investor and any additional documents which are
                        customarily executed by the seller of a Mortgage Note to
                        an Investor.

                                    2.2(e) To make an Advance, the Lender shall
                        cause the Funding Bank to credit either the Wire
                        Disbursement Account or the Check Disbursement Account
                        upon compliance by the Borrowers with the terms of the
                        Loan Documents. The Lender shall determine in its sole
                        discretion the method by which Advances and other
                        amounts on deposit in the Wire Disbursement Account are
                        disbursed by the Funding Bank to or for the account of
                        the Borrowers.

                                    2.2(f) If, pursuant to the authorization
                        given by the Borrowers in the Funding Bank Agreement,
                        for the purpose of funding a Mortgage Loan against which
                        the Lender has made an Advance in accordance with a
                        Request for Advance (i) the Lender debits the Borrowers'
                        Operating Account at the Funding Bank to the extent
                        necessary to cover a wire to be initiated by the Lender,
                        or (ii) the Lender directs the Funding Bank to honor a
                        check drawn by the Borrowers on their Check Disbursement
                        Account at the Funding Bank, and such debit or direction
                        results in an overdraft, the Lender may make an
                        additional Advance to fund such overdraft.

                        2.3 Note. The Borrowers' Obligations shall be evidenced
            by the promissory note (the "Note") dated as of the date hereof
            substantially in the form of Exhibit A attached hereto. The term
            "Note" shall include all extensions, renewals and modifications of
            the Note and all substitutions therefor. All terms and provisions of
            the Note are hereby incorporated herein.

                        2.4         Interest.

                                    2.4(a) Except as otherwise provided in
                        Section 2.4(e) hereof, the unpaid amount of each Advance
                        against an Eligible Loan shall bear interest at the
                        rate(s) per annum set forth on Exhibit M attached hereto
                        and made a part hereof.

                                    2.4(b) The Borrowers are entitled to receive
                        a benefit in the form of an "Earnings Credit" on the

                                       14

<PAGE>   21



                        portion of the Eligible Balances maintained in time
                        deposit accounts with a Designated Bank, and the
                        Borrowers are entitled to receive a benefit in the form
                        of an "Earnings Allowance" on the portion of the
                        Eligible Balances maintained in demand deposit accounts
                        with a Designated Bank. Any Earnings Allowance shall be
                        used first and any Earnings Credit shall be used second
                        as a credit against accrued Designated Bank Charges, any
                        other Miscellaneous Charges and fees, including, but not
                        limited to Commitment Fees, Non-Usage Fees and
                        Warehousing Fees, and may be used, at the Lender's
                        option, to reduce accrued interest. Any Earnings
                        Allowance not used during the month in which the benefit
                        was received shall be accumulated for use and must be
                        used within six (6) months of the month in which the
                        benefit was received. Any Earnings Credit not used
                        during the month in which the benefit was received shall
                        be used to provide a cash benefit to the Borrowers. The
                        Lender's determination of the Earnings Credit and the
                        Earnings Allowance for any month shall be determined by
                        the Lender in its sole discretion and shall be
                        conclusive and binding absent manifest error. In no
                        event shall the benefit received by the Borrowers exceed
                        the Depository Benefit.

                                    Either party hereto may terminate the
                        benefits provided for in this Section effective
                        immediately upon Notice to the other party, if the
                        terminating party shall have determined (which
                        determination shall be conclusive and binding absent
                        manifest error) at any time that any applicable law,
                        rule, regulation, order or decree or any interpretation
                        or administration thereof by any governmental authority
                        charged with the interpretation or administration
                        thereof, or compliance by such party with any request or
                        directive (whether or not having the force of law) of
                        any such authority, shall make it unlawful or impossible
                        for such party to continue to offer or receive the
                        benefits provided for in this Section.

                                    2.4(c) Interest shall be computed on the
                        basis of a 360-day year and applied to the actual number
                        of days elapsed in each interest calculation period and
                        shall be payable monthly in arrears, on the first day of
                        each month, commencing with the first month following
                        the Closing Date and on the Maturity Date.

                                    2.4(d) If, for any reason, no interest is
                        due on an Advance, the Borrowers agree to pay to the
                        Lender an administrative fee equal to one day of
                        interest on such Advance at the rate of interest
                        applicable to such Advance, as in effect on the date of
                        such Advance.

                                       15

<PAGE>   22

                        Administrative and other fees shall be due and payable
                        in the same manner as interest is due and payable
                        hereunder.

                                    2.4(e) Upon Notice to the Borrowers, after
                        the occurrence and during the continuation of an Event
                        of Default, the unpaid amount of each Advance shall bear
                        interest until paid in full at a per annum rate of
                        interest (the "Default Rate") equal to four percent (4%)
                        in excess of the rate of interest otherwise applicable
                        to such Advance pursuant to any other subsection of this
                        Section 2.4 or, if no rate is applicable, the highest
                        rate then applicable to any outstanding Advances.

                                    2.4(f) The floating rates of interest
                        provided for in this Section 2.4 will be adjusted as of
                        the effective date of each change in the applicable
                        index. The Lender's determination of such rates as of
                        any date of determination shall be conclusive and
                        binding, absent manifest error.

                        2.5 Principal Payments.

                                    2.5(a) The outstanding principal amount of
                        all Advances shall be payable in full on the Maturity
                        Date.

                                    2.5(b) The Borrowers shall have the right to
                        prepay the outstanding Advances in whole or in part,
                        from time to time, without premium or penalty.

                                    2.5(c) The Borrowers shall pay the Lender,
                        without the necessity of prior demand or notice from the
                        Lender, and the Borrowers authorize the Lender to cause
                        the Funding Bank to charge the Borrowers' Operating
                        Account for, the amount of any outstanding Advance
                        against a specific Pledged Mortgage, upon the earliest
                        occurrence of any of the following events:

                                                (1) One (1) Business Day elapses
                                    from the date an Advance was made and the
                                    Pledged Mortgage which was to have been
                                    funded by such Advance is not closed and
                                    funded.

                                                (2) Ten (10) Business Days
                                    elapse from the date a Collateral Document
                                    was delivered to the Borrowers for
                                    correction or completion under a Trust
                                    Receipt, if such Collateral Document has not
                                    been returned to the Lender.

                                                (3) On the date on which a
                                    Pledged Mortgage is determined to have been
                                    originated based on untrue, incomplete or
                                    inaccurate information, whether or not the
                                    Borrowers had knowledge of such

                                       16

<PAGE>   23



                                    misrepresentation or incorrect information,
                                    or the Pledged Mortgage is defaulted and
                                    remains in default for a period of sixty
                                    (60) days or more.

                                                (4) If the outstanding Advances
                                    against Pledged Mortgages of a specific
                                    Mortgage Loan type exceed the aggregate
                                    Purchase Commitments for such Mortgage Loan
                                    type.

                                                (5) For a Mortgage Loan covered
                                    by a Purchase Commitment at the time pledged
                                    hereunder three (3) Business Days after the
                                    mandatory delivery date of the related
                                    Purchase Commitment and the specific Pledged
                                    Mortgage or the Pledged Security backed
                                    thereby was not delivered under the Purchase
                                    Commitment prior to such mandatory delivery
                                    date, or the Purchase Commitment is
                                    terminated; unless in each case, such
                                    Pledged Mortgage or Pledged Security is
                                    eligible for delivery to an Investor under a
                                    comparable Purchase Commitment acceptable to
                                    the Lender.

                                                (6) Upon sale or other
                                    disposition of the Pledged Mortgage or, if a
                                    Pledged Mortgage is included in an Eligible
                                    Mortgage Pool, upon sale or other
                                    disposition of the related Agency
                                    Securities.

                                                (7) On the date on which the
                                    Borrowers know, or receive notice from the
                                    Lender, that one or more of the
                                    representations and warranties set forth in
                                    Section 5.15 were inaccurate or incomplete
                                    in any material respect on any date when
                                    made or deemed made.

                                    2.5(d) Upon Notice to the Borrowers by the
                        Lender, the Borrowers shall pay to the Lender, and the
                        Borrowers authorize the Lender to cause the Funding Bank
                        to charge the Borrowers' Operating Account for, the
                        amount of any outstanding Advance against a specific
                        Pledged Mortgage upon the earliest occurrence of any of
                        the following events:

                                                (1) For any Pledged Mortgage,
                                    the number of days set forth for the
                                    applicable type of Eligible Loan on Exhibit
                                    M attached hereto and made a part hereof as
                                    the "Warehouse Period" elapse from the date
                                    of the initial Advance made by the Lender
                                    against such Pledged Mortgage.

                                                (2) For any Pledged Mortgage
                                    secured by a Second Mortgage, payment of any
                                    Lien prior to such

                                       17

<PAGE>   24

                                    Pledged Mortgage is delinquent, and remains
                                    delinquent for a period of sixty (60) days
                                    or more.

                                                (3) Forty-five (45) days elapse
                                    from the date the Pledged Mortgage was
                                    delivered to an Investor or an Approved
                                    Custodian for examination and purchase or
                                    inclusion in a Mortgage Pool, without the
                                    purchase being made or an Eligible Mortgage
                                    Pool being initially certified, or upon
                                    rejection of the Pledged Mortgage as
                                    unsatisfactory by an Investor or an Approved
                                    Custodian.

                                                (4) Seven (7) Business Days
                                    elapse from the date a Wet Settlement
                                    Advance was made without receipt by the
                                    Lender of all Collateral Documents relating
                                    to such Pledged Mortgage, or such Collateral
                                    Documents, upon examination by the Lender,
                                    are found not to be in compliance with the
                                    requirements of this Agreement or the
                                    related Purchase Commitment.

                                                (5) With respect to any Pledged
                                    Mortgage, any of the items described in
                                    Section 2.2(d), upon examination by the
                                    Lender, are found not to be in compliance
                                    with the requirements of this Agreement or
                                    the related Purchase Commitment.

                                    2.5(e) The outstanding amount of any Advance
                        made pursuant to Section 2.2(f) shall be payable in full
                        within one (1) Business Day after the date of such
                        Advance.

                                    2.5(f) In addition to the payments required
                        pursuant to Sections 2.5(d) and 2.5(e), if the principal
                        amount of any Pledged Mortgage is prepaid in whole or in
                        part while an Advance is outstanding against such
                        Pledged Mortgage, the Borrowers shall be obligated to
                        pay to the Lender, without the necessity of prior demand
                        or notice from the Lender, and the Borrowers authorizes
                        the Lender to cause the Funding Bank to charge the
                        Borrowers' Operating Account for the amount of such
                        prepayment, to be applied to such Advance.

                                    2.5(g) The proceeds of the sale or other
                        disposition of Pledged Mortgages and Pledged Securities
                        shall be paid directly by the Investor to the Cash
                        Collateral Account. The Borrowers shall give Notice to
                        the Lender (telephonically, to be followed by written
                        notice) of the Pledged Mortgages or Pledged Securities
                        for which proceeds have been received. Upon receipt of
                        such Notice the Advances against such Pledged Mortgages
                        or Pledged Securities shall be repaid from such proceeds

                                       18

<PAGE>   25



                        and such Pledged Mortgages or Pledged Securities shall
                        be considered to have been redeemed from pledge. The
                        Lender is entitled to rely upon the Borrowers'
                        affirmation that deposits in the Cash Collateral Account
                        represent payment from Investors for the purchase of
                        Pledged Mortgages or Pledged Securities as specified by
                        the Borrowers. In the event that the payment from an
                        Investor for the purchase of Pledged Mortgages or
                        Pledged Securities is less than the outstanding Advances
                        against such Pledged Mortgages or the Mortgage Loans
                        backing Pledged Securities, the Lender is authorized to
                        cause the Funding Bank to charge the Borrowers'
                        Operating Account for an amount equal to such
                        deficiency. Provided no Default or Event of Default
                        exists, the Lender shall return any excess payment from
                        an Investor for Pledged Mortgages or Pledged Securities
                        to the Borrowers.

                        2.6 Expiration of Commitment. The Commitment shall
            expire on the Maturity Date.


                        2.7 Method of Making Payments.

                                    2.7(a) Except as otherwise specifically
                        provided herein, all payments hereunder shall be made to
                        the Lender not later than the close of business on the
                        date when due unless such date is a non-Business Day, in
                        which case, such payment shall be due on the first
                        Business Day thereafter, and shall be made in lawful
                        money of the United States of America in immediately
                        available funds transferred via wire to accounts
                        designated by the Lender from time to time.

                                    2.7(b) After the occurrence and during the
                        continuance of an Event of Default, and without the
                        necessity of prior demand or notice from the Lender, the
                        Borrowers authorize the Lender to cause the Funding Bank
                        to charge the Borrowers' Operating Account for any
                        Obligations due and owing the Lender.

                        2.8 Commitment Fees and Non-Usage Fees.

                                    2.8(a) The Borrowers agree to pay to the
                        Lender a Commitment Fee in the amount of 0.125% per
                        annum of the Commitment Amount which Commitment Fee
                        shall be paid in advance on the Closing Date.

                                    2.8(b) At the end of each calendar quarter,
                        during the term hereof, the Lender shall determine the
                        average usage of the Commitment by calculating the
                        arithmetic daily average of the Advances outstanding
                        during such calendar quarter (or, during the first such


                                       19

<PAGE>   26

                        calendar quarter, from the Closing Date through the end
                        of such calendar quarter). The Lender shall then
                        subtract such quarterly average usage (the "Used
                        Portion") from the Commitment Amount (and the result
                        thereof shall be known as the "Unused Portion"). If the
                        Unused Portion is greater than 50% of the Commitment
                        Amount, the Borrowers shall pay in arrears, within
                        thirty (30) days after the end of each calendar quarter,
                        a Non-Usage Fee (the "Non-Usage Fee") equal to 0.125%
                        per annum on the total amount of the Unused Portion of
                        the Commitment Amount during such calendar quarter. If
                        the Maturity Date of the Commitment is other than the
                        last day of a quarter, the Borrowers shall pay the
                        prorated portion of the quarterly Non-Usage Fee due from
                        the beginning of the then current calendar quarter to
                        and including the Maturity Date. For the purposes
                        hereof, quarters shall be defined as beginning April 1,
                        July 1, October 1 and January 1. In the absence of
                        manifest error, the calculation by the Lender of the
                        amount of any Non-Usage Fee shall be conclusive. If the
                        Commitment terminates at the request of the Borrowers or
                        as a result of an Event of Default, the Non-Usage Fee
                        shall be due and owing through the last day of the
                        current quarter.

                        2.9 Warehousing Fees. The Borrowers agree, at the time
            of each Advance, to pay to the Lender a Warehousing Fee in the
            amount of Twenty-Two Dollars ($22.00) for each Mortgage Loan pledged
            as Collateral for such Advance. Warehousing Fees are due when
            incurred, but shall not be delinquent if paid within fifteen (15)
            days after receipt of an invoice or an account analysis statement
            from the Lender.

                        2.10 Miscellaneous Charges. The Borrowers agree to
            reimburse the Lender for miscellaneous charges and expenses
            (collectively, "Miscellaneous Charges") incurred by or on behalf of
            the Lender in connection with the handling and administration of
            Advances, and to reimburse the Lender for Miscellaneous Charges
            incurred by or on behalf of the Lender in connection with the
            handling and administration of the Collateral. For the purposes
            hereof, Miscellaneous Charges shall include, but not be limited to,
            costs for UCC, tax lien and judgment searches conducted by the
            Lender, filing fees, charges for wire transfers, check processing
            charges, charges for security delivery fees, charges for overnight
            delivery of Collateral to Investors, the Funding Bank's service
            charges and Designated Bank Charges. Miscellaneous Charges are due
            when incurred, but shall not be delinquent if paid within fifteen
            (15) days after receipt of an invoice or an account analysis
            statement from the Lender.

                        2.11 Interest Limitation.  All agreements between the
            Borrowers and the Lender are hereby expressly limited so that

                                       20

<PAGE>   27

            in no contingency or event whatsoever, whether by reason of
            acceleration of maturity of this Agreement or the Note or otherwise,
            shall the amount paid or agreed to be paid to the Lender for the
            use, forbearance, loaning or retention of the Advances secured by
            this Agreement exceed the maximum permissible under applicable law.
            If from any circumstances whatsoever, fulfillment of any provisions
            hereof or of the Note, or any other document securing this Agreement
            at any time given shall involve transcending the limit of validity
            prescribed by law, then, the obligation to be fulfilled shall
            automatically be reduced to the limit of such validity, and if from
            any circumstances the Lender should ever receive as interest an
            amount which would exceed the highest lawful rate of interest, such
            amount which would be in excess of interest shall be applied to the
            reduction of the principal balance secured by the Note and not to
            the payment of interest thereunder. This provision shall control
            every other provision of all agreements between the Borrowers and
            Lender and shall also be binding upon and available to any
            subsequent holder of the Note.

                        2.12 Increased Costs; Capital Requirements. In the event
            any applicable law, order, regulation or directive issued by any
            governmental or monetary authority, or any change therein or in the
            governmental or judicial interpretation or application thereof, or
            compliance by the Lender with any request or directive (whether or
            not having the force of law) by any governmental or monetary
            authority:

                                    2.12(a) Does or shall subject the Lender to
                        any tax of any kind whatsoever with respect to this
                        Agreement or any Advances made hereunder, or change the
                        basis of taxation on payments to the Lender of
                        principal, fees, interest or any other amount payable
                        hereunder (except for change in the rate of tax on the
                        overall gross or net income of the Lender by the
                        jurisdiction in which the Lender's principal office is
                        located);

                                    2.12(b) Does or shall impose, modify or hold
                        applicable any reserve, capital requirement, special
                        deposit, compulsory loan or similar requirement against
                        assets held by, or deposits or other liabilities in or
                        for the account of, advances or loans by, or other
                        credit extended by, or any other acquisition of funds
                        by, any office of the Lender which are not otherwise
                        included in the determination of the interest rate as
                        calculated hereunder;

            and the result of any of the foregoing is to increase the cost to
            the Lender of making, renewing or maintaining any Advance or to
            reduce any amount receivable in respect thereof or to reduce the
            rate of return on the capital of the Lender or any



                                       21

<PAGE>   28

            Person controlling the Lender as it relates to credit facilities in
            the nature of that evidenced by this Agreement, then, in any such
            case, the Borrowers shall promptly pay any additional amounts
            necessary to compensate the Lender for such additional cost or
            reduced amounts receivable or reduced rate of return as determined
            by the Lender with respect to this Agreement or Advances made
            hereunder. If the Lender becomes entitled to claim any additional
            amounts pursuant to this Section, it shall notify the Borrowers in
            writing of the event by reason of which it has become so entitled
            and the Borrowers shall pay such amount within fifteen (15) days
            thereafter. A certificate as to any additional amount payable
            pursuant to the foregoing sentence containing the calculation
            thereof in reasonable detail submitted by the Lender to the
            Borrowers shall be conclusive in the absence of manifest error. The
            obligations of the Borrowers under this Section shall survive the
            payment of all other Obligations and the termination of this
            Agreement.

3.          COLLATERAL.

                        3.1 Grant of Security Interest. As security for the
            payment of the Note and for the performance of all of the Borrowers'
            Obligations, the Borrowers hereby assign and transfer to the Lender
            all right, title and interest in and to and grants a security
            interest to the Lender in the following described property (the
            "Collateral"):

                                    3.1(a) All Mortgage Loans, including all
                        Mortgage Notes and Mortgages evidencing or securing such
                        Mortgage Loans, which from time to time are delivered or
                        caused to be delivered to the Lender (including delivery
                        to a third party on behalf of the Lender), come into the
                        possession, custody or control of the Lender for the
                        purpose of assignment or pledge or in respect of which
                        an Advance has been made by the Lender hereunder,
                        including without limitation all Mortgage Loans in
                        respect of which Wet Settlement Advances have been made
                        by the Lender (the "Pledged Mortgages").

                                    3.1(b) All Mortgage-backed Securities which
                        are from time to time created in whole or in part on the
                        basis of the Pledged Mortgages or are delivered or
                        caused to be delivered to, or are otherwise in the
                        possession of the Lender or its agent, bailee or
                        custodian as assignee, or pledged to the Lender, or for
                        such purpose are registered by book-entry in the name of
                        the Lender (including delivery to or registration in the
                        name of a third party on behalf of the Lender) hereunder
                        or in respect of which from time to time an Advance has
                        been made by the Lender hereunder (the "Pledged
                        Securities").


                                       22

<PAGE>   29

                                    3.1(c) All private mortgage insurance and
                        all commitments issued by the FHA or VA to insure or
                        guarantee any Mortgage Loans included in the Pledged
                        Mortgages; all Purchase Commitments held by the
                        Borrowers covering the Pledged Mortgages or the Pledged
                        Securities and all proceeds resulting from the sale
                        thereof to Investors pursuant thereto; and all personal
                        property, contract rights, servicing and servicing fees
                        and income or other proceeds, amounts and payments
                        payable to the Borrowers as compensation or
                        reimbursement, accounts and general intangibles of
                        whatsoever kind relating to the Pledged Mortgages, the
                        Pledged Securities, said FHA commitments or VA
                        commitments and the Purchase Commitments, and all other
                        documents or instruments relating to the Pledged
                        Mortgages and the Pledged Securities, including, without
                        limitation, any interest of the Borrowers in any fire,
                        casualty or hazard insurance policies and any awards
                        made by any public body or decreed by any court of
                        competent jurisdiction for a taking or for degradation
                        of value in any eminent domain proceeding as the same
                        relate to the Pledged Mortgages.

                                    3.1(d) All right, title and interest of the
                        Borrowers in and to all escrow accounts, documents,
                        instruments, files, surveys, certificates,
                        correspondence, appraisals, computer programs, tapes,
                        discs, cards, accounting records (including all
                        information, records, tapes, data, programs, discs and
                        cards necessary or helpful in the administration or
                        servicing of the Collateral) and other information and
                        data of the Borrowers relating to the Collateral.

                                    3.1(e) All right, title and interest of the
                        Borrowers in and to any Hedging Arrangements entered
                        into to protect the Borrowers against changes in the
                        value of Pledged Mortgages or Pledged Securities,
                        including, without limitation, all rights to payment
                        arising under such Hedging Arrangements.

                                    3.1(f) All now existing or hereafter
                        acquired cash delivered to or otherwise in the
                        possession of the Lender or its agent, bailee or
                        custodian or designated on the books and records of the
                        Borrowers as assigned and pledged to the Lender.

                                    3.1(g) All cash and non-cash proceeds of the
                        Collateral, including all dividends, distributions and
                        other rights in connection with, and all additions to,
                        modifications of and replacements for, the Collateral,
                        and all products and proceeds of the Collateral,
                        together with whatever is receivable or received when
                        the Collateral or proceeds thereof are sold, collected,



                                       23

<PAGE>   30

                        exchanged or otherwise disposed of, whether such
                        disposition is voluntary or involuntary, including,
                        without limitation, all rights to payment with respect
                        to any cause of action affecting or relating to the
                        Collateral or proceeds thereof.

                        3.2 Release of Security Interest in Collateral.

                                    3.2(a) Pledged Mortgages shall be released
                        from the Lender's security interest only against payment
                        to the Lender of the Release Amount in connection with
                        such Pledged Mortgages.

                                    3.2(b) If Pledged Mortgages are to be
                        transferred to a pool custodian or to Freddie Mac or
                        Fannie Mae for inclusion in a Mortgage Pool, the
                        Lender's security interest in such Pledged Mortgages
                        shall be released only against payment to the Lender of
                        the Release Amount in connection with such Pledged
                        Mortgages. If the Lender's security interest in the
                        Pledged Mortgages comprising the Mortgage Pool is not
                        released prior to the issuance of the Mortgage-backed
                        Security, then the Mortgage-backed Security, when
                        issued, shall be a Pledged Security. The Lender's
                        security interest shall continue in such Pledged
                        Mortgages and the Pledged Security. The Lender shall be
                        entitled to possession of such Pledged Security in the
                        manner provided below.

                                    3.2(c) If Pledged Mortgages are transferred
                        to an Approved Custodian and included in an Eligible
                        Mortgage Pool, the Lender's security interest in the
                        Pledged Mortgages comprising the Eligible Mortgage Pool
                        shall be released upon the issuance of the Agency
                        Security, which shall be a Pledged Security. The
                        Lender's security interest in such Pledged Security
                        shall be released only against payment to the Lender of
                        the Release Amount in connection with the Pledged
                        Mortgages backing such Pledged Security. The Lender
                        shall be entitled to possession of such Pledged Security
                        in the manner provided below.

                                    3.2(d) The Lender shall have the exclusive
                        right to the possession of the Pledged Securities or, if
                        the Pledged Securities are issued in book-entry form or
                        issued in certificated form and delivered to a clearing
                        corporation (as such term is defined in the Uniform
                        Commercial Code of Minnesota) or its nominee, the Lender
                        shall have the right to have the Pledged Securities
                        registered in the name of a securities intermediary (as
                        such term is defined in the Uniform Commercial Code of
                        Minnesota) in an account containing only customer
                        securities and credited to an account of the Lender. The

                                       24

<PAGE>   31



                        Lender shall have the right to cause delivery of the
                        Pledged Securities to be made to the Investor or the
                        Pledged Securities credited to the account of the
                        Investor or the Investor's designee only against payment
                        therefor. The Borrowers acknowledge that the Lender may
                        enter into one or more standing arrangements with other
                        financial institutions with respect to Pledged
                        Securities issued in book entry form or issued in
                        certificated form and delivered to a clearing
                        corporation, pursuant to which such Pledged Securities
                        are registered in the name of such financial
                        institution, as agent or securities intermediary for the
                        Lender, and the Borrowers agree upon request of the
                        Lender to execute and deliver to such other financial
                        institutions the Borrowers' written concurrence in any
                        such standing arrangements.

                                    3.2(e) Prior to the occurrence of an Event
                        of Default, the Borrowers may redeem a Pledged Mortgage
                        or Pledged Security from the Lender's security interest
                        by notifying the Lender of its intention to redeem such
                        Pledged Mortgage or Pledged Security from pledge and
                        either (a) paying, or causing an Investor to pay, to the
                        Lender, for application to prepayment of the principal
                        balance of the Note, the Release Amount in connection
                        with such Pledged Mortgage or Pledged Security, or (b)
                        delivering substitute Collateral which, in addition to
                        being acceptable to the Lender in its sole discretion
                        will, when included with the Collateral, result in a
                        Collateral Value of all Collateral held by the Lender
                        which is at least equal to the aggregate outstanding
                        Advances.

                                    3.2(f) Following the occurrence of a Default
                        or Event of Default, the Lender may, with no liability
                        to the Borrowers or any Person, continue to release its
                        security interest in any Pledged Mortgage or Pledged
                        Security against payment of the Release Amount in
                        connection with such Pledged Mortgage or Pledged
                        Security.

                                    3.2(g) The amount (the "Release Amount") to
                        be paid by the Borrowers to obtain the release of the
                        Lender's security interest in a Pledged Mortgage shall
                        be (i) prior to the occurrence of an Event of Default,
                        the principal amount of the Advances made against such
                        Pledged Mortgage, and (ii) from and after the occurrence
                        and during the continuance of an Event of Default, the
                        Committed Purchase Price of such Pledged Mortgage or, if
                        there is no Purchase Commitment therefor, the amount
                        paid to the Lender in a commercially reasonable
                        disposition thereof.


                                       25

<PAGE>   32



                        3.3 Mark-to-Market. If at any time the aggregate
            outstanding principal balance of Advances made against uncommitted
            Subprime First Mortgage Loans exceeds ninety-eight percent (98%) of
            the Fair Market Value or Advances made against uncommitted Subprime
            Second Mortgage Loans exceeds ninety-five percent (95%) of the Fair
            Market Value of the Pledged Mortgages and Pledged Securities, then
            pledged hereunder, the Borrowers shall within two (2) Business Days
            after Notice by the Lender either (a) repay the Advances made
            against uncommitted Subprime First Mortgage Loans and uncommitted
            Subprime Second Mortgage Loans in an amount sufficient to reduce the
            aggregate principal balance thereof to or below ninety-eight percent
            (98%) and ninety-five percent (95%), respectively, of the Fair
            Market Value of such Pledged Mortgages and Pledged Securities or (b)
            pledge to the Lender additional Mortgage Loans owned by the
            Borrowers, or other property of a type and with a value satisfactory
            to the Lender in its sole discretion, with a Fair Market Value
            sufficient to increase the Fair Market Value of the Pledged
            Mortgages, the Pledged Securities and such other assets to any
            amount such that ninety-eight percent (98%) and ninety-five percent
            (95%), of the aggregate principal balance of Advances made against
            uncommitted Subprime First Mortgage Loans and uncommitted Subprime
            Second Mortgage Loans, respectively, does not exceed such Fair
            Market Value. The Borrowers authorize the Lender, without the
            requirement of prior demand or notice from the Lender, to cause the
            Funding Bank to charge the Borrowers' accounts for the amount of any
            prepayment required under this Section 3.3. Such prepayments shall
            be applied first, to the Advances made against uncommitted Subprime
            Second Mortgage Loans, and second, to the Advances made against
            uncommitted Subprime First Mortgage Loans, ratably in accordance
            with the outstanding principal balance of each Advance made against
            uncommitted Subprime First Mortgage Loans. The Lender may at any
            time, and shall no less frequently than once each month, calculate
            the Fair Market Value of the Pledged Mortgages and Pledged
            Securities, and the Borrowers shall provide to the Lender such
            information concerning the Pledged Mortgages and the Pledged
            Securities as the Lender may request in connection with such
            calculation.

                        3.4 Delivery of Additional Collateral or Mandatory
            Prepayment. At any time that the aggregate Collateral Value of the
            Pledged Mortgages and Pledged Securities then pledged hereunder is
            less than the aggregate amount of the Advances then outstanding
            hereunder, the Lender may request, and the Borrowers shall within
            two (2) Business Days after Notice by the Lender (a) deliver to the
            Lender for pledge hereunder additional Mortgage Loans, and/or cash,
            at the Borrower's option, with a Collateral Value sufficient to
            cover the difference between the Collateral Value of the Pledged
            Mortgages and Pledged Securities pledged and the aggregate

                                       26

<PAGE>   33



            amount of Advances outstanding hereunder, and/or (b) repay the
            Advances in an amount sufficient to reduce the aggregate balance
            thereof outstanding to or below the Collateral Value of the Pledged
            Mortgages and Pledged Securities pledged hereunder.

                        3.5         Release of Collateral.

                                    3.5(a) The Lender may deliver documents
                        relating to the Collateral to the Borrowers for
                        correction or completion pursuant to a Trust Receipt.

                                    3.5(b) Prior to the occurrence of a Default
                        or Event of Default, upon delivery by the Borrowers to
                        the Lender of shipping instructions pursuant to Exhibit
                        D-SF, the Lender will promptly transmit Pledged
                        Mortgages or Pledged Securities and all related loan
                        documents or pool documents to the applicable Investor,
                        Approved Custodian or other party.

                                    3.5(c) Upon receipt of Notice from the
                        Borrowers under Section 2.5(g) hereof, and repayment of
                        the Release Amount with respect to a Pledged Mortgage
                        identified by the Borrowers, any Collateral Documents
                        relating to the redeemed Pledged Mortgage or Mortgage
                        Loan backing a Pledged Security which have not been
                        delivered to an Investor or Approved Custodian shall
                        promptly be released by the Lender to the Borrowers.

                        3.6 Collection and Servicing Rights. So long as no Event
            of Default shall have occurred and be continuing, the Borrowers
            shall be entitled to service and receive and collect directly all
            sums payable to the Borrowers in respect of the Collateral other
            than proceeds of any Purchase Commitment or proceeds of the sale of
            any Collateral. Following the occurrence of any Event of Default,
            the Lender or its designee shall thereafter be entitled to service
            and receive and collect all sums payable to the Borrowers in respect
            of the Collateral, and in such case (a) the Lender or its designee
            in its discretion may, in its own name, in the name of the Borrowers
            or otherwise, demand, sue for, collect or receive any money or
            property at any time payable or receivable on account of or in
            exchange for any of the Collateral, but shall be under no obligation
            to do so, (b) the Borrowers shall, if the Lender so requests, hold
            in trust for the benefit of the Lender and forthwith pay to the
            Lender at its office designated by Notice hereunder, all amounts
            thereafter received by the Borrowers upon or in respect of any of
            the Collateral, advising the Lender as to the source of such funds,
            and (c) all amounts so received and collected by the Lender shall be
            held by it as part of the Collateral.

                                       27

<PAGE>   34

                        3.7 Return of Collateral at End of Commitment.  If (a)
            the Commitment shall have expired or been terminated, and (b)
            no Advances, interest or other Obligations shall be
            outstanding and unpaid, the Lender shall deliver or release
            its security interest and shall deliver all Collateral in its
            possession to the Borrowers at the Borrowers' expense.  The
            receipt of the Borrowers for any Collateral released or
            delivered to the Borrowers pursuant to any provision of this
            Agreement shall be a complete and full acquittance for the
            Collateral so returned, and the Lender shall thereafter be
            discharged from any liability or responsibility therefor.

4.          CONDITIONS PRECEDENT.

                        4.1 Initial Advance. The obligation of the Lender to
            make the initial Advance under this Agreement is subject to the
            satisfaction, in the sole discretion of the Lender, on or before the
            date thereof of the following conditions precedent:

                                    4.1(a) The Lender shall have received the
                        following, all of which must be satisfactory in form and
                        content to the Lender, in its sole discretion:

                                                (1) The Note and this Agreement
                                    duly executed by the Borrowers.

                                                (2) BNC's articles of
                                    incorporation as certified by the Secretary
                                    of State of BNC's incorporation, bylaws
                                    certified by the corporate secretary of BNC,
                                    and certificates of good standing dated no
                                    less recently than ninety (90) days prior to
                                    the date of this Agreement and a
                                    certification from the Franchise Tax Board
                                    of the State of California stating that BNC
                                    is in good standing with the Franchise Tax
                                    Board.

                                                (3) A resolution of the board of
                                    directors of BNC, certified as of the date
                                    of this Agreement by its corporate
                                    secretary, authorizing the execution,
                                    delivery and performance of this Agreement
                                    and the other Loan Documents, and all other
                                    instruments or documents to be delivered by
                                    BNC pursuant to this Agreement.

                                                (4) A certificate of BNC's
                                    corporate secretary as to the incumbency and
                                    authenticity of the signatures of the
                                    officers of BNC executing this Agreement and
                                    the other Loan Documents and each Advance
                                    Request and all other instruments or
                                    documents to be delivered pursuant hereto
                                    (the


                                       28

<PAGE>   35



                                    Lender being entitled to rely thereon until
                                    a new such certificate has been furnished to
                                    the Lender).

                                                (5) Financial statements of BNC
                                    and its Subsidiaries, on a consolidated and
                                    consolidating basis containing a balance
                                    sheet as of June 30, 1998, and related
                                    statements of income, changes in
                                    stockholders' equity and cash flows for the
                                    period ended on such date, all prepared in
                                    accordance with GAAP applied on a basis
                                    consistent with prior periods and audited by
                                    independent certified public accountants of
                                    recognized standing acceptable to the
                                    Lender.

                                                (6) Financial statements of BNC
                                    and its Subsidiaries, on a consolidated and
                                    consolidating basis containing a balance
                                    sheet as of   , related statements of income
                                    and changes in stockholders' equity for the
                                    period ended on such date prepared in
                                    accordance with GAAP applied on a basis
                                    consistent with the BNC's most recent
                                    audited financial statements.

                                                (7) Mortgage Logic's articles of
                                    incorporation as certified by the Secretary
                                    of State of the Mortgage Logic's
                                    incorporation, bylaws certified by the
                                    corporate secretary of Mortgage Logic, and
                                    certificates of good standing dated no less
                                    recently than ninety (90) days prior to the
                                    date of this Agreement and a certification
                                    from the Franchise Tax Board of the State of
                                    California stating that Mortgage Logic is in
                                    good standing with the Franchise Tax Board.

                                                (8) A resolution of the board of
                                    directors of Mortgage Logic, certified as of
                                    the date of this Agreement by its corporate
                                    secretary, authorizing the execution,
                                    delivery and performance of this Agreement
                                    and the other Loan Documents, and all other
                                    instruments or documents to be delivered by
                                    Mortgage Logic pursuant to this Agreement.

                                                (9) A certificate of Mortgage
                                    Logic's corporate secretary as to the
                                    incumbency and authenticity of the
                                    signatures of the officers of Mortgage Logic
                                    executing this Agreement and the other Loan
                                    Documents and each Advance Request and all
                                    other instruments or documents to be
                                    delivered pursuant hereto (the Lender being
                                    entitled to rely thereon until a new such
                                    certificate has been furnished to the
                                    Lender).


                                       29

<PAGE>   36



                                                (10) A favorable written opinion
                                    of counsel to BNC and Mortgage Logic (or of
                                    separate counsel at the option of BNC and
                                    Mortgage Logic), dated as of the date of
                                    this Agreement substantially in the form of
                                    Exhibit H attached hereto, addressed to the
                                    Lender.

                                                (11) A Uniform Commercial Code,
                                    tax lien and judgment searches of the
                                    appropriate public records for BNC and
                                    Mortgage Logic, which search shall not have
                                    disclosed the existence of any prior Lien on
                                    the Collateral other than in favor of the
                                    Lender or as permitted hereunder.

                                                (12) Copies of the certificates,
                                    documents or other written instruments which
                                    evidence the Borrowers' eligibility
                                    described in Section 5.13 hereof, all in
                                    form and substance satisfactory to the
                                    Lender.

                                                (13) Copies of the Borrowers'
                                    errors and omissions insurance policy or
                                    mortgage impairment insurance policy and
                                    blanket bond coverage policy, or
                                    certificates in lieu of policies, all in
                                    form and content satisfactory to the Lender,
                                    showing compliance by the Borrowers as of
                                    the date of this Agreement with the related
                                    provisions of Section 6.8 hereof.

                                                (14) Executed financing
                                    statements in recordable form covering the
                                    Collateral and ready for filing in all
                                    jurisdictions required by the Lender.

                                                (15) Receipt by the Lender of
                                    any fees due on the date hereof, including,
                                    but not limited to, Commitment Fees and
                                    document production fees.

                                                (16) Evidence that all accounts
                                    necessary into which Advances will be funded
                                    have been established at the Funding Bank
                                    and receipt of a fully executed Funding Bank
                                    Agreement.

                                                (17) An agreement among the
                                    Borrowers, the Lender and Fannie Mae,
                                    pursuant to which Fannie Mae agrees to send
                                    all cash proceeds of Mortgage Loans sold by
                                    the Borrowers to Fannie Mae to the Cash
                                    Collateral Account.

                                    4.1(b) All directors, officers and
                        shareholders of the Borrowers, all Affiliates of the
                        Borrowers or of any Subsidiary of BNC or Mortgage Logic,
                        to whom or to

                                       30

<PAGE>   37



                        any of whom the Borrowers shall be indebted as of the
                        date of this Agreement, which indebtedness has a term of
                        more than one (1) year or is in excess of One Hundred
                        Thousand Dollars ($100,000) shall have subordinated such
                        indebtedness to the Obligations, by executing a
                        Subordination of Debt Agreement, in the form of Exhibit
                        F hereto; and the Lender shall have received an executed
                        copy of any such Subordination of Debt Agreement,
                        certified by the corporate secretary of the each
                        Borrower to be true and complete and in full force and
                        effect as of the date of the Advance.

                        4.2 Each Advance. The obligation of the Lender to make
            the initial and each subsequent Advance under this Agreement is
            subject to the satisfaction, in the sole discretion of the Lender,
            as of the date of each such Advance, of the following additional
            conditions precedent:

                                    4.2(a) The Borrowers shall have delivered to
                        the Lender the Advance Request, Collateral Documents,
                        and documents relating to Wet Settlement Advances,
                        called for under, and shall have satisfied the
                        procedures set forth in, Section 2.2 hereof and the
                        applicable Exhibits hereto described in that Section,
                        according to the type of the requested Advance. All
                        items delivered to the Lender shall be satisfactory to
                        the Lender in form and content, and the Lender may
                        reject such of them as do not meet the requirements of
                        this Agreement or of the related Purchase Commitment.

                                    4.2(b) The Lender shall have received
                        evidence satisfactory to it as to the making and/or
                        continuation of any book entry or the due filing and
                        recording in all appropriate offices of all financing
                        statements and other instruments as may be necessary to
                        perfect the security interest of the Lender in the
                        Collateral under the Uniform Commercial Code or other
                        applicable law.

                                    4.2(c) The representations and warranties of
                        the Borrowers contained in Article 5 hereof shall be
                        accurate and complete in all material respects as if
                        made on and as of the date of each Advance.

                                    4.2(d) The Borrowers shall have performed
                        all agreements to be performed by it hereunder, and
                        after giving effect to the requested Advance, there
                        shall exist no Default or Event of Default hereunder.

                                    4.2(e) The Borrowers shall not have incurred
                        any material liabilities, direct or contingent, other
                        than in the ordinary course of its business, since the
                        Statement Date.

                                       31

<PAGE>   38



                                    4.2(f) The Lender shall have received from
                        counsel for the Borrowers, if requested by the Lender in
                        its sole discretion, an updated opinion, in form and
                        substance satisfactory to the Lender, addressed to the
                        Lender and dated as of the date of such Advance,
                        covering such of the matters as the Lender may
                        reasonably request.

                        Delivery of an Advance Request by the Borrowers shall be
            deemed a representation by the Borrowers that all conditions set
            forth in this Section 4.2 shall have been satisfied as of the date
            of such Advance.

5.          REPRESENTATIONS AND WARRANTIES.

                        The Borrowers hereby represent and warrant to the
            Lender, as of the date of this Agreement and as of the date of each
            Advance Request and the making of each Advance, that:

                        5.1 Organization; Good Standing; Subsidiaries.  Each of
            the Borrowers and each Subsidiary of the Borrowers is a
            corporation duly organized, validly existing and in good
            standing under the laws of the jurisdiction of its
            incorporation, has the full legal power and authority to own
            its property and to carry on its business as currently
            conducted and is duly qualified as a foreign corporation to do
            business and is in good standing in each jurisdiction in which
            the transaction of its business makes such qualification
            necessary, except in jurisdictions, if any, where a failure to
            be in good standing has no material adverse effect on the
            business, operations, assets or financial condition of the
            Borrowers or any such Subsidiary.  For the purposes hereof,
            good standing shall include qualification for any and all
            licenses and payment of any and all taxes required in the
            jurisdiction of its incorporation and in each jurisdiction in
            which the Borrowers transacts business.  The Borrowers have no
            Subsidiaries except as set forth on Exhibit G hereto.  Exhibit
            G sets forth with respect to each such Subsidiary, its name,
            address, place of incorporation, each state in which it is
            qualified as a foreign corporation, and the percentage
            ownership of its capital stock by the Borrowers.

                        5.2 Authorization and Enforceability. The Borrowers have
            the power and authority to execute, deliver and perform this
            Agreement, the Note and all other Loan Documents to which the
            Borrowers are a party and to make the borrowings hereunder. The
            execution, delivery and performance by the Borrowers of this
            Agreement, the Note and all other Loan Documents to which the
            Borrowers are a party and the making of the borrowings hereunder and
            thereunder, have been duly and validly authorized by all necessary
            corporate action on the part of the Borrowers (none of which actions
            has been modified

                                       32

<PAGE>   39



            or rescinded, and all of which actions are in full force and effect)
            and do not and will not conflict with or violate any provision of
            law, of any judgments binding upon the Borrowers, or of the articles
            of incorporation or by-laws of the Borrowers, conflict with or
            result in a breach of or constitute a default or require any consent
            under, or result in the creation of any Lien upon any property or
            assets of the Borrowers other than the Lien on the Collateral
            granted hereunder, or result in or require the acceleration of any
            indebtedness of the Borrowers pursuant to any agreement, instrument
            or indenture to which the Borrowers are a party or by which the
            Borrowers or their property may be bound or affected. This
            Agreement, the Note and all other Loan Documents contemplated hereby
            or thereby constitute legal, valid, and binding obligations of the
            Borrowers or of the Guarantor, respectively, enforceable in
            accordance with their respective terms, except as limited by
            bankruptcy, insolvency or other such laws affecting the enforcement
            of creditors' rights and by general principles of equity.

                        5.3 Approvals. The execution and delivery of this
            Agreement, the Note and all other Loan Documents and the performance
            of the Borrowers' obligations hereunder and thereunder and the
            validity and enforceability hereof and thereof do not require any
            license, consent, approval or other action of any state or federal
            agency or governmental or regulatory authority other than those
            which have been obtained and remain in full force and effect.

                        5.4 Financial Condition. The balance sheet of BNC and
            its Subsidiaries, on a consolidated and consolidating basis, as of
            the Statement Date, and the related statements of income and changes
            in stockholders' equity for the fiscal period ended on the Statement
            Date, heretofore furnished to the Lender, fairly present the
            financial condition of BNC and its Subsidiaries as of the Statement
            Date and the results of its operations for the fiscal period ended
            on the Statement Date. The Borrowers had, on the Statement Date, no
            known material liabilities, direct or indirect, fixed or contingent,
            matured or unmatured, or liabilities for taxes, long-term leases or
            unusual forward or long-term commitments not disclosed by, or
            reserved against in, said balance sheet and related statements, and
            at the present time there are no material unrealized or anticipated
            losses from any loans, advances or other commitments of the
            Borrowers except as heretofore disclosed to the Lender in writing.
            Said financial statements were prepared in accordance with GAAP
            applied on a consistent basis throughout the periods involved. Since
            the Statement Date, there has been no material adverse change in the
            business, operations, assets or financial condition of the Borrowers
            (and their Subsidiaries), nor are the Borrowers aware of any state
            of facts which (with or without notice or


                                       33

<PAGE>   40



            lapse of time or both) would or could result in any such material
            adverse change.

                        5.5 Litigation. There are no actions, claims, suits or
            proceedings pending or, to the knowledge of the Borrowers,
            threatened or reasonably anticipated against or affecting the
            Borrowers or any Subsidiary of the Borrowers in any court or before
            any arbitrator or before any government commission, board, bureau or
            other administrative agency which, if adversely determined, may
            reasonably be expected to result in any material and adverse change
            in the business, operations, assets or financial condition of the
            Borrowers as a whole, or which would affect the validity or
            enforceability of this Agreement, the Note or any other Loan
            Document.

                        5.6 Compliance with Laws. Neither of the Borrowers and
            none of their Subsidiaries are in violation of any provision of any
            law, or of any judgment, award, rule, regulation, order, decree,
            writ or injunction of any court or public regulatory body or
            authority which might have a material adverse effect on the
            business, operations, assets or financial condition of the Borrowers
            and their Subsidiaries as a whole or which would affect the validity
            or enforceability of this Agreement, the Note or any other Loan
            Document.

                        5.7 Regulation U. The Borrowers are not engaged
            principally, or as one of its important activities, in the business
            of extending credit for the purpose of purchasing or carrying Margin
            Stock, and no part of the proceeds of any Advances made hereunder
            will be used to purchase or carry any Margin Stock or to extend
            credit to others for the purpose of purchasing or carrying any
            Margin Stock.

                        5.8 Investment Company Act. Neither of the Borrowers are
            an "investment company" or controlled by an "investment company"
            within the meaning of the Investment Company Act of 1940, as
            amended.

                        5.9 Payment of Taxes. The Borrowers and each of their
            Subsidiaries has filed or caused to be filed all federal, state and
            local income, excise, property and other tax returns with respect to
            the operations of the Borrowers and their Subsidiaries which are
            required to be filed, all such returns are true and correct, and the
            Borrowers and each of their Subsidiaries have paid or caused to be
            paid all taxes as shown on such returns or on any assessment, to the
            extent that such taxes have become due, including, but not limited
            to, all FICA payments and withholding taxes, if appropriate. The
            amounts reserved, as a liability for income and other taxes payable,
            in the financial statements described in Section 5.4 hereof are
            sufficient for payment of all unpaid federal, state and local
            income, excise, property and other taxes, whether or not


                                       34

<PAGE>   41



            disputed, of the Borrowers and their Subsidiaries accrued for or
            applicable to the period and on the dates of such financial
            statements and all years and periods prior thereto and for which
            either Borrower or any of their Subsidiaries may be liable in their
            own right or as transferee of the assets of, or as successor to, any
            other Person. No tax Liens have been filed and no material claims
            are being asserted with respect to any such taxes, fees or charges.

                        5.10 Agreements. Neither of the Borrowers and none of
            their Subsidiaries of the Borrowers are a party to any agreement,
            instrument or indenture or subject to any restriction materially and
            adversely affecting its business, operations, assets or financial
            condition, except as disclosed in the financial statements described
            in Section 5.4 hereof. Neither of the Borrowers and none of the
            Subsidiaries of the Borrowers are in default in the performance,
            observance or fulfillment of any of the obligations, covenants or
            conditions contained in any agreement, instrument, or indenture
            which default could have a material adverse effect on the business,
            operations, properties or financial condition of the Borrowers and
            their Subsidiaries as a whole. No holder of any material
            indebtedness of the Borrowers or any of their Subsidiaries has given
            notice of any asserted default thereunder, and no liquidation or
            dissolution of the Borrowers or of any of their Subsidiaries and no
            receivership, insolvency, bankruptcy, reorganization or other
            similar proceedings relative to the Borrowers or of any of their
            Subsidiaries or any of their properties is pending, or to the
            knowledge of the Borrowers, threatened.

                        5.11 Title to Properties. Each of the Borrowers and each
            Subsidiary of the Borrowers has good, valid, insurable (in the case
            of real property) and marketable title to all of its properties and
            assets (whether real or personal, tangible or intangible) reflected
            on the financial statements described in Section 5.4 hereof, except
            for such properties and assets as have been disposed of since the
            date of such financial statements as no longer used or useful in the
            conduct of its business or as have been disposed of in the ordinary
            course of business.

                        5.12 ERISA. All plans ("Plans") of a type described in
            Section 3(3) of ERISA in respect of which either of the Borrowers or
            any Subsidiary of the Borrowers is an "Employer," as defined in
            Section 3(5) of ERISA, are in substantial compliance with ERISA, and
            none of such Plans is insolvent or in reorganization, has an
            accumulated or waived funding deficiency within the meaning of
            Section 412 of the Internal Revenue Code, and none of the Borrowers
            and none of their Subsidiaries has incurred any material liability
            (including any material contingent liability) to or on account of
            any


                                       35

<PAGE>   42



            such Plan pursuant to Sections 4062, 4063, 4064, 4201 or 4204 of
            ERISA; and no proceedings have been instituted to terminate any such
            Plan, and no condition exists which presents a material risk to any
            of the Borrowers or any of their Subsidiaries of incurring a
            liability to or on account of any such Plan pursuant to any of the
            foregoing Sections of ERISA. No Plan or trust forming a part thereof
            has been terminated since September 1, 1974.

                        5.13 Eligibility. The Borrowers are approved and
            qualified and in good standing as a lender or seller/servicer, as
            set forth below, and meet all requirements applicable to their
            status as such:

                                    5.13(a) RFC approved seller/servicer of
                        Mortgage Loans, eligible to originate, purchase, hold,
                        sell and service Mortgage Loans to be sold to RFC.

                        5.14 Place of Business. The principal place of business
            of the Borrowers is 1063 McGaw Avenue, Irvine, CA 92614.

                        5.15 Special Representations Concerning Collateral. The
            Borrowers hereby represent and warrant to the Lender, as of the date
            of this Agreement and as of the date of each Advance Request and the
            making of each Advance, that:

                                    5.15(a) The Borrowers are the legal and
                        equitable owner and holder, free and clear of all Liens
                        (other than Liens granted hereunder), of the Pledged
                        Mortgages and the Pledged Securities. All Pledged
                        Mortgages, Pledged Securities and Purchase Commitments
                        have been duly authorized and validly issued to the
                        Borrowers, and all of the foregoing items of Collateral
                        comply with all of the requirements of this Agreement,
                        and have been and will continue to be validly pledged or
                        assigned to the Lender, subject to no other Liens.

                                    5.15(b) The Borrowers have, and will
                        continue to have, the full right, power and authority to
                        pledge the Collateral pledged and to be pledged by it
                        hereunder.

                                    5.15(c) Any Mortgage Loan and any related
                        document included in the Pledged Mortgages (1) has been
                        duly executed and delivered by the parties thereto at a
                        closing held not more than ninety (90) days prior to the
                        date of the Advance Request for such Mortgage Loan, (2)
                        has been made in compliance with all requirements of the
                        Real Estate Settlement Procedures Act, Equal Credit
                        Opportunity Act, the federal Truth-In-Lending Act and
                        all other applicable laws and regulations, (3) is and
                        will continue to be valid and enforceable in accordance
                        with its terms, without defense or offset, (4) has not
                        been


                                       36

<PAGE>   43



                        modified or amended except in writing, which writing is
                        part of the Collateral Documents, nor any requirements
                        thereof waived, (5) has been evaluated or appraised in
                        accordance with Title XI of FIRREA, and (6) complies and
                        will continue to comply with the terms of this Agreement
                        and, if applicable, with the related Purchase Commitment
                        held by the Borrowers. Each Mortgage Loan other than a
                        Home Equity Loan has been fully advanced in the face
                        amount thereof, each First Mortgage is a first Lien on
                        the premises described therein and each Second Mortgage
                        is secured by a second Lien on the premises described
                        therein, and has or will have a title insurance policy,
                        in American Land Title Association form or equivalent
                        thereof, from a recognized title insurance company,
                        insuring the priority of the Lien of the Mortgage and
                        meeting the usual requirements of Investors purchasing
                        such Mortgage Loans.

                                    5.15(d) No default has occurred and is
                        continuing for more than sixty (60) days under any
                        Mortgage Loan included in the Pledged Mortgages without
                        the Advance against such Pledged Mortgage having been
                        repaid in accordance with Section 2.5(c)(3) hereof,
                        provided, however, that with respect to Pledged
                        Mortgages which have already been pledged as Collateral
                        hereunder, if any default has occurred, the Borrowers
                        will promptly notify the Lender.

                                    5.15(e) The Borrowers have complied and will
                        continue to comply in all material respects with all
                        laws, rules and regulations in respect of the FHA
                        insurance or VA guaranty of each Mortgage Loan included
                        in the Pledged Mortgages designated by the Borrowers as
                        an FHA insured or VA guaranteed Mortgage Loan, and such
                        insurance or guarantee is and will continue to be in
                        full force and effect.

                                    5.15(f) All fire and casualty policies
                        covering the premises encumbered by each Mortgage
                        included in the Pledged Mortgages (1) name and will
                        continue to name the Borrowers and its successors and
                        assigns as the insured under a standard mortgagee
                        clause, (2) are and will continue to be in full force
                        and effect, and (3) afford and will continue to afford
                        insurance against fire and such other risks as are
                        usually insured against in the broad form of extended
                        coverage insurance from time to time available.

                                    5.15(g) Pledged Mortgages secured by
                        premises located in a special flood hazard area
                        designated as such by the Director of the Federal
                        Emergency Management Agency are and shall continue to be
                        covered by special


                                       37

<PAGE>   44



                        flood insurance under the National Flood Insurance
                        Program.

                                    5.15(h) Each Pledged Mortgage against which
                        an Advance is made on the basis of a Purchase Commitment
                        meets all requirements of such Purchase Commitment. The
                        Borrowers shall assure that Pledged Mortgages which are
                        intended to be used in the formation of Mortgage-backed
                        Securities shall comply or, prior to the formation of
                        any such Mortgage-backed Security, shall comply with the
                        requirements of the governmental instrumentality,
                        department, agency or other Person issuing or
                        guaranteeing such Mortgage-backed Security. The
                        Borrowers shall assure that Uncommitted Mortgage Loans
                        pledged hereunder meet all requirements of one or more
                        Investors with which the Borrowers have agreements or
                        other arrangements to sell similar Mortgage Loans.

                                    5.15(i) For Pledged Mortgages which will be
                        used to back Ginnie Mae Mortgage-backed Securities, the
                        Borrowers have received from Ginnie Mae a Confirmation
                        Notice or Confirmation Notices for Request Additional
                        Commitment Authority and for Request Pool Numbers, and
                        there remains available thereunder a commitment on the
                        part of Ginnie Mae sufficient to permit the issuance of
                        Ginnie Mae Mortgage-backed Securities in an amount at
                        least equal to the amount of such Pledged Mortgages
                        designated by the Borrowers as the Mortgage Loans to be
                        used to back such Ginnie Mae Mortgage-backed Securities;
                        each such Confirmation Notice is in full force and
                        effect; each of such Pledged Mortgages has been assigned
                        by the Borrowers to one of such Pool Numbers and a
                        portion of the available Ginnie Mae Commitment has been
                        allocated thereto by the Borrowers, in an amount at
                        least equal to such Pledged Mortgages; and each such
                        assignment and allocation has been reflected in the
                        books and records of the Borrowers.

                                    5.15(j) Each Pledged Mortgage secured by
                        real property to which a Manufactured Home is affixed
                        will create a valid Lien on such Manufactured Home that
                        will have priority over any other Lien on such
                        Manufactured Home, whether or not arising under
                        applicable real property law.

                        5.16 Servicing. Attached hereto as Exhibit E is a true
            and complete list of the Borrowers' Servicing Portfolio. All of the
            Borrowers' Servicing Contracts are in full force and effect and,
            except as otherwise indicated, are unencumbered by Liens. No default
            or event which, with notice or lapse of time or both, would become a
            default, exists under any such Servicing Contract.


                                       38

<PAGE>   45



                        5.17 No Adverse Selection. The Borrowers have not
            selected the Collateral in a manner so as to affect adversely
            the Lender's interests.

                        5.18 Year 2000 Compliance. The Borrowers have conducted
            a comprehensive review and assessment of the Borrowers' computer
            applications and made inquiry of the Borrowers' key suppliers,
            vendors, customers, and Investors with respect to the "Year 2000
            Problem" and, based on that review and inquiry, the Borrowers do not
            believe the Year 2000 Problem will result in a material adverse
            change in the Borrowers' business condition (financial or
            otherwise), operations, properties or prospects, or ability to repay
            the credit.

6.          AFFIRMATIVE COVENANTS.

                        The Borrowers hereby covenant and agree that, so long as
            the Commitment is outstanding or there remain any Obligations to be
            paid or performed under this Agreement or under any other Loan
            Document, the Borrowers shall:

                        6.1 Payment of Note. Punctually pay or cause to be paid
            all Obligations payable hereunder and under the Note in accordance
            with the terms hereof and thereof.

                        6.2 Financial Statements and Other Reports.  Deliver to
            the Lender:

                                    6.2(a) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month of BNC, statements of income and changes in
                        stockholders' equity of BNC and its Subsidiaries, on a
                        consolidated and consolidating basis for the immediately
                        preceding month and for the period from the beginning of
                        the fiscal year to the end of such calendar month, and
                        the related balance sheet as of the end of the
                        immediately preceding month, all in reasonable detail
                        and certified as to the fairness of presentation by the
                        chief financial officer of BNC, subject, however, to
                        year-end audit adjustments.

                                    6.2(b) As soon as available and in any event
                        within ninety (90) days after the close of each fiscal
                        year of BNC, statements of income, changes in
                        stockholders' equity and cash flow of BNC and its
                        Subsidiaries, on a consolidated and consolidating basis
                        for such year, and the related balance sheet as of the
                        end of such year (setting forth in comparative form the
                        corresponding figures for the preceding fiscal year),
                        all in reasonable detail and accompanied by an opinion
                        (which opinion shall not be qualified due to possible
                        failure to


                                       39

<PAGE>   46

                        take all appropriate steps to successfully address Year
                        2000 Problem) in form and substance satisfactory to the
                        Lender and prepared by an accounting firm reasonably
                        satisfactory to the Lender, or other independent
                        certified public accountants of recognized standing
                        selected by BNC and acceptable to the Lender, as to said
                        financial statements and a certificate signed by the
                        chief financial officer of BNC stating that said
                        financial statements fairly present the financial
                        condition and results of operations of BNC and its
                        Subsidiaries as of the end of, and for, such year.

                                    6.2(c) Together with each delivery of
                        financial statements required in this Section 6.2, an
                        Officer's Certificate substantially in the form of
                        Exhibit I-SF hereto: (1) setting forth in reasonable
                        detail all calculations necessary to show that BNC and
                        its Subsidiaries are in compliance with the requirements
                        of Sections 7.6, 7.7, 7.8, 7.9 and 7.10 hereof as of the
                        end of such month or year (or, if the Borrowers are not
                        in compliance, showing the extent of non-compliance and
                        specifying the period of non-compliance and what actions
                        the Borrowers have taken, are taking or propose to take
                        with respect thereto); (2) certifying that the Borrowers
                        were, as of the end of the period, in compliance and in
                        good standing with applicable HUD, Ginnie Mae, or
                        Investor net worth requirements; (3) certifying that the
                        representation set forth in Section 5.18 hereof is true
                        and correct as of the date of such certificate or, if
                        such representation is not true and correct as of such
                        date, specifying the nature of the problem and what
                        action the Borrowers have taken, are taking and propose
                        to take with request thereto, and (4) stating that the
                        signers have reviewed the terms of this Agreement and
                        have made, or caused to be made under their supervision,
                        a review in reasonable detail of the transactions and
                        conditions of the Borrowers (and, if applicable, their
                        Subsidiaries) during the accounting period covered by
                        such financial statements and that such review has not
                        disclosed the existence during or at the end of such
                        accounting period, and that the signers do not have
                        knowledge of the existence as of the date of the
                        Officer's Certificate, of any Default or Event of
                        Default, or if any Default or Event of Default existed
                        or exists, specifying the nature and period of the
                        existence thereof and what action the Borrowers have
                        taken, are taking and propose to take with respect
                        thereto.

                                    6.2(d) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month, a commitment summary and pipeline report



                                       40

<PAGE>   47



                        substantially in the form of Exhibit L (the "Commitment
                        Summary Report") dated as of the end of such month.

                                    6.2(e) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month, a consolidated report (the "Servicing Portfolio
                        Report") as of the end of the calendar month detailing,
                        as to all Mortgage Loans the servicing rights to which
                        are owned by the Borrowers (specified by investor type,
                        recourse and non-recourse) regardless of whether such
                        Mortgage Loans are Pledged Mortgages and which report
                        shall indicate Mortgage Loans which (A) are current and
                        in good standing, (B) are more than 30, 60 or 90 days
                        past due, respectively, (C) are, for Mortgage Loans
                        serviced with recourse, more than three hundred sixty
                        (360) days past due, (D) are the subject of pending
                        bankruptcy or foreclosure proceedings, or (E) have been
                        converted (through foreclosure or other proceedings in
                        lieu thereof) by the Borrowers into real estate owned by
                        the Borrowers.

                                    6.2(f) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month, a consolidated report (the "Loan Production
                        Report") as of the end of such month, presenting the
                        total dollar volume and the number of Mortgage Loans
                        originated or purchased during such month and the fiscal
                        year to date, specified by property type and loan type
                        (e.g. FHA, Ginnie Mae, Fannie Mae, Freddie Mac,
                        Conventional, etc.)

                                    6.2(g) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month, a delinquency report (the "Delinquency Report")
                        as of the end of such month, itemizing which Mortgage
                        Loans owned by the Borrowers or financed under a credit
                        facility of the Borrowers are more than 30, 60 and 90
                        days delinquent and indicating under which credit
                        facility of the Borrowers each Mortgage Loan is
                        financed.

                                    6.2(h) Reports in respect of the Pledged
                        Mortgages and Pledged Securities, in such detail and at
                        such times as the Lender in its discretion may
                        reasonably request at any time or from time to time.

                                    6.2(i) As soon as available and in any event
                        within fifteen (15) days of filing, copies of all
                        regular or periodic financial and other reports, if any,
                        which the Borrowers shall file with the Securities and
                        Exchange Commission or any governmental agency successor
                        thereto, copies of any audits completed by Ginnie Mae,
                        Fannie Mae or Freddie Mac and copies of the Mortgage
                        Bankers'

                                       41

<PAGE>   48



                        Financial Reporting Forms (Freddie Mac Form 1055/Fannie
                        Mae Form 1002) which the Borrowers are required to have
                        filed, as the Lender may reasonably request.

                                    6.2(j) As soon as available and in any event
                        within sixty (60) days after the end of each calendar
                        year, annual financial projections for the upcoming
                        fiscal year.

                                    6.2(k) As soon as available and in any event
                        within thirty (30) days after the end of each calendar
                        month, a report detailing any and all repurchase or
                        rejected Mortgage Loan requests as well as any and all
                        indemnification agreements entered into by the
                        Borrowers.

                                    6.2(l) From time to time, with reasonable
                        promptness, such further information regarding the
                        business, operations, properties or financial condition
                        of the Borrowers as the Lender may reasonably request.

                        6.3 Maintenance of Existence; Conduct of Business.
            Preserve and maintain their corporate existence in good standing and
            all of their rights, privileges, licenses and franchises necessary
            or desirable in the normal conduct of its business, including,
            without limitation, their eligibility as lender, seller/servicer and
            issuer described under Section 5.13 hereof; conduct their business
            in an orderly and efficient manner; maintain a net worth of
            acceptable assets as required for maintaining the Borrowers'
            eligibility as lender, seller/servicer and issuer described under
            Section 5.13 hereof; and make no change in the nature or character
            of their business or engage in any business in which they were not
            engaged on the date of this Agreement.

                        6.4 Compliance with Applicable Laws. Comply with the
            requirements of all applicable laws, rules, regulations and orders
            of any governmental authority, a breach of which could materially
            adversely affect their business, operations, assets, or financial
            condition, except where contested in good faith and by appropriate
            proceedings.

                        6.5 Inspection of Properties and Books. Permit
            authorized representatives of the Lender or any Participant to
            discuss the business, operations, assets and financial condition of
            the Borrowers and their Subsidiaries with their officers and
            employees and to examine their books of account and make copies or
            extracts thereof, all at such reasonable times as the Lender or any
            Participant may request. The Borrowers will provide their
            accountants with a copy of this Agreement promptly after the
            execution hereof and will instruct their accountants to answer
            candidly any and all questions that the officers of the Lender or
            any Participant


                                       42

<PAGE>   49

            or any authorized representatives of the Lender or any Participant
            may address to them in reference to the financial condition or
            affairs of the Borrowers and their Subsidiaries. The Borrowers may
            have their representatives in attendance at any meetings between the
            officers or other representatives of the Lender or any Participant
            and the Borrowers' accountants held in accordance with this
            authorization.

                        6.6 Notice. Give prompt Notice to the Lender of (a) any
            action, suit or proceeding instituted by or against the Borrowers or
            any of their Subsidiaries in any federal or state court or before
            any commission or other regulatory body (federal, state or local,
            domestic or foreign) which action, suit or proceeding has at issue
            in excess of One Hundred Thousand Dollars ($100,000), or any such
            proceedings threatened against the Borrowers or any of their
            Subsidiaries in a writing containing the details thereof, except for
            foreclosure and collection actions instituted by the Company on
            Mortgage Loans to the extent no claim is made against the Company in
            such actions, (b) the filing, recording or assessment of any
            federal, state or local tax Lien against the Borrowers, or any of
            their assets or any of their Subsidiaries, (c) the occurrence of any
            Event of Default hereunder or the occurrence of any Default and
            continuation thereof for five (5) days, (d) the suspension,
            revocation or termination of the Borrower's eligibility, in any
            respect, as approved lender, seller/servicer or issuer as described
            under Section 5.13 hereof, (e) the transfer, loss or termination of
            any Servicing Contract to which the Borrowers are a party, or which
            is held for the benefit of the Borrowers, and the reason for such
            transfer, loss or termination, if known to the Borrowers, and (f)
            any other action, event or condition of any nature which may lead to
            or result in a material adverse effect upon the business,
            operations, assets, or financial condition of the Borrowers and
            their Subsidiaries or which, with or without notice or lapse of time
            or both, would constitute a default under any other agreement,
            instrument or indenture to which the Borrowers or any of their
            Subsidiaries is a party or to which the Borrowers or any of their
            Subsidiaries, their properties, or assets may be subject.

                        6.7 Payment of Debt, Taxes, etc. Pay and perform all
            obligations and indebtedness of the Borrowers, and cause to be paid
            and performed all obligations and indebtedness of their
            Subsidiaries, promptly and in accordance with the terms thereof and
            pay and discharge or cause to be paid and discharged promptly all
            taxes, assessments and governmental charges or levies imposed upon
            the Borrowers or their Subsidiaries or upon their respective income,
            receipts or properties before the same shall become past due, as
            well as all lawful claims for labor, materials and supplies or
            otherwise which, if unpaid, might become a Lien or charge upon



                                       43

<PAGE>   50

            such properties or any part thereof; provided, however, that the
            Borrowers and their Subsidiaries shall not be required to pay taxes,
            assessments or governmental charges or levies or claims for labor,
            materials or supplies for which the Borrowers or their Subsidiaries
            shall have obtained an adequate bond or adequate insurance or which
            are being contested in good faith and by proper proceedings which
            are being reasonably and diligently pursued and for which proper
            reserves have been created.

                        6.8 Insurance. Maintain (a) errors and omissions
            insurance or mortgage impairment insurance and blanket bond
            coverage, with such companies and in such amounts as satisfy
            prevailing requirements applicable to a lender, seller/servicer and
            issuer described under Section 5.13 hereof, and (b) liability
            insurance and fire and other hazard insurance on its properties,
            with responsible insurance companies approved by the Lender, in such
            amounts and against such risks as is customarily carried by similar
            businesses operating in the same vicinity; and (c) within thirty
            (30) days after Notice from the Lender, obtain such additional
            insurance as the Lender shall reasonably require, all at the sole
            expense of the Borrowers. Copies of such policies shall be furnished
            to the Lender without charge upon request of the Lender.

                        6.9 Closing Instructions. Indemnify and hold the Lender
            harmless from and against any loss, including reasonable attorneys'
            fees and costs, attributable to the failure of a title insurance
            company, agent or approved attorney to comply with the disbursement
            or instruction letter or letters of the Borrowers relating to any
            Mortgage Loan.

                        6.10 Subordination of Certain Indebtedness.  Cause any
            indebtedness of the Borrowers, incurred after the date of this
            Agreement, to any shareholder, director or officer of the
            Borrowers, or to any Affiliate of the Borrowers or of any
            Subsidiary of the Borrowers, which indebtedness has a term of
            more than one (1) year or is in excess of One Hundred Thousand
            Dollars ($100,000) to be subordinated to all Obligations by
            the execution of a Subordination of Debt Agreement in the form
            of Exhibit F hereto and deliver to the Lender an executed copy
            of said Agreement, certified by the respective corporate
            secretary of the Borrowers to be true and complete and in full
            force and effect.

                        6.11 Other Loan Obligations. Perform all material
            obligations under the terms of each loan agreement, note, mortgage,
            security agreement or debt instrument by which the Borrowers are
            bound or to which any of their property is subject, and promptly
            notify the Lender in writing of a declared default under or the
            termination, cancellation,


                                       44

<PAGE>   51

            reduction or nonrenewal of any of its other lines of credit or
            agreements with any other lender. Exhibit J hereto is a true and
            complete list of all such lines of credit or agreements as of the
            date hereof and the Borrowers hereby agree to give the Lender at
            least thirty (30) days Notice before entering into any additional
            lines of credit.

                        6.12 Use of Proceeds of Advances. Use the proceeds of
            each Advance solely for the purpose set forth in Section 2.1(b) for
            Advances of that type.

                        6.13 Special Affirmative Covenants Concerning 
            Collateral.

                                    6.13(a) Warrant and defend the right, title
                        and interest of the Lender in and to the Collateral
                        against the claims and demands of all Persons
                        whomsoever.

                                    6.13(b) Service or cause to be serviced all
                        Mortgage Loans in accordance with the standard
                        requirements of the issuers of Purchase Commitments
                        covering the same and all applicable FHA and VA
                        requirements, including without limitation taking all
                        actions necessary to enforce the obligations of the
                        obligors under such Mortgage Loans. The Borrowers shall
                        service or cause to be serviced all Mortgage Loans
                        backing Pledged Securities in accordance with applicable
                        governmental requirements and requirements of issuers of
                        Purchase Commitments covering the same. The Borrowers
                        shall hold all escrow funds collected in respect of
                        Pledged Mortgages and Mortgage Loans backing Pledged
                        Securities in trust, without commingling the same with
                        non-custodial funds, and apply the same for the purposes
                        for which such funds were collected.

                                    6.13(c) Execute and deliver to the Lender
                        such Uniform Commercial Code financing statements with
                        respect to the Collateral as the Lender may request. The
                        Borrowers shall also execute and deliver to the Lender
                        such further instruments of sale, pledge or assignment
                        or transfer, and such powers of attorney, as required by
                        the Lender, and shall do and perform all matters and
                        things necessary or desirable to be done or observed,
                        for the purpose of effectively creating, maintaining and
                        preserving the security and benefits intended to be
                        afforded the Lender under this Agreement. The Lender
                        shall have all the rights and remedies of a secured
                        party under the Uniform Commercial Code of Minnesota, or
                        any other applicable law, in addition to all rights
                        provided for herein.



                                       45

<PAGE>   52

                                    6.13(d) Notify the Lender within two (2)
                        Business Days of any default under, or of the
                        termination of, any Purchase Commitment relating to any
                        Pledged Mortgage, Eligible Mortgage Pool or Pledged
                        Security.

                                    6.13(e) Promptly comply in all respects with
                        the terms and conditions of all Purchase Commitments,
                        and all extensions, renewals and modifications or
                        substitutions thereof or thereto. The Borrowers will
                        cause to be delivered to the Investor the Pledged
                        Mortgages and Pledged Securities to be sold under each
                        Purchase Commitment not later than the mandatory
                        delivery date thereof.

                                    6.13(f) Maintain, at its principal office or
                        in a regional office approved by the Lender, or in the
                        office of a computer service bureau engaged by the
                        Borrowers and approved by the Lender, and, upon request,
                        make available to the Lender the originals, or copies in
                        any case where the originals have been delivered to the
                        Lender or to an Investor, of its Mortgage Notes and
                        Mortgages included in Pledged Mortgages, Mortgage-backed
                        Securities delivered to the Lender as Pledged
                        Securities, Purchase Commitments, and all related
                        Mortgage Loan documents and instruments, and all files,
                        surveys, certificates, correspondence, appraisals,
                        computer programs, tapes, discs, cards, accounting
                        records and other information and data relating to the
                        Collateral.

7.  NEGATIVE COVENANTS.

                        The Borrowers hereby covenant and agree that, so long as
            the Commitment is outstanding or there remain any Obligations to be
            paid or performed, the Borrowers shall not, either directly or
            indirectly, without the prior written consent of the Lender:

                        7.1 Contingent Liabilities. Assume, guarantee, endorse,
            or otherwise become contingently liable for the obligation of any
            Person other than the Borrowers, except by endorsement of negotiable
            instruments for deposit or collection in the ordinary course of
            business.

                        7.2 Sale or Pledge of Servicing Contracts.  Sell, pledge
            or grant a security interest in any existing or future
            Servicing Contracts of the Borrowers other than to the Lender,
            excepting therefrom any such Servicing Contracts pledged as
            collateral for mortgage warehouse lines of credit, except as
            otherwise expressly permitted in this Agreement, or omit to
            take any action required to keep all such Servicing Contracts
            in full force and effect; provided, however, that if no


                                       46

<PAGE>   53

            Default or Event of Default has occurred and is continuing,
            servicing on individual Mortgage Loans may be sold concurrently with
            and incidental to the sale of such Mortgage Loans (with servicing
            released) in the ordinary course of the Borrowers' business.

                        7.3 Merger; Sale of Assets; Acquisitions. (a) Liquidate,
            dissolve, consolidate or merge, (b) sell any substantial part of its
            assets, or (c) acquire any substantial part of the assets of another
            if, after giving effect to such acquisition, (i) an Event of Default
            or Default would exist or (ii) any material change in the senior
            management of the Borrowers would occur.

                        7.4 Deferral of Subordinated Debt. Pay in advance of the
            stated maturity thereof any Subordinated Debt of the Borrowers or,
            if a Default or Event of Default hereunder shall have occurred, make
            any payment of any kind thereafter on such Subordinated Debt until
            all Obligations have been paid and performed in full and any
            applicable preference period has expired.

                        7.5 Loss of Eligibility. Take any action that would
            cause the Borrowers to lose all or any part of their status as an
            eligible lender, seller/servicer and issuer as described under
            Section 5.13 hereof.

                        7.6 Debt to Tangible Net Worth Ratio. Permit the ratio
            of Debt (excluding, for this purpose only, Debt arising under the
            Hedging Arrangements, to the extent of assets arising under the same
            Hedging Arrangements) to Tangible Net Worth of BNC and its
            Subsidiaries, on a consolidated and consolidating basis, at any time
            to exceed 15 to 1.

                        7.7 Minimum Tangible Net Worth. Permit Tangible Net
            Worth of BNC and its Subsidiaries, on a consolidated and
            consolidating basis, at any time to be less than Twenty-Five Million
            Dollars ($25,000,000) and of each Subsidiary, on an unconsolidated
            basis, at any time to be less than One Dollar ($1.00).

                        7.8 Liquidity. Permit the Liquid Assets of BNC and its
            Subsidiaries, on a consolidated and consolidating basis, at any time
            to be less than Ten Million Dollars ($10,000,000).

                        7.9 Transactions with Affiliates. Directly or indirectly
            (a) make any loan, advance, extension of credit or capital
            contribution to any of its Affiliates, (b) transfer, sell, pledge,
            assign or otherwise dispose of any of its assets to or on behalf of
            such Affiliates, (c) merge or consolidate with or purchase or
            acquire assets from such Affiliates, or (d) pay management fees to
            or on behalf of such Affiliates.


                                       47

<PAGE>   54

                        7.10 Quarterly Net Income. Permit the net income of BNC
            for any fiscal quarter, beginning with the quarter ending June 1999,
            to be less than zero.

                        7.11 Acquisition of Recourse Servicing Contracts.
            Acquire Servicing Contracts under which the Borrowers are obligated
            to repurchase or indemnify the holder of the Mortgage Loans as a
            result of defaults on the Mortgage Loans at any time during the term
            of such Mortgage Loans.

                        7.12 Special Negative Covenants Concerning Collateral.

                                    7.12(a) The Borrowers shall not amend or
                        modify, or waive any of the terms and conditions of, or
                        settle or compromise any claim in respect of, any
                        Pledged Mortgages or Pledged Securities.

                                    7.12(b) The Borrowers shall not sell,
                        assign, transfer or otherwise dispose of, or grant any
                        option with respect to, or pledge or otherwise encumber
                        (except pursuant to this Agreement or as permitted
                        herein) any of the Collateral or any interest therein.

                                    7.12(c) The Borrowers shall not make any
                        compromise, adjustment or settlement in respect of any
                        of the Collateral or accept other than cash in payment
                        or liquidation of the Collateral.

8. DEFAULTS; REMEDIES.

                        8.1 Events of Default. The occurrence of any of the
            following conditions or events shall be an event of default ("Event
            of Default"):

                                    8.1(a) Failure to pay the principal of any
                        Advance when due, whether at stated maturity, by
                        acceleration, or otherwise; or failure to pay any
                        installment of interest on any Advance or any other
                        amount due under this Agreement within ten (10) days
                        after the due date; or failure to pay, within any
                        applicable grace period, any other Obligations of the
                        Borrowers due the Lender; or

                                    8.1(b) Failure of the Borrowers or any of
                        their Subsidiaries to pay, or any default in the payment
                        of any principal or interest on, any other indebtedness
                        or in the payment of any contingent obligation within
                        any period of grace provided; breach or default with
                        respect to any other material term of any other
                        indebtedness or of any loan agreement, mortgage,
                        indenture or other agreement relating thereto, if the
                        effect of such breach


                                       48

<PAGE>   55

                        or default is to cause, or to permit the holder or
                        holders thereof (or a trustee on behalf of such holder
                        or holders) to cause, indebtedness of the Borrowers or
                        their Subsidiaries in the aggregate amount of One
                        Hundred Thousand Dollars ($100,000) or more to become or
                        be declared due prior to its stated maturity (upon the
                        giving or receiving of notice, lapse of time, both, or
                        otherwise); or

                                    8.1(c) Failure of the Borrowers to perform
                        or comply with any term or condition applicable to them
                        contained in Sections 6.3, 6.12 and 6.13 or in any
                        Section of Article 7 of this Agreement; or

                                    8.1(d) Any of the Borrowers' representations
                        or warranties made or deemed made herein or in any other
                        Loan Document (other than the representations and
                        warranties set forth in Section 5.15 hereof), or in any
                        statement or certificate at any time given by the
                        Borrowers in writing pursuant hereto or thereto shall be
                        inaccurate or incomplete in any material respect on the
                        date as of which made or deemed made; or

                                    8.1(e) The Borrowers shall default in the
                        performance of or compliance with any term contained in
                        this Agreement or any other Loan Document other than
                        those referred to above in Subsections 8.1(a), 8.1(c) or
                        8.1(d) and such default shall not have been remedied or
                        waived within thirty (30) days after the earliest of (i)
                        receipt by the Borrowers of Notice from the Lender of
                        such default, (ii) receipt by the Lender of Notice from
                        the Borrowers of such default, or (iii) the date the
                        Borrowers should have notified the Lender of such
                        default pursuant to Section 6.6(c); or

                                    8.1(f) (1) A court having jurisdiction shall
                        enter a decree or order for relief in respect of the
                        Borrowers, any Subsidiary of the Borrowers in an
                        involuntary case under any applicable bankruptcy,
                        insolvency or other similar law in respect of the
                        Borrowers, any Subsidiary of the Borrowers now or
                        hereafter in effect, which decree or order is not
                        stayed; the Borrowers, any Subsidiary of the Borrowers
                        shall consent to the entry of any such decree or order;
                        or a filing of a voluntary case under any applicable
                        bankruptcy, insolvency or other similar law in respect
                        of the Borrowers, any Subsidiary of the Borrowers has
                        occurred; or any other similar relief shall be granted
                        under any applicable federal or state law; or (2) the
                        filing of an involuntary case in respect of the
                        Borrowers, any Subsidiary of the Borrowers under any
                        applicable bankruptcy, insolvency or other similar law;
                        or a decree or order of a court having jurisdiction for



                                       49

<PAGE>   56

                        the appointment of a receiver, liquidator, sequestrator,
                        trustee, custodian or other officer having similar
                        powers over the Borrowers, any Subsidiary of the
                        Borrowers, or over all or a substantial part of their
                        respective property, shall have been entered; or the
                        involuntary appointment of an interim or permanent
                        receiver, trustee or other custodian of the Borrowers,
                        any Subsidiary of the Borrowers for all or a substantial
                        part of their respective property; or the issuance of a
                        warrant of attachment, execution or similar process
                        against any substantial part of the property of the
                        Borrowers, any Subsidiary of the Borrowers, and the
                        continuance of any such events in Subsection (2) above
                        for sixty (60) days unless dismissed, bonded off or
                        discharged; or

                                    8.1(g) The Borrowers, any Subsidiary of the
                        Borrowers shall consent to the appointment of or taking
                        possession by a receiver, trustee or other custodian for
                        all or a substantial part of their property; the making
                        by the Borrowers, any Subsidiary of the Borrowers of any
                        assignment for the benefit of creditors; or the
                        inability or failure of the Borrowers, any Subsidiary of
                        the Borrowers, or the admission by the Borrowers, any
                        Subsidiary of the Borrowers in writing of their
                        inability, to pay their debts as such debts become due;
                        or

                                    8.1(h) Failure of the Borrowers to perform
                        any contractual obligations which they may have to
                        repurchase Mortgage Loans, if such obligations in the
                        aggregate exceed Five Hundred Thousand Dollars
                        ($500,000); or

                                    8.1(i) Any money judgment, writ or warrant
                        of attachment, or similar process involving in any case
                        an amount in excess of One Hundred Thousand Dollars
                        ($100,000) shall be entered or filed against the
                        Borrowers or any of their Subsidiaries or any of their
                        respective assets and shall remain undischarged,
                        unvacated, unbonded or unstayed for a period of thirty
                        (30) days or in any event later than five (5) days prior
                        to the date of any proposed sale thereunder; or

                                    8.1(j) Any order, judgment or decree shall
                        be entered against the Borrowers decreeing the
                        dissolution or split up of the Borrowers and such order
                        shall remain undischarged or unstayed for a period in
                        excess of twenty (20) days; or

                                    8.1(k) Any Plan maintained by the Borrowers
                        or any of its Subsidiaries shall be terminated within
                        the meaning of Title IV of ERISA or a trustee shall be
                        appointed by an appropriate United States district court


                                       50

<PAGE>   57

                        to administer any Plan, or the Pension Benefit Guaranty
                        Corporation (or any successor thereto) shall institute
                        proceedings to terminate any Plan or to appoint a
                        trustee to administer any Plan if as of the date thereof
                        the Borrowers' liability or any such Subsidiary's
                        liability (after giving effect to the tax consequences
                        thereof) to the Pension Benefit Guaranty Corporation (or
                        any successor thereto) for unfunded guaranteed vested
                        benefits under the Plan exceeds the then current value
                        of assets accumulated in such Plan by more than
                        Twenty-Five Thousand Dollars ($25,000) (or in the case
                        of a termination involving the Borrowers or any of their
                        Subsidiaries as a "substantial employer" (as defined in
                        Section 4001(a)(2) of ERISA) the withdrawing employer's
                        proportionate share of such excess shall exceed such
                        amount); or

                                    8.1(l) The Borrowers or any of their
                        Subsidiaries as employer under a Multiemployer Plan
                        shall have made a complete or partial withdrawal from
                        such Multiemployer Plan and the plan sponsor of such
                        Multiemployer Plan shall have notified such withdrawing
                        employer that such employer has incurred a withdrawal
                        liability in an annual amount exceeding Twenty-Five
                        Thousand Dollars ($25,000); or

                                    8.1(m) The Borrowers shall purport to
                        disavow their obligations hereunder or shall contest the
                        validity or enforceability hereof; or the Lender's
                        security interest on any portion of the Collateral shall
                        become unenforceable or otherwise impaired; provided
                        that, subject to the Lender's approval, no Event of
                        Default shall occur as a result of such impairment if
                        all Advances made against any such Collateral shall be
                        paid in full within ten (10) days of the date of such
                        impairment; or

                                    8.1(n) Any Lien for any taxes, assessments
                        or other governmental charges (i) is filed against the
                        Borrowers or any of their property, or is otherwise
                        enforced against the Borrowers or any of their property,
                        or (ii) obtains priority that is equal or greater than
                        the priority of the Lender's security interest in any of
                        the Collateral; or

                                    8.1(o) A material adverse change occurs, or
                        is reasonably likely to occur, in the business condition
                        (financial or otherwise), operations, properties or
                        prospects of the Borrowers, or in the ability of the
                        Borrowers to repay the Obligations.



                                       51

<PAGE>   58

                        8.2 Remedies.

                                    8.2(a) Upon the occurrence of any Event of
                        Default described in Sections 8.1(f) or 8.1(g), the
                        Commitment shall be terminated and the unpaid principal
                        amount of and accrued interest on the Note and all other
                        Obligations shall automatically become due and payable,
                        without presentment, demand or other requirements of any
                        kind, all of which are hereby expressly waived by the
                        Borrowers.

                                    8.2(b) Upon the occurrence of any Event of
                        Default, other than those described in Sections 8.1(f)
                        and 8.1(g), the Lender may, by Notice to the Borrowers,
                        terminate the Commitment and/or declare all Obligations
                        to be immediately due and payable, whereupon the same
                        shall forthwith become due and payable, together with
                        all accrued interest thereon, and the obligation of the
                        Lender to make any Advances shall thereupon terminate.

                                    8.2(c) Upon the occurrence of any Event of
                        Default, the Lender may also do any of the following:

                                                (1) Foreclose upon or otherwise
                                    enforce its security interest in and Lien on
                                    the Collateral to secure all payments and
                                    performance of the Obligations in any manner
                                    permitted by law or provided for hereunder.

                                                (2) Notify all obligors in
                                    respect of Collateral that the Collateral
                                    has been assigned to the Lender and that all
                                    payments thereon are to be made directly to
                                    the Lender or such other party as may be
                                    designated by the Lender; settle,
                                    compromise, or release, in whole or in part,
                                    any amounts owing on the Collateral, any
                                    such obligor or any Investor or any portion
                                    of the Collateral, on terms acceptable to
                                    the Lender; enforce payment and prosecute
                                    any action or proceeding with respect to any
                                    and all Collateral; and where any such
                                    Collateral is in default, foreclose on and
                                    enforce security interests in such
                                    Collateral by any available judicial
                                    procedure or without judicial process and
                                    sell property acquired as a result of any
                                    such foreclosure.

                                                (3) Act, or contract with a
                                    third party to act, as servicer or
                                    subservicer of each item of Collateral
                                    requiring servicing and perform all
                                    obligations required in connection with
                                    Servicing Contracts and Purchase
                                    Commitments, such third party's fees to be
                                    paid by the Borrowers.



                                       52

<PAGE>   59

                                                (4) Require the Borrowers to
                                    assemble the Collateral and/or books and
                                    records relating thereto and make such
                                    available to the Lender at a place to be
                                    designated by the Lender.

                                                (5) Enter onto property where
                                    any Collateral or books and records relating
                                    thereto are located and take possession
                                    thereof with or without judicial process;
                                    and obtain access to the Borrowers' data
                                    processing equipment, computer hardware and
                                    software relating to the Collateral and to
                                    use all of the foregoing and the information
                                    contained therein in any manner the Lender
                                    deems necessary for the purpose of
                                    effectuating its rights under this Agreement
                                    and any other Loan Document.

                                                (6) Prior to the disposition of
                                    the Collateral, prepare it for disposition
                                    in any manner and to the extent the Lender
                                    deems appropriate.

                                                (7) Exercise all rights and
                                    remedies of a secured creditor under the
                                    Uniform Commercial Code of Minnesota or
                                    other applicable law, including, but not
                                    limited to, selling or otherwise disposing
                                    of the Collateral, or any part thereof, at
                                    one or more public or private sales, whether
                                    or not such Collateral is present at the
                                    place of sale, for cash or credit or future
                                    delivery, on such terms and in such manner
                                    as the Lender may determine, including,
                                    without limitation, sale pursuant to any
                                    applicable Purchase Commitment. If notice is
                                    required under such applicable law, the
                                    Lender will give the Borrowers not less than
                                    ten (10) days' notice of any such public
                                    sale or of the date after which any private
                                    sale may be held. The Borrowers agree that
                                    ten (10) days' notice shall be reasonable
                                    notice. The Lender may, without notice or
                                    publication, adjourn any public or private
                                    sale or cause the same to be adjourned from
                                    time to time by announcement at the time and
                                    place fixed for the sale, and such sale may
                                    be made at any time or place to which the
                                    same may be so adjourned. In case of any
                                    sale of all or any part of the Collateral on
                                    credit or for future delivery, the
                                    Collateral so sold may be retained by the
                                    Lender until the selling price is paid by
                                    the purchaser thereof, but the Lender shall
                                    not incur any liability in case of the
                                    failure of such purchaser to take up and pay
                                    for the Collateral so sold and, in case of
                                    any such failure, such Collateral may


                                       53

<PAGE>   60

                                    again be sold upon like notice. The Lender
                                    may, however, instead of exercising the
                                    power of sale herein conferred upon it,
                                    proceed by a suit or suits at law or in
                                    equity to collect all amounts due upon the
                                    Collateral or to foreclose the pledge of and
                                    sell the Collateral or any portion thereof
                                    under a judgment or decree of a court or
                                    courts of competent jurisdiction, or both.

                                                (8) Proceed against the
                                    Borrowers on the Note.

                                    8.2(d) The Lender shall incur no liability
                        as a result of the sale or other disposition of the
                        Collateral, or any part thereof, at any public or
                        private sale or disposition. The Borrowers hereby waive
                        (to the extent permitted by law) any claims they may
                        have against the Lender arising by reason of the fact
                        that the price at which the Collateral may have been
                        sold at such private sale was less than the price which
                        might have been obtained at a public sale or was less
                        than the aggregate amount of the outstanding Advances
                        and the unpaid interest accrued thereon, even if the
                        Lender accepts the first offer received and does not
                        offer the Collateral to more than one offeree. Any sale
                        of Collateral pursuant to the terms of a Purchase
                        Commitment, or any other disposition of Collateral
                        arranged by the Borrowers, whether before or after the
                        occurrence of an Event of Default, shall be deemed to
                        have been made in a commercially reasonable manner.

                                    8.2(e) The Borrowers acknowledge that
                        Mortgage Loans and Mortgage-backed Securities are
                        collateral of a type which is customarily sold on a
                        recognized market. The Borrowers waive any right they
                        may have to prior notice of the sale of any Pledged
                        Mortgage or Pledged Security, and agrees that the Lender
                        may purchase any Pledged Mortgages or Pledged Securities
                        at a private sale of such Collateral.

                                    8.2(f) The Borrowers specifically waive and
                        releases (to the extent permitted by law) any equity or
                        right of redemption, all rights of redemption, stay or
                        appraisal which the Borrowers have or may have under any
                        rule of law or statute now existing or hereafter
                        adopted, and any right to require the Lender to (1)
                        proceed against any Person, (2) proceed against or
                        exhaust any of the Collateral or pursue its rights and
                        remedies as against the Collateral in any particular
                        order, or (3) pursue any other remedy in its power. The
                        Lender shall not be required to take any steps necessary
                        to preserve any rights of the Borrowers against holders
                        of mortgages



                                       54

<PAGE>   61

                        prior in lien to the Lien of any Mortgage included in
                        the Collateral or to preserve rights against prior
                        parties.

                                    8.2(g) The Lender may, but shall not be
                        obligated to, advance any sums or do any act or thing
                        necessary to uphold and enforce the Lien and priority
                        of, or the security intended to be afforded by, any
                        Mortgage included in the Collateral, including, without
                        limitation, payment of delinquent taxes or assessments
                        and insurance premiums. All advances, charges, costs and
                        expenses, including reasonable attorneys' fees and
                        disbursements, incurred or paid by the Lender in
                        exercising any right, power or remedy conferred by this
                        Agreement, or in the enforcement hereof, together with
                        interest thereon, at the Default Rate, from the time of
                        payment until repaid, shall become a part of the
                        principal balance outstanding hereunder and under the
                        Note.

                                    8.2(h) No failure on the part of the Lender
                        to exercise, and no delay in exercising, any right,
                        power or remedy provided hereunder, at law or in equity
                        shall operate as a waiver thereof; nor shall any single
                        or partial exercise by the Lender of any right, power or
                        remedy provided hereunder, at law or in equity preclude
                        any other or further exercise thereof or the exercise of
                        any other right, power or remedy. Without intending to
                        limit the foregoing, all defenses based on the statute
                        of limitations are hereby waived by the Borrowers to the
                        extent permitted by law. The remedies herein provided
                        are cumulative and are not exclusive of any remedies
                        provided at law or in equity.

                                    8.2(i) The Lender is hereby granted a
                        non-exclusive license or other right to use, without
                        charge, the Borrowers' computer programs, other
                        programs, labels, patents, copyrights, rights of use of
                        any name, trade secrets, trade names, trademarks,
                        service marks and advertising matter, or any property of
                        a similar nature, as it pertains to the Collateral, in
                        advertising for sale and selling any Collateral, and the
                        Borrowers' rights under all licenses and all other
                        agreements related to the foregoing shall inure to the
                        Lender's benefit until the Obligations are paid in full.

                        8.3 Application of Proceeds. The proceeds of any sale,
            disposition or other enforcement of the Lender's security interest
            in all or any part of the Collateral shall be applied by the Lender
            to the Obligations in such order as the Lender, in its sole and
            absolute discretion, shall determine from and after the indefensible
            payment to the Lender of all of the Obligations, any remaining
            proceeds shall be paid:



                                       55

<PAGE>   62

                        First, to the payment of the costs and expenses of such
            sale or enforcement, including reasonable compensation to the
            Lender's agents and counsel, and all expenses, liabilities and
            advances made or incurred by or on behalf of the Lender in
            connection therewith;

                        Second, to the payment of interest accrued and unpaid on
            the Note;

                        Third, to the payment of any other Obligations due
            (other than principal and interest) under this Agreement and the
            Loan Documents;

                        Fourth, to the payment of the outstanding principal
            balance of the Note;

                        Fifth, to any remaining Obligations; and

                        Finally, to the payment to the Borrowers, or to their
            successors or assigns, or as a court of competent jurisdiction may
            direct, of any surplus then remaining from such proceeds.

                        If the proceeds of any such sale, disposition or other
            enforcement are insufficient to cover the costs and expenses of such
            sale, as aforesaid, and the payment in full of all Obligations, the
            Borrowers shall remain liable for any deficiency.

                        8.4 Lender Appointed Attorney-in-Fact. The Lender is
            hereby appointed the attorney-in-fact of the Borrowers, with full
            power of substitution, for the purpose of carrying out the
            provisions hereof and taking any action and executing any
            instruments which the Lender may deem necessary or advisable to
            accomplish the purposes hereof, which appointment as
            attorney-in-fact is irrevocable and coupled with an interest.
            Without limiting the generality of the foregoing, the Lender shall
            have the right and power to give notices of its security interest in
            the Collateral to any Person, either in the name of the Borrowers or
            in their own name, to endorse all Pledged Mortgages or Pledged
            Securities payable to the order of the Borrowers, to change or cause
            to be changed the book-entry registration or name of subscriber or
            Investor on any Pledged Security, or to receive, endorse and collect
            all checks made payable to the order of the Borrowers representing
            any payment on account of the principal of or interest on, or the
            proceeds of sale of, any of the Pledged Mortgages or Pledged
            Securities and to give full discharge for the same.

                        8.5 Right of Set-Off. If the Borrowers shall default in
            the payment of the Note, any interest accrued thereon, or any other
            sums which may become payable hereunder when due, or in the
            performance of any of its other obligations or liabilities


                                       56

<PAGE>   63

            under this Agreement, the Lender shall have the right, at any time
            and from time to time, without notice, to set-off and to appropriate
            or apply any and all property or indebtedness of any kind at any
            time held or owing by the Lender to or for the credit or the account
            of the Borrowers against and on account of the Obligations of the
            Borrowers under the Note and this Agreement, irrespective of whether
            or not the Lender shall have made any demand hereunder and whether
            or not said Obligations shall have matured.

9. NOTICES.

                        All notices, demands, consents, requests and other
            communications required or permitted to be given or made hereunder
            (collectively, "Notices") shall, except as otherwise expressly
            provided hereunder, be in writing and shall be delivered in person
            or telecopied or mailed, first class or delivered by overnight
            courier, return receipt requested, postage prepaid, addressed to the
            respective parties hereto at their respective addresses hereinafter
            set forth or, as to any such party, at such other address as may be
            designated by it in a Notice to the other. All Notices shall be
            conclusively deemed to have been properly given or made when duly
            delivered, in person, by telecopy or by overnight courier, or if
            mailed, on the date of receipt as noted on the return receipt,
            addressed as follows:

            if to the Borrowers:                BNC Mortgage, Inc.
                                                Mortgage Logic.Com, Inc.
                                                1063 McGaw Avenue
                                                Irvine, CA  92614
                                                Attention:  Pete Evans, V.P.
                                                Telecopier No.: (949) 260-6052

            if to the Lender:                   Residential Funding Corporation
                                                440 Sawgrass Corp. Parkway
                                                Suite 204
                                                Sunrise, Florida  33325
                                                Attention:  Gary Shev, Director
                                                Telecopier No.:  (954) 846-8352

10. REIMBURSEMENT OF EXPENSES; INDEMNITY.

            The Borrowers shall: (a) pay a documentation production fee of Five
Thousand Dollars ($5,000) in connection with the preparation and negotiation of
this Agreement; (b) pay such additional documentation production fees as the
Lender may require and all out-of-pocket costs and expenses of the Lender,
including, without limitation, reasonable fees, service charges and
disbursements of counsel (including allocated costs of internal counsel), in
connection with the amendment, enforcement and


                                       57

<PAGE>   64

administration of this Agreement, the Note, and other Loan Documents and the
making and repayment of the Advances and the payment of interest thereon; (c)
indemnify, pay, and hold harmless the Lender and any holder of the Note from and
against, any and all present and future stamp, documentary and other similar
taxes with respect to the foregoing matters and save the Lender and the holder
or holders of the Note harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes; and (d)
indemnify, pay and hold harmless the Lender and any of its officers, directors,
employees or agents and any subsequent holder of the Note (collectively called
the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, suits, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation, the reasonable
fees and disbursements of counsel of the Indemnitees (including allocated costs
of internal counsel) in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto) which may be imposed upon, incurred by or asserted against such
Indemnitees in any manner relating to or arising out of this Agreement, the
Note, or any other Loan Document or any of the transactions contemplated hereby
or thereby (the "Indemnified Liabilities"); provided, however, that the
Borrowers shall have no obligation hereunder with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of any such
Indemnitees. To the extent that the undertaking to indemnify, pay and hold
harmless as set forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrowers shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them. The agreement of the Borrowers contained in this
Subsection (d) shall survive the expiration or termination of this Agreement and
the payment in full of the Note. Attorneys' fees and disbursements incurred in
enforcing, or on appeal from, a judgment pursuant hereto shall be recoverable
separately from and in addition to any other amount included in such judgment,
and this clause is intended to be severable from the other provisions of this
Agreement and to survive and not be merged into such judgment.

11. FINANCIAL INFORMATION.

                        All financial statements and reports furnished to the
            Lender hereunder shall be prepared in accordance with GAAP, applied
            on a basis consistent with that applied in preparing the financial
            statements as at the end of and for the last fiscal year ended
            (except to the extent otherwise required to conform to good
            accounting practice).


                                       58

<PAGE>   65

12. MISCELLANEOUS.

                        12.1 Terms Binding Upon Successors; Survival of
            Representations. The terms and provisions of this Agreement shall be
            binding upon and inure to the benefit of the parties hereto and
            their respective successors and assigns. All representations,
            warranties, covenants and agreements herein contained on the part of
            the Borrowers shall survive the making of any Advance and the
            execution of the Note, and shall be effective so long as the
            Commitment is outstanding hereunder or there remain any Obligations
            to be paid or performed.

                        12.2 Assignment. This Agreement may not be assigned by
            the Borrowers. This Agreement and the Note, along with the Lender's
            security interest in any or all of the Collateral, may, at any time,
            be transferred or assigned, in whole or in part, by the Lender, and
            any assignee thereof may enforce this Agreement, the Note and such
            security interest.

                        12.3 Amendments. Except as otherwise provided in this
            Agreement, this Agreement may not be amended, modified or
            supplemented unless such amendment, modification or supplement is
            set forth in a writing signed by the parties hereto.

                        12.4 Governing Law. This Agreement and the other Loan
            Documents shall be governed by the laws of the State of Minnesota,
            without reference to its principles of conflicts of laws.

                        12.5 Participations. The Lender may at any time sell,
            assign or grant participations in, or otherwise transfer to any
            other Person (a "Participant"), all or part of the Obligations.
            Without limitation of the exclusive right of the Lender to collect
            and enforce such Obligations, the Borrowers agree that each
            disposition will give rise to a debtor-creditor relationship of the
            Borrowers to the Participant, and the Borrowers authorize each
            Participant, upon the occurrence of an Event of Default, to proceed
            directly by right of setoff, banker's lien, or otherwise, against
            any assets of the Borrowers which may be in the hands of such
            Participant. The Borrowers authorize the Lender to disclose to any
            prospective Participant and any Participant any and all information
            in the Lender's possession concerning the Borrowers, this Agreement
            and the Collateral.

                        12.6 Relationship of the Parties. This Agreement
            provides for the making of Advances by the Lender, in its capacity
            as a lender, to the Borrowers, in their capacity as a borrower, and
            for the payment of interest, repayment of principal by the Borrowers
            to the Lender, and for the payment of certain fees by the Borrowers
            to the Lender. The relationship between the Lender and the Borrowers
            are limited to that of creditor/secured party, on the one hand, and



                                       59

<PAGE>   66

            debtor, on the other hand. The provisions herein for compliance with
            financial covenants and delivery of financial statements are
            intended solely for the benefit of the Lender to protect its
            interests as lender in assuring payments of interest and repayment
            of principal and payment of certain fees, and nothing contained in
            this Agreement shall be construed as permitting or obligating the
            Lender to act as a financial or business advisor or consultant to
            the Borrowers, as permitting or obligating the Lender to control the
            Borrowers or to conduct the Borrowers' operations, as creating any
            fiduciary obligation on the part of the Lender to the Borrowers, or
            as creating any joint venture, agency, or other relationship between
            the parties hereto other than as explicitly and specifically stated
            in this Agreement. The Borrowers acknowledge that they have had the
            opportunity to obtain the advice of experienced counsel of its own
            choosing in connection with the negotiation and execution of this
            Agreement and to obtain the advice of such counsel with respect to
            all matters contained herein. The Borrowers further acknowledge that
            they are experienced with respect to financial and credit matters
            and have made their own independent decisions to apply to the Lender
            for credit and to execute and deliver this Agreement.

                        12.7 Severability. If any provision of this Agreement
            shall be declared to be illegal or unenforceable in any respect,
            such illegal or unenforceable provision shall be and become
            absolutely null and void and of no force and effect as though such
            provision were not in fact set forth herein, but all other
            covenants, terms, conditions and provisions hereof shall
            nevertheless continue to be valid and enforceable.

                        12.8 Operational Reviews. From time to time upon
            request, the Borrowers shall permit the Lender or its representative
            access to their premises and records, for the purpose of conducting
            a review of the Borrowers' general mortgage business methods,
            policies, and procedures, auditing loan files and reviewing
            financial and operational aspects of the Borrowers' business.

                        12.9 Consent to Credit References. The Borrowers hereby
            consent to the disclosure of information regarding the Borrowers and
            their relationships with the Lender to Persons making credit
            inquiries to the Lender. This consent is revocable by the Borrowers
            at any time upon Notice to the Lender as provided in Section 9
            hereof.

                        12.10 Consent to Jurisdiction. The Borrowers hereby
            agree that any action or proceeding under the Loan Documents, the
            Note or any document delivered pursuant hereto may be commenced
            against it in any court of competent jurisdiction within the State
            of Minnesota, by service of process upon the



                                       60

<PAGE>   67

            Borrowers by first class registered or certified mail, return
            receipt requested, addressed to the Borrowers at their address last
            known to the Lender. The Borrowers agree that any such suit, action
            or proceeding arising out of or relating to this Agreement or any
            other such document may be instituted in the Hennepin County State
            District Court or in the United States District Court for the
            District of Minnesota at the option of the Lender; and the Borrowers
            hereby waive any objection to the jurisdiction or venue of any such
            court with respect to, or the convenience of any court as a forum
            for, any such suit, action or proceeding. Nothing herein shall
            affect the right of the Lender to accomplish service of process in
            any other manner permitted by law or to commence legal proceedings
            or otherwise proceed against the Borrowers in any other jurisdiction
            or court.

                        12.11 Counterparts. This Agreement may be executed in
            any number of counterparts, each of which shall be deemed an
            original, but all such counterparts shall together constitute but
            one and the same instrument.

                        12.12 Entire Agreement. This Agreement, the Note and the
            other Loan Documents represent the final agreement among the parties
            hereto and thereto with respect to the subject matter hereof and
            thereof, and may not be contradicted by evidence of prior or
            contemporaneous oral agreements among such parties. There are no
            oral agreements among the parties with respect to the subject matter
            hereof and thereof.

                        12.13 WAIVER OF JURY TRIAL. THE BORROWERS AND THE LENDER
            EACH HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF
            ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT TO
            TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
            HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY
            GIVEN, KNOWINGLY AND VOLUNTARILY, BY THE BORROWERS AND THE LENDER,
            AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
            AND EACH ISSUE AS TO WHICH THE RIGHT OF A JURY TRIAL WOULD OTHERWISE
            ACCRUE. THE LENDER AND THE BORROWERS ARE EACH HEREBY AUTHORIZED AND
            REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION
            OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS
            CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY
            TRIAL. FURTHER, THE BORROWERS AND THE LENDER EACH HEREBY CERTIFIES
            THAT NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING THE
            OTHER PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO
            ANY OF ITS REPRESENTATIVES OR AGENTS THAT THE OTHER PARTY WILL NOT
            SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.



                                       61

<PAGE>   68

                                         BNC MORTGAGE, INC., a Delaware
                                         corporation

                                         By:
                                              ----------------------------------

                                         Its: 
                                              ----------------------------------


                                         MORTGAGE LOGIC.COM, INC., a
                                         California corporation

                                         By:
                                              ----------------------------------

                                         Its: 
                                              ----------------------------------


                                         RESIDENTIAL FUNDING CORPORATION,
                                         a Delaware corporation

                                         By:
                                              ----------------------------------
                                         Its: Director

STATE OF _______________  )
                          ) ss
COUNTY OF ______________  )

            On                  , 1999, before me, a Notary Public,
personally appeared                                 , the
              of BNC MORTGAGE, INC., a Delaware corporation, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.

            WITNESS my hand and official seal.


                                                 -------------------------------
                                                 Notary Public
(SEAL)                                           My Commission Expires:
                                                                        --------
STATE OF _______________  )
                          ) ss
COUNTY OF ______________  )

            On                  , 1999, before me, a Notary Public,
personally appeared                                 , the
              of MORTGAGE LOGIC.COM, INC., a California corporation, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she


                                       62

<PAGE>   69



executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

            WITNESS my hand and official seal.



                                                 -------------------------------
                                                 Notary Public
(SEAL)                                           My Commission Expires:
                                                                        --------



                                       63

<PAGE>   70


STATE OF _______________  )
                          ) ss
COUNTY OF ______________  )

            On , 1999, before me, a Notary Public, personally appeared , the
Director of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.

            WITNESS my hand and official seal.



                                                 -------------------------------
                                                 Notary Public
(SEAL)                                           My Commission Expires:
                                                                        --------



                                       64