MASTER REPURCHASE AGREEMENT GOVERNING
                          PURCHASES AND SALES OF ASSETS

                                                      Dated as of August 9, 1999

Between:

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., as Buyer

and

CONTIFINANCIAL CORPORATION, as Seller

1. APPLICABILITY

            From time to time, the parties hereto shall, subject to the terms of
this  Agreement,  enter into  transactions in which  ContiFinancial  Corporation
("Seller"),  a Delaware  corporation,  agrees to transfer to  Greenwich  Capital
Financial  Products,  Inc.  ("Buyer"),  a Delaware  corporation,  certain Assets
against the transfer of funds by Buyer,  with a simultaneous  agreement by Buyer
to transfer  to Seller such Assets at a date  certain not later than thirty (30)
days after the date of transfer,  as specified in the Purchase Request,  against
the  transfer  of funds by Seller.  Each such  transaction  shall be referred to
herein  as a  "Transaction"  and shall be  governed  by this  Agreement,  unless
otherwise  agreed in  writing.  Buyer  shall,  at the  request  of the Seller in
accordance with the provisions set forth in this Agreement,  upon the completion
of a Transaction and receipt or giving,  as applicable,  of a Purchase  Request,
enter  additional  Transactions  with respect to the Assets,  provided  that the
duration of the  Transactions  shall not extend beyond the Final Repurchase Date
and the terms and conditions in this Agreement shall otherwise be satisfied.

2. DEFINITIONS

            "Accepted Servicing  Practices" means, with respect to any Purchased
Asset,  those  loan  servicing  practices  set  forth in the  Interim  Servicing
Addendum  attached  hereto as Exhibit XI, which  Interim  Servicing  Addendum is
incorporated herein by reference.

            "Acquisition  Agreement"  means,  with respect to any Eligible Asset
and Fallout Asset,  the document  governing the acquisition of such Asset by the
Seller.

            "Act of Insolvency"  means,  with respect to Seller and its Material
Subsidiaries,  (i) the filing of a  petition,  commencing,  or  authorizing  the
commencement  of any  case  or  proceeding  under  any  bankruptcy,  insolvency,
reorganization,   liquidation,  dissolution  or  similar  law  relating  to  the
protection  of creditors of the Seller or any of its Material  Subsidiaries,  or
suffering any such  petition or proceeding to be commenced by another;  provided
that any actively disputed petition or proceeding commenced by another shall not
constitute  an Act of  Insolvency  unless  such  petition or  proceeding  is not
dismissed within 30 days of its

<PAGE>

commencement,  (ii) seeking the appointment of a receiver, trustee, custodian or
similar official for Seller or a Material  Subsidiary or any substantial part of
the property of either,  (iii) the  appointment of a receiver,  conservator,  or
manager  for  Seller or a Material  Subsidiary  or any  substantial  part of the
property  of  either  by  any  governmental   agency  or  authority  having  the
jurisdiction  to do so,  (iv) the  making or  offering  by Seller or a  Material
Subsidiary  of  a  composition  with  its  respective  creditors  or  a  general
assignment for the benefit of creditors,  (v) the admission in writing by Seller
or a Material  Subsidiary of such party's  inability to pay its ordinary  course
trade debts as they become due or mature, or (vi) any Governmental  Authority or
agency  or any  person,  agency  or entity  acting  or  purporting  to act under
Governmental  Authority  shall  have  taken  any  action  to  condemn,  seize or
appropriate,  or to assume custody or control of, all or any substantial part of
the property of Seller or a Material Subsidiary,  or shall have taken any action
to displace  the  management  of such party or to curtail its  authority  in the
conduct of the business of such party.

            "Additional  Eligible  Asset"  means an Eligible  Asset  provided by
Seller to Buyer or its designee pursuant to Section 4(a).

            "Affiliate" means, with respect to any Person, any other Person that
directly  or  indirectly  controls,  or is  under  common  control  with,  or is
controlled by, such Person. As used in this definition, "control" (together with
the  correlative  meanings of  "controlled  by" and "under common control with")
means possession,  directly or indirectly,  of the power (a) to vote 10% or more
of the securities (on a fully diluted  basis) having  ordinary  voting power for
the directors or managing general partners (or their equivalent) of such Person,
or (b) to direct or cause the  direction of the  management  or policies of such
Person,  whether  through  ownership  of  securities  or  partnership  or  other
ownership interests, by contract or otherwise.

            "Affiliate  Transaction"  shall have the meaning assigned thereto in
Section 11(h) hereto.

            "Agreement"  means  this  Master  Repurchase   Agreement   Governing
Purchases and Sales of Assets,  as amended,  supplemented or otherwise  modified
from time to time.

            "American General" means American General Finance,  Inc., a Delaware
corporation.

            "American  General  Loan" means a Mortgage Loan the  origination  of
which has been  financed by  American  General  pursuant to a certain  warehouse
financing agreement or repurchase agreement by and between the Seller (or one of
its Affiliates) and American General (or one of its Affiliates).

            "Appraised  Value"  means  the  reconciled  value  of the  Mortgaged
Property  as  set  forth  in the  appraisal  prepared  in  accordance  with  the
Underwriting  Guidelines  made in connection with the origination of the related
Eligible Asset.

            "Asset" means an Eligible  Asset, a Fallout Asset or any other asset
as mutually agreed upon by Buyer and Seller.


                                     - 2 -
<PAGE>

            "Asset  Disposition"  means  any  sale,  lease,  transfer  or  other
disposition (or series of related sales,  leases,  transfers or dispositions) by
the Seller or any  Subsidiary,  including any  disposition by means of a merger,
consolidation or similar  transaction (each referred to for the purposes of this
definition  as a  "disposition"),  of (i)  any  shares  of  Capital  Stock  of a
Subsidiary  (other  than  directors'  qualifying  shares or shares  required  by
applicable  law to be held by a Person  other than the Seller or a  Subsidiary),
(ii) all or substantially  all the assets of any division or line of business of
the  Seller  or any  Subsidiary,  (iii) any  other  assets of the  Seller or any
Subsidiary  outside of the  ordinary  course of  business  of the Seller or such
Subsidiary, (iv) any Investment in a Strategic Alliance Client or (v) any Excess
Spread  Receivables  (other than in the case of (i), (ii),  (iii),  (iv) and (v)
above,  (x) a  disposition  by a  Subsidiary  to the  Seller or the  Seller or a
Subsidiary to a  Subsidiary,  (y) a  disposition  that  constitutes a Restricted
Payment permitted  hereunder,  or (z) a disposition of assets (including related
assets) for an aggregate consideration of $1.0 million or less).

            "Asset Documents" means the documents comprising the Asset File.

            "Asset  File" means the  documents  and  information  required to be
delivered  to the  Custodian by the Seller for each  Eligible  Asset and Fallout
Asset, pursuant to the related Custodial Agreement, together with any additional
documents  and  information  required to be  delivered  to Buyer or its designee
(including the Custodian).

            "Asset  Representations" means the Mortgage Loan Representations set
forth in Exhibit V hereto, and any other representations required for additional
Eligible  Assets or Fallout  Assets  that may be  accepted by Buyer from time to
time.

            "Asset Schedule" means the schedule attached hereto as Exhibit I.

            "Asset  Tape"  means  a  computer-readable   magnetic   transmission
containing the  information  with respect to each Asset,  to be delivered by the
Seller to the Buyer  pursuant  to  Section  3(b)(v)  hereof  and with the fields
indicated on Exhibit X attached hereto.

            "Assignment and Conveyance" shall mean that certain agreement in the
form of Exhibit VII attached hereto by and between the Seller, the Buyer and the
Servicer,  pursuant to which the Seller shall assign and convey to the Buyer all
of its right title and interest in and to the applicable  Acquisition  Agreement
and the  applicable  Servicing  Agreement to the extent related to the Purchased
Assets hereunder.

            "Assignment  of Mortgage"  means,  with respect to any Mortgage,  an
assignment  of the  Mortgage,  notice of transfer or  equivalent  instrument  in
recordable  form,  sufficient  under the laws of the  jurisdiction  wherein  the
related  property  is  located  to  reflect  the  assignment  and  pledge of the
Mortgage.

            "Available  Amount" shall mean the Committed Amount minus the sum of
the aggregate Purchase Price with respect to Transactions outstanding hereunder.


                                     - 3 -
<PAGE>

            "Board of  Directors"  means the Board of Directors of the Seller or
any  committee  thereof  duly  authorized  to act on  behalf  of such  Board  of
Directors.

            "Breach",  as that term relates to any  representation,  warranty or
covenant in this  Agreement,  means that such  representation  or  warranty  was
incorrect or untrue in any  material  respect when made or repeated or deemed to
have been made or  repeated,  or Seller has failed to comply  with a covenant in
any material respect.

            "Breakage Costs" has the meaning specified in Section 3(f)(iii).

            "Business  Day" means any day other than (i) a Saturday or Sunday or
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York or the Custodian is authorized or obligated by law or executive order to be
closed or (iii) a day on which the Buyer is closed for business.

            "Buyer" means Greenwich Capital Financial Products, Inc.

            "Buyer's Account" has the meaning specified in Section 25(f).

            "Capital  Stock" of any Person means any and all shares,  interests,
share  capital,  rights  to  subscribe  for  or  purchase,   warrants,  options,
participations,  or other equivalents of or interests or membership interests in
(however  designated) equity of such Person,  including any Preferred Stock, any
limited  or general  partnership  interest  and any  limited  liability  company
membership  interest (but excluding any debt  securities  convertible  into such
equity), any rights to subscribe for or purchase any thereof.

            "Cash  Equivalents"  means (a) securities with maturities of 90 days
or less from the date of  acquisition  issued or fully  guaranteed or insured by
the United States Government or any agency thereof,  (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition  and overnight bank deposits of any  commercial  bank having capital
and  surplus  in excess  of  $500,000,000,  (c)  repurchase  obligations  of any
commercial  bank satisfying the  requirements of clause (b) of this  definition,
having a term of not more than seven days with respect to  securities  issued or
fully  guaranteed or insured by the United  States  Government,  (d)  commercial
paper of a  domestic  issuer  rated at least A-1 or the  equivalent  thereof  by
Standard and Poor's  Ratings Group ("S&P") or P-1 or the  equivalent  thereof by
Moody's Investors Service,  Inc.  ("Moody's") and in either case maturing within
90 days after the day of acquisition,  (e) securities with maturities of 90 days
or less from the date of  acquisition  issued or fully  guaranteed by any state,
commonwealth or territory of the United States, by any political  subdivision or
taxing authority of any such state,  commonwealth or territory or by any foreign
government,  the securities of which state, commonwealth,  territory,  political
subdivision,  taxing  authority or foreign  government  (as the case may be) are
rated at least A by S&P or A by Moody's,  (f) securities  with  maturities of 90
days or less from the date of  acquisition  backed by standby  letters of credit
issued by any commercial bank satisfying the  requirements of clause (b) of this
definition  or (g) shares of money market  mutual or similar  funds which invest
exclusively in assets  satisfying the requirements of clauses (a) through (f) of
this definition.


                                     - 4 -
<PAGE>

            "Change in Control"  means the  occurrence  of any of the  following
events:

            (i) Any "person" (as such term is used in Section 13(d) and 14(d) of
      the Exchange  Act),  other than any  Permitted  Holder,  is or becomes the
      "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
      Act,  except  that  such  person  shall  be  deemed  to  have  "beneficial
      ownership"  of all shares  that any such  person has the right to acquire,
      whether such right is exercisable immediately or only after the passage of
      time), directly or indirectly,  of more than 35% of the total voting power
      of the Voting Stock of such Person; provided,  however, that the Permitted
      Holders  beneficially  own (as  defined in Rule 13d-3 and Rule 13d-5 under
      the  Exchange  Act),  directly or  indirectly,  in the  aggregate a lesser
      percentage  of the total voting power of the Voting Stock of the Seller or
      any Material  Subsidiary  than such other person and do not have the right
      or ability by voting  power,  contract or  otherwise to elect or designate
      for  election a majority of the Board of  Directors  (for the  purposes of
      this clause (i), such other person shall be deemed to beneficially own any
      Voting  Stock of a  corporation  held by  another  corporation  (a "parent
      corporation"),  if such other person is the  beneficial  owner (as defined
      above for such person),  directly or  indirectly,  of more than 35% of the
      voting  power of the  Voting  Stock  of such  parent  corporation  and the
      Permitted  Holders  beneficially  own (as defined  above for the Permitted
      Holders),  directly or indirectly, in the aggregate a lesser percentage of
      the voting power of the Voting Stock of such parent corporation and do not
      have the right or ability by voting power,  contract or otherwise to elect
      or  designate  for  election a majority of the board of  directors of such
      parent corporation);

            (ii) during any period of two consecutive years,  individuals who at
      the beginning of such period constituted the Board of Directors  (together
      with any new directors  whose election by such Board of Directors or whose
      nomination for election by the  shareholders of the Seller or any Material
      Subsidiary  was  approved  by a vote of  66-2/3% of the  directors  of the
      Seller or any  Material  Subsidiary  then still in office who were  either
      directors at the beginning of such period or whose  election or nomination
      for  election  was  previously  so  approved)  cease  for  any  reason  to
      constitute a majority of the Board of Directors then in office; or

            (iii) the  merger or  consolidation  of the  Seller or any  Material
      Subsidiary  with or into  another  Person or the merger of another  Person
      with or into the Seller or any Material Subsidiary, as the case may be, or
      the  liquidation,  wind-up or  dissolution  of the Seller or any  Material
      Subsidiary,  as the case may be, or the sale of all or  substantially  all
      the assets of the Seller or any Material  Subsidiary,  as the case may be,
      to another Person (other than a Person that is controlled by the Permitted
      Holders),  and,  in the  case of any such  merger  or  consolidation,  the
      securities of the Seller or any Material  Subsidiary,  as the case may be,
      that are  outstanding  immediately  prior to such  transaction  and  which
      represent  100% of the  aggregate  voting power of the Voting Stock of the
      Seller or any Material Subsidiary, as the case may be, are changed into or
      exchanged  for cash,  securities  or  property,  unless  pursuant  to such
      transaction such securities are changed into or exchanged for, in addition
      to any other consideration,  securities of the surviving


                                     - 5 -
<PAGE>

     corporation that represent  immediately after such transaction,  at least a
     majority of the aggregate voting power of the Voting Stock of the surviving
     corporation;  provided,  however,  that  the  sale  by  the  Seller  or its
     Subsidiaries  from time to time  solely of  Receivables  to a trust for the
     purpose  solely  of  effecting  one or more  securitizations  shall  not be
     treated  hereunder as a sale of all or substantially  all the assets of the
     Seller.

            Notwithstanding  the foregoing,  if at any time (i) Buyer shall have
      no obligation to purchase Assets  hereunder that were previously  financed
      by ContiTrade  Services L.L.C. or California  Lending Group, Inc. and (ii)
      no Purchased Assets subject to Transactions  constitute  Assets previously
      financed by ContiTrade  Services L.L.C. or California Lending Group, Inc.,
      then ContiTrade  Services L.L.C. or California  Lending Group,  Inc. shall
      not be considered Material  Subsidiaries for purposes of the definition of
      the term "Change of Control".

            Notwithstanding   anything   contained  in  this  Agreement  to  the
      contrary,  a Change of Control  accompanied  by an equity  infusion in the
      Seller of not less than  $100,000,000  shall  not  constitute  an Event of
      Default  under this  Agreement  for 60 days after the date of such  equity
      infusion,  unless an additional  Change of Control shall occur during such
      60 day period.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

            "Collateral" has the meaning specified in Section 6.

            "Collateral  Amount"  means,  with respect to any  Transaction,  the
amount obtained by application of the Collateral Amount Percentage to the Market
Value of the Purchased Assets for such Transaction.

            "Collateral  Amount  Percentage"  means  (i)  with  respect  to each
Eligible  Asset  (other than  Collateralized  Notes) (A) for the period from the
date of this Agreement  until August 23, 1999,  the percentage  specified by the
Buyer in its sole  discretion and (B) from and after August 23, 1999,  95%, (ii)
with respect to each Fallout Asset, the percentage applicable to such Asset that
is specified in Schedule 4 attached hereto, (iii) with respect to Collateralized
Notes, the percentage  specified by the Buyer, if Buyer approves such Assets for
purchase  hereunder,  and (iv) with respect to all other Assets,  the percentage
specified  in writing  by Buyer,  if Buyer  approves  such  Assets for  purchase
hereunder;  provided,  however,  that (A) each of the  following  categories  of
Assets set forth below as a  percentage  of all Assets  subject to  Transactions
hereunder shall not exceed the applicable sublimits set forth below and (B):

                           (1) On and after August 23, 1999,  Collateral  Amount
         Percentage  shall  be zero  with  respect  to all  Assets  which in the
         aggregate  exceed  the  following  applicable  sublimits  based  on the
         aggregate  Collateral  Amount of all  Assets  subject  to  Transactions
         hereunder:

                            Fixed Rate Loan               Adjustable Rate Loan
                               Sublimit                          Sublimit
                               --------                          --------


                                     - 6 -
<PAGE>

<TABLE>
<CAPTION>

                LTV:
<S>                      <C>          <C>                                  <C>
                        >85%          20% until August 31, 1999;           15% until August 31,1999;
                                      15% thereafter, provided Buyer may   10% thereafter, provided Buyer may
                                      increase the percentage to 20%       increase the percentage to 15%
                                      following Seller's development of    following Seller's development of
                                      a High LTV/FICO program              a High LTV/FICO program
                                      satisfactory to Buyer                satisfactory to Buyer

                        >90%                         1%                                0%

                       >100%                         0%                                0%
</TABLE>


                           (2) On and after August 23, 1999,  Collateral  Amount
         Percentage  shall be zero with  respect to all  Assets  that are Second
         Lien Mortgage Loans which in the aggregate  exceed 10% of the aggregate
         Collateral Amount of all such Assets subject to Transactions hereunder.

                           (3) On and after August 23, 1999,  Collateral  Amount
         Percentage  shall be zero with  respect to all  Assets  that are Second
         Lien  Mortgage  Loans  which  in the  aggregate  exceed  the  following
         applicable  sublimits based on the aggregate  Collateral  Amount of all
         such Assets subject to Transactions hereunder:

                                             CLTV                   Sublimit
                                            >85%                       25%
                                            >90%                        1%
                                            >95%                        0%


                           (4) On and after August 23, 1999,  Collateral  Amount
         Percentage  shall be zero with  respect  to all  Assets  that have FICO
         scores less than 550 (to the extent a FICO score is available  for such
         Asset) which in the aggregate exceed the following applicable sublimits
         based on the aggregate  Collateral Amount of all such Assets subject to
         Transactions hereunder:

                   Fixed Rate Loan                 Adjustable Rate Loan
                      Sublimit                            Sublimit

             ---------------------------       --------------------------------
             10% until August 31, 1999;        10% until August 31, 1999; 5%
             5% thereafter                     thereafter

                           (5) Collateral  Amount  Percentage shall be zero with
         respect to all Assets that constitute  American  General Loans which in
         the  aggregate  exceed 10% of the  aggregate  Collateral  Amount of all
         Assets subject to Transactions hereunder.


                                     - 7 -
<PAGE>

                           (6) On and after August 23, 1999,  Collateral  Amount
         Percentage  shall be zero with  respect to all Assets  that  constitute
         Section 32  Mortgage  Loans  which in the  aggregate  exceed 10% of the
         aggregate  Collateral  Amount of all  Assets  subject  to  Transactions
         hereunder.

                           (7) Collateral  Amount  Percentage shall be zero with
         respect  to  all  Empire  Collateralized  Notes  (I)  that  exceed  the
         applicable  Collateralized  Note  Sublimit  or (II) which have not been
         repurchased by Seller hereunder by the earlier of (x) 45 days after the
         applicable Purchase Date and (y) November 3, 1999.

                           (8) Collateral  Amount  Percentage shall be zero with
         respect  to  all  Collateralized   Notes  that  exceed  the  applicable
         Collateralized Note Sublimit.

                           (9) Collateral  Amount  Percentage  shall be zero (I)
         with  respect to all  Eligible  Assets  that cease to qualify as either
         Eligible  Assets or Fallout Assets and (II) with respect to all Fallout
         Assets  that cease to qualify as Fallout  Assets or exceed the  Fallout
         Loan Sublimit.

            "Collateral Deficit" has the meaning specified in Section 4(a).

            "Collateralized  Note" means a promissory  note made in favor of the
Seller, or a Subsidiary of Seller and endorsed by such subsidiary to the Seller,
and secured by pools of Underlying Mortgage Loans;  provided,  however, that the
obligor  under such  Collateralized  Note has  pledged and  hypothecated  to the
Seller,  and has granted a continuing lien and first priority  security interest
in favor of the  Seller  in  collateral  compromised  of  Eligible  Assets;  and
provided  further,  however,  that the Seller has pledged such collateral to the
Buyer,  has granted to Buyer a continuing  lien on and first  priority  security
interest in such collateral,  as of the related Purchase Date, and has delivered
to Buyer  each of the  documents  set  forth in  Section  3(b)(xi),  in form and
substance satisfactory to Buyer and its counsel.

            "Collateralized  Note Sublimit" means (i) with respect to all Empire
Collateralized  Notes,  $25,000,000,  and (ii) with respect to all  Collaterized
Notes other than Empire Collateralized Notes, $50,000,000.

            "Combined  LTV" or "CLTV"  shall mean with  respect to any  Mortgage
Loan,  the ratio of (a) the Par Amount as of the related date of  origination of
such Second Lien  Mortgage  Loan of (i) the Second Lien  Mortgage Loan plus (ii)
the  mortgage  loan  constituting  the first lien (if any) to (b) the  Appraised
Value of the Mortgaged Property.

            "Committed  Amount"  means  $200,000,000  (provided  that during the
Overadvance Period the amount shall be $250,000,000).

            "Commitment  Fee" means the  commitment  fee specified in the Master
Facilities Agreement.


                                     - 8 -
<PAGE>

            "Commonly  Controlled  Entity"  means  an  entity,  whether  or  not
incorporated,  which is under common  control with Seller  within the meaning of
Section 4001 of ERISA or is part of a group which  includes  Seller and which is
treated as a single employer under Section 414 of the Code.

            "Contractual  Obligation"  means as to any Person,  any provision of
any agreement,  instrument or other  undertaking to which such Person is a party
or by which it or any of its property is bound or any  provision of any security
issued by such Person.

            "Custodial Agreement" means that certain custodial agreement,  dated
as of August 9, 1999, among the Custodian,  Buyer and Seller,  as the same shall
be modified and supplemented and in effect from time to time.

            "Custodian"  means  Manufacturers  and  Traders  Trust  Company,  as
custodian  under the  Custodial  Agreement,  and its  successors  and  permitted
assigns thereunder.

            "Default"  means an event that with  notice or lapse of time or both
would become an Event of Default.

            "Delinquent"  means,  with respect to any Asset,  the period of time
from the date on which an Obligor fails to pay an obligation  under the terms of
such Asset (without regard to any applicable grace periods) to the date on which
such payment is made.

            "Disqualified  Stock" means, with respect to any Person, any Capital
Stock  which by its  terms  (or by the terms of any  security  into  which it is
convertible or for which it is  exchangeable) or upon the happening of any event
(i) matures or is mandatorily  redeemable  pursuant to a sinking fund obligation
or  otherwise,   (ii)  is  convertible  or  exchangeable   for  Indebtedness  or
Disqualified  Stock or (iii) is redeemable at the option of the holder  thereof,
in each  case in whole or in part on or prior to the  first  anniversary  of the
Stated Maturity of the  Securities;  provided,  however,  that any Capital Stock
that would not constitute  Disqualified  Stock but for provisions thereof giving
holders  thereof the right to require such Person to  repurchase  or redeem such
Capital  Stock upon the  occurrence  of an "asset  sale" or "change of  control"
occurring  prior  to  the  first  anniversary  of  the  Stated  Maturity  of the
Securities  shall  not  constitute  Disqualified  Stock if the  "asset  sale" or
"change of control"  provisions  applicable  to such Capital  Stock are not more
favorable  to the  holders  of such  Capital  Stock that the  provisions  of the
Indenture.

                  "Eligible  Asset" means a Mortgage  Loan secured by a first or
second Mortgage lien on a one-to-four family  residential  Mortgaged Property or
Mixed Use Mortgaged Property as to which the Mortgage Loan  Representations  are
true and  correct,  and (i) which has not been  subject  to  Transactions  for a
period in excess of 90 days from the date on which it is first made subject to a
Transaction,  (ii)  which is not 29 days or more  Delinquent,  (iii)  which  was
originated not more than (A) sixty (60) days prior to the date the Mortgage Loan
is first subject to a Transaction  provided such Mortgage Loan was originated by
the  Seller  or a  Qualified  Originator  affiliated  with  the  Seller  or  (B)
seventy-five (75) days prior to the date the Mortgage Loan is first subject to a
Transaction provided such Mortgage Loan was originated by a Qualified Originator


                                     - 9 -
<PAGE>

not  affiliated  with the  Seller,  (iv)  which has not been  released  from the
possession  of the Custodian to the Seller or its designee in excess of the time
permitted  by the  Custodial  Agreement,  (v) which is not subject to a Material
Exception (as defined in the Custodial  Agreement),  (vi) which  complies in all
material  respects  with  the  Underwriting  Guidelines,  (vii)  which  has been
originated  by the Seller or a Qualified  Originator,  (viii) which has not been
subject to any prior financing or previously  purchased by any Person other than
the Buyer  pursuant to this  Agreement or the Seller  pursuant to an Acquisition
Agreement,  except for American  General Loans, and (ix) which, in the case of a
Second  Lien  Mortgage  Loan,  does not bear  interest  at an  adjustable  rate.
Eligible  Asset  shall also mean  certain  Collateralized  Notes which Buyer has
approved for purchase hereunder.

            "Empire  Collateralized Note" means that certain Collateralized Note
secured by the Collateral  defined in the Amended and Restated Interim Warehouse
and Security  Agreement,  dated as of March 29, 1995, among ContiTrade  Services
Corporation (the "Lender") and Empire Funding Corp. (the  "Borrower"),  amending
and restating the Interim  Warehouse and Security  Agreement dated as of October
15, 1993, as amended by an agreement  dated as of August 18, 1994 (the "Original
Warehouse  Agreement") and conforming to the  representations and warranties set
forth in Exhibit V(A) hereto.

            "Empire    Collateralized    Note    Representations"    means   the
representations and warranties set forth in Exhibit V(A) hereto.

            "Engagement Letter" means that certain engagement letter,  dated the
date of this  Agreement,  among  Seller,  ContiMortgage  Corporation,  ContiWest
Corporation,  Greenwich Capital Markets, Inc. and Buyer relating to, among other
things,  the  securitization,  after the date hereof,  of certain mortgage loans
originated or purchased by Seller and its Affiliates.

            "ERISA" means the Employee  Retirement  Income Security Act of 1974,
as amended from time to time.

            "ERISA Affiliate" means any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which  the  Seller  is a member  and (ii)  solely  for  purposes  of
potential  liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section  302(f) of ERISA and Section  412(n)
of the Code,  described in Section 414(m) or (o) of the Code of which the Seller
is a member.

            "Event of Default" has the meaning specified in Section 13.

            "Exception" has the meaning specified in the Custodial Agreement.

            "Excess Spread" means, over the life of a "pool" of Receivables that
have  been sold by a Person to a trust or other  Person in a  securitization  or
sale, the rights retained by such Person or its Subsidiaries at or subsequent to
the closing of such securitization or sale to receive cash flows attributable to
such "pool".


                                     - 10 -
<PAGE>

            "Excess  Spread  Receivable"  of a Person means the  contractual  or
certificated  right to Excess Spread  capitalized on such Person's  consolidated
balance  sheet (the  amount of which  shall be the  present  value of the Excess
Spread, calculated in accordance with GAAP).

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
amended.

            "Existing  Repo  Facility"  means the  Master  Repurchase  Agreement
Governing Purchases and Sales of Eligible Assets, dated as of December 21, 1998,
between Seller and Buyer, as amended,  supplemented  or otherwise  modified from
time to time.

            "Exit  Fee"  means,   (i)  with  respect  to  each  Purchased  Asset
repurchased  by the Seller and sold by the Seller to a third  party  without the
Buyer's guaranty of or assumption of responsibility for the  representations and
warranties relating to such Asset, an amount equal to 0.25% of the Par Amount of
such Asset on the  applicable  Repurchase  Date,  and (ii) with  respect to each
Purchased  Asset  repurchased  by the  Seller  and sold by the Seller to a third
party with the  Buyer's  guaranty of or  assumption  of  responsibility  for the
representations  and warranties relating to such Asset, an amount equal to 1% of
the Par Amount of such Asset on the applicable Repurchase Date.

            "Facility Documents" has the meaning specified in Section 3(a).

            "Fallout  Asset" means certain  Mortgage  Loans each of which (a)(i)
does not qualify as an Eligible  Asset on the  applicable  Purchase Date or (ii)
qualifies as an Eligible  Asset on the  applicable  Purchase Date but thereafter
ceases to be an Eligible Asset and (b) falls into one of the  categories  listed
on Schedule 4 hereto.

            "Fallout Asset Sublimit" means $50,000,000.

            "Federal Funds Rate" means, for any day, the weighted average of the
rates on  overnight  federal  funds  transactions  with  members of the  Federal
Reserve  System  arranged by federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations  for the day of such  transactions  received  by the Buyer from three
federal funds brokers of recognized standing selected by it.

            "Final  Repurchase Date" means the earlier of (i) March 31, 2000 and
(ii) the date of the occurrence of an uncured Event of Default.

            "First Lien Mortgage Loan" means a Mortgage Loan secured by the lien
on the Mortgaged Property, subject to no prior liens on such Mortgaged Property.

            "GAAP" means generally accepted  accounting  principles in effect in
the United States as amended from time to time.

            "Governmental Authority" means any nation or government,  any state,
agency,  instrumentality  or other  political  subdivision  thereof,  any entity
exercising  executive,  legislative,


                                     - 11 -
<PAGE>

judicial,  regulatory or administrative functions of or pertaining to government
and any court or  arbitrator  having  jurisdiction  over the Seller,  any of its
Subsidiaries or any of its properties.

            "Guarantee"  means any obligation,  contingent or otherwise,  of any
Person directly or indirectly  guaranteeing any Indebtedness or other obligation
of any Person and any obligation,  direct or indirect,  contingent or otherwise,
of such  Person  (i) to  purchase  or pay (or  advance  or supply  funds for the
purchase or payment of) such  Indebtedness  or other  obligation  of such Person
(whether  arising by virtue of  partnership  arrangements,  or by  agreements to
keep-well,  to purchase assets, goods, securities or services, to take-or-pay or
to maintain  financial  statement  conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other  obligation of the payment  thereof or to protect such obligee  against
loss in respect thereof (in whole or in part); provided,  however, that the term
"Guarantee"  shall not include  endorsements  for  collection  or deposit in the
ordinary  course  of  business.  The  term  "Guarantee"  used  as a  verb  has a
corresponding meaning.

            "HOEPA" means the Home Ownership and Equity Protection Act of 1994.

            "Income" means, with respect to any Asset at any time, any principal
thereof  then  payable and all  interest  or  dividends  or other  distributions
payable thereon less any related  servicing  fee(s) charged by the Servicer,  as
approved by Buyer.

            "Indebtedness"  shall  mean,  of any  Person  at any  date,  without
duplication,  (a) all indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt  securities) or for the deferred  purchase
price of property or services (other than current trade liabilities  incurred in
the  ordinary  course of  business  and  payable in  accordance  with  customary
practices),  (b) any other  indebtedness  of such Person which is evidenced by a
note, bond, debenture or similar instrument,  (c) all obligations of such Person
under financing leases, (d) all obligations of such Person in respect of letters
of credit,  acceptances or similar instruments issued or created for the account
of such Person and (e) all liabilities secured by any lien on any property owned
by such Person even  though  such  Person has not  assumed or  otherwise  become
liable for the payment thereof.

            "Indenture" means the Indenture, dated as of August 15, 1996 between
Seller and Chase Manhattan Bank.

            "Interest  Period"  means,  with  respect  to any  Transaction,  (i)
initially,  the period  commencing  on the  Purchase  Date and ending on the day
immediately  preceding the next Payment Date (the  "Interest  Reset Date"),  and
(ii)  thereafter,  each period  commencing  on the  Payment  Date of a month and
ending on the  calendar  day prior to the  Payment  Date of the next  succeeding
month.  Notwithstanding the foregoing:  (A) no Interest Period may end after the
Final  Repurchase Date; and (B) each Interest Period that would otherwise end on
a day that is not a Business Day shall end on the next succeeding Business Day.

            "Interest Reset Date" has the meaning set forth in the definition of
Interest Period.


                                     - 12 -
<PAGE>

            "Interim Servicer" means  ContiMortgage  Corporation in its capacity
as the party obligated to maintain or cause the Purchased  Assets to be serviced
in  accordance  with Accepted  Serving  Practices  during the Interim  Servicing
Period in accordance with Section 25.

            "Interim  Servicing  Period"  means,  with respect to any  Purchased
Asset,  the period  commencing  on the related  Purchase  Date and ending on the
earlier  to  occur  of (i) the  successful  completion  of the  transfer  to the
servicer of servicing of such Purchased Asset,  including all applicable  system
transfers,  document transfers and mailing of required notices, and (ii) 30 days
after such Purchase Date;  provided,  that Buyer shall have the option to extend
the Interim  Servicing Period for one or more 30-day periods upon written notice
to the Interim Servicer.  The Buyer and Seller contemplate that such transfer of
servicing  will be  completed  within 30 days  after the  Purchase  Date of each
Purchased Asset.

            "Investment"  in any Person  means any direct or  indirect  advance,
loan (other than  advances to customers in the ordinary  course of business that
are  recorded as trade  accounts  on the  balance  sheet of the lender) or other
extensions of credit  (including by way of Guarantee or similar  arrangement) or
capital  contribution  to (by means of any transfer of cash or other property to
others or any  payment  for  property  or  services  for the  account  or use of
others), or any purchase or acquisition of Capital Stock,  Indebtedness or other
similar instruments issued by such Person.

            "Investment  Company Act" means the Investment  Company Act of 1940,
as amended.

            "LIBO Base Rate" means for any Transaction, with respect to each day
during each Interest Period pertaining to such  Transaction,  the rate per annum
equal to the rate  appearing  at page 3750 of the  Telerate  Screen as one-month
"LIBOR" on the first day of such Interest Period,  and if such rate shall not be
so  quoted,  the rate  equal to the  average  of the  rates  per  annum at which
deposits in dollars are offered for the relevant  Interest Period to major banks
in the London  interbank  market by any three major  banks,  and if such rate is
unascertainable the rate per annum at which the Buyer is offered dollar deposits
at or about 11:00 a.m.,  New York City time,  on such date by prime banks in the
interbank  eurodollar  market where the eurodollar and foreign currency exchange
operations in respect of its  Transactions are then being conducted for delivery
on such day for a period of one month, and in an amount comparable to the amount
of the Transactions to be outstanding on such day.

            "LIBO  Rate"  means with  respect to each day during  each  Interest
Period pertaining to a Transaction,  a rate per annum determined by the Buyer in
accordance with the following formula (rounded upwards to the nearest 1/100th of
one percent), which rate as determined by the Buyer shall be conclusive,  absent
manifest error by the Buyer:

                                  LIBO Base Rate
                        --------------------------------
                        1.00 - LIBO Reserve Requirements

            "LIBO Reserve  Requirements"  means for any Interest  Period for any
Transaction,  the aggregate  (without  duplication) of the rates (expressed as a
decimal  fraction) of reserve


                                     - 13 -
<PAGE>

requirements in effect on such day or during such Interest Period, as applicable
(including,  without  limitation,  basic,  supplemental,  marginal and emergency
reserves under any  regulations of the Board of Governors of the Federal Reserve
System  or  other  Governmental   Authority  having  jurisdiction  with  respect
thereto),  dealing with reserve requirements prescribed for eurocurrency funding
(currently  referred to as  "Eurocurrency  Liabilities"  in Regulation D of such
Board)  maintained by a member bank of such  Governmental  Authority.  As of the
date hereof, such reserve requirement is equal to zero.

            "Lien" means any mortgage,  lien, pledge, charge,  security interest
or similar encumbrance.

            "LTV"  means with  respect  to any  Asset,  the ratio of (a) the Par
Amount of the Asset as of the date of origination  (unless otherwise  indicated)
to (b) the Appraised Value of the Mortgaged  Property or if the loan was made in
connection with the purchase of the related  Mortgaged  Property,  the lesser of
the Appraised Value and the sales price of such property.

            "Losses"  means,  with  respect  to any  Person  (and its  officers,
directors,  agents and  employees),  any and all  liabilities,  losses,  claims,
damages,  judgments,  costs  and  expenses  of any  kind  (including  reasonable
attorneys'  fees and  disbursements)  which may be imposed on,  incurred  by, or
asserted  against  such  Person  (and  its  officers,   directors,   agents  and
employees), relating to or arising out of, this Agreement, any other document or
agreement  entered into between or among any of the parties to this Agreement in
connection herewith or any transaction contemplated hereby or thereby, and costs
and expenses  incurred in connection with the enforcement or the preservation of
rights under this Agreement, or any amendment, supplement or modification of, or
any waiver or consent  under or in respect  of, this  Agreement,  any such other
document or  agreement  entered into between or among any of the parties to this
Agreement  in  connection  herewith or any  transaction  contemplated  hereby or
thereby,  including,  without limitation,  those Losses resulting from a Breach.
Losses must be accounted for, documented in reasonable detail, and presented for
reimbursement.

            "Market Value" means the value, determined by Buyer in its sole good
faith discretion, of the Mortgage Loans as if sold in their entirety to a single
third-party purchaser.  Seller acknowledges that Buyer's determination of Market
Value is for the limited  purpose of  determining  value  hereunder  without the
ability to perform  customary  purchaser's  due diligence and is not necessarily
equivalent  to a  determination  of the fair market value of the Mortgage  Loans
achieved  by  obtaining  competing  bids  in an  orderly  market  in  which  the
originator/servicer  is not in default and the bidders have adequate opportunity
to perform customary loan and servicing due diligence.

            "Master  Facilities  Agreement" means that certain master facilities
agreement,  dated the date of this  Agreement,  among Buyer,  Greenwich  Capital
Markets, Inc., Seller, ContiMortgage Corporation and ContiWest Corporation.

            "Material  Adverse Effect" means a material  adverse effect upon (i)
the business  operations,  properties or assets of Seller and its  Subsidiaries,
taken as a whole,  (ii) the ability of Seller to perform its obligations,  or of
Buyer to enforce any of its rights or remedies,  under this


                                     - 14 -
<PAGE>

Agreement or any of documents to be executed and/or delivered  hereunder,  (iii)
the validity or  enforceability  of any of the Facility  Documents;  or (iv) the
Collateral  taken as a whole, in the case of (i), (ii), (iii) and (iv) above (A)
taking  into  consideration  the  financial  condition  of the  Seller  and  its
Subsidiaries  as of the  date of this  Agreement  and (B)  without  taking  into
consideration any further deterioration of the financial condition of the Seller
and its Subsidiaries after the date of this Agreement.

            "Material  Subsidiary"  means  (a) any  Subsidiary  identified  as a
Material  Subsidiary  on  Schedule 1  attached  hereto,  and (b) any  Subsidiary
created  or  acquired  after the date of this  Agreement  that is a  Significant
Subsidiary of the Seller.

            "Maximum  Transaction Amount" means, at any time, the sum of (i) the
aggregate  Purchase Price for Purchased  Assets subject to Transactions and (ii)
the aggregate  initial  purchase price of mortgage loans subject to the Purchase
Facility.

            "Mixed Use  Mortgaged  Property"  means a Mortgage Loan secured by a
Mortgaged Property that is used primarily for residential purposes, but which is
also used for non-residential purposes.

            "Monoline  Insurance  Company"  means Ambac  Assurance  Corporation,
Municipal Bond Investors  Assurance  Corporation,  Financial  Guaranty Insurance
Company,  Capital Markets Assurance  Corporation,  Financial  Security Assurance
Inc. or GE Mortgage Insurance Company.

            "Monthly  Payment" means the scheduled  monthly payment of principal
and  interest  on an Asset as adjusted in  accordance  with  changes in the Note
Interest  Rate pursuant to the  provisions  of the Note for an  adjustable  rate
Asset.

            "Moody's" means Moody's Investor Service, Inc.

            "Mortgage" means a mortgage,  deed of trust,  deed to secure debt or
other  instrument,  creating a valid and  enforceable  first or second  lien (as
identified  in the  related  Asset  Tape) on an  estate  in fee  simple  in real
property  and the  improvements  thereon,  securing a  Mortgage  Note or similar
evidence of indebtedness (or, with respect to multifamily or commercial Mortgage
Loans,  if accepted  hereunder,  the fee or leasehold  estate,  in real property
securing the  Mortgage  Note;  and the  assignment  of rents and leases  related
thereto).

            "Mortgage  Loan" means a mortgage  loan which the Custodian has been
instructed to hold for the Buyer pursuant to the Custodial Agreement,  and which
Mortgage  Loan  includes,  without  limitation,  a  Mortgage  Note  and  related
Mortgage.

            "Mortgage Loan Representations"  means the representations set forth
in Exhibit V hereto.

            "Mortgage  Note" means a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage.


                                     - 15 -
<PAGE>

            "Mortgaged  Property" means the real property securing  repayment of
the debt evidenced by a Mortgage Note.

            "Mortgagee"  means the record holder of a Mortgage Note secured by a
Mortgage.

            "Mortgagor"  means the obligor on a Mortgage Note and the grantor of
the related Mortgage.

            "Multiemployer  Plan" means a Plan which is a multiemployer  plan as
defined in Section 4001(a)(3) of ERISA.

            "Non-Excluded  Taxes" has the  meaning  provided  in  Section  29(f)
hereof.

            "Note"  means a  Mortgage  Note or  other  promissory  note or other
evidence of indebtedness of an Obligor.

            "Note  Interest  Rate" means the annual rate of interest  borne on a
Note,  which shall be adjusted  from time to time with respect to an  adjustable
rate Mortgage Loan or other Asset.

            "Obligor" means,  with respect to an Asset,  the  mortgagor/borrower
thereunder.

            "Officer's  Certificate"  means,  with  respect  to  any  Person,  a
certificate of its Responsible Officer.

            "Overadvance Period" means, with respect to each calendar month, the
last three  Business  Days of such month and the first two Business  Days of the
succeeding month.

            "Par  Amount"  means,  in  respect  of an  Asset  at any  time,  the
outstanding principal balance of such Asset at such time.

            "Payment  Date" means the first day of each  calendar  month,  or if
such day is not a Business Day, the next succeeding ------------ Business Day.

            "PBGC" means the Pension Benefit  Guaranty  Corporation  established
pursuant to subtitle A of Title IV of ERISA.

            "Periodic Payment" has the meaning specified in Section 5(b).

            "Permitted  Holders"  means lineal  descendants  of Jules  Fribourg,
including any individual legally adopted;  spouses of such descendants;  trusts,
the beneficiaries of which are any of the foregoing; partnerships, corporations,
or other entities in which any of the foregoing  (individually  or collectively)
has a controlling interest; and charitable  organizations  established by any of
the foregoing.

            "Permitted  Investment"  means an  Investment  by the  Seller or any
Subsidiary  in (i) a Subsidiary  or a Person that will,  upon the making of such
Investment, become a Subsidiary; provided, however, that the primary business of
such Subsidiary is a Related Business;  (ii) a


                                     - 16 -
<PAGE>

Strategic  Alliance  Client to the  extent  that  such  Investment  consists  of
options,  warrants or other  securities that are convertible or exchangeable for
equity  securities  of such  Strategic  Alliance  Client and is  received by the
Seller or a Subsidiary  without the payment of any consideration  other than the
concurrent provision by the Seller or such Subsidiary to such Strategic Alliance
Client of financing or asset securitization expertise on terms determined by the
Seller  to be fair  and  reasonable  to the  Seller  or such  Subsidiary  from a
financial  point of view without  taking into  consideration  any value that may
inhere in such option,  warrant or convertible or exchangeable  security;  (iii)
another Person if as a result of such  Investment such other Person is merged or
consolidated  with or into, or transfers or conveys all or substantially  all of
its assets to, the Seller or a Subsidiary; provided, however, that such Person's
primary business is a Related  Business;  (iv) Temporary Cash  Investments;  (v)
receivables  owing to the Seller or any Subsidiary if created or acquired in the
ordinary  course of business and payable or  dischargeable  in  accordance  with
customary  trade  terms;  (vi)  payroll,  travel and  similar  advances to cover
matters that are expected at the time of such advances  ultimately to be treated
as expenses for accounting  purposes and that are made in the ordinary course of
business;  (vii) loans or advances to employees  made in the ordinary  course of
business consistent with past practices of the Seller or such Subsidiary; (viii)
stock,  obligations or securities received in settlement of debts created in the
ordinary  course of  business  and owing to the Seller or any  Subsidiary  or in
satisfaction  of  judgments;  (ix) any  Person  to the  extent  such  Investment
represents  the  non-cash  portion of the  consideration  received  for an Asset
Disposition as permitted  pursuant to the  Indenture;  (x)  Receivables;  (xi) a
Strategic  Alliance  Client  to  the  extent  such  Investment  consists  of (A)
Indebtedness  of such Strategic  Alliance  Client that is secured by Receivables
owned by such Strategic Alliance Client in an aggregate  principal amount at any
time  outstanding  not to  exceed  100% of the  aggregate  market  value of such
Receivables;  provided,  however,  that  such  Receivables  are  eligible  to be
characterized under GAAP as held for sale on the balance sheet of such Strategic
Alliance Client and such  Indebtedness has not been outstanding in excess of 364
days; and (B) Indebtedness of such Strategic  Alliance Client that is secured by
Excess Spread  Receivables  owned by such Strategic  Alliance Client;  provided,
however,  that such Excess Spread  Receivables  are attributed  solely to one or
more "pools" of Receivables that were securitized in one or more transactions in
which the Seller or its  Subsidiaries  either acted as underwriters or placement
agent or provided  all or a portion of the  financing  for such "pool"  prior to
such  securitization;  and (xii) Excess Spread Receivables;  provided,  however,
that such Excess Spread Receivables  represent  interests in one or more "pools"
of Receivables  that were  securitized in one or more  transactions in which the
Seller or its Subsidiaries  acted as sponsor,  underwriter or placement agent or
provided  all or a  portion  of the  financing  for  such  "pool"  prior to such
securitization.

            "Person"  means  any  individual,  corporation,  company,  voluntary
association,  partnership, joint stock company, joint venture, limited liability
company,  trust,  unincorporated   organization  or  association,   Governmental
Authority, or any other entity of whatever nature.

            "Plan" means at a particular  time, any employee  benefit plan which
is  covered by ERISA and in  respect  of which  Seller or a Commonly  Controlled
Entity is (or, if such plan were  terminated  at such time,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.


                                     - 17 -
<PAGE>

            "Post-Default  Rate"  means,  in  respect  of any  principal  of any
Transaction  or any other  amount  under this  Agreement  or any other  Facility
Document that is not paid when due to the Buyer (whether at stated maturity,  by
acceleration,  by optional or mandatory  prepayment  or  otherwise),  a rate per
annum during the period from and  including  the due date to but  excluding  the
date on which such amount is paid in full equal to 2% per annum plus the Pricing
Rate otherwise applicable to such Transaction or other amount.

            "Preferred  Stock",  as applied to the Capital  Stock of any Person,
means  Capital  Stock of any  class or  classes  (however  designated)  which is
preferred as to the payment of dividends,  or as to the  distribution  of assets
upon any voluntary or  involuntary  liquidation  or  dissolution of such Person,
over shares of Capital Stock of any other class of such Person.

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

            "Pricing Rate" means LIBO Rate plus 200 basis points or such rate as
otherwise mutually agreed to by the parties herein.

            "Prime Rate" means the rate of interest published by The Wall Street
Journal, northeast edition, as the "prime rate".

            "Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

            "Purchase  Date"  means  the  date on  which  Purchased  Assets  are
transferred  by Seller to Buyer or its designee  (including  the  Custodian)  as
specified in the related Purchase Request.

            "Purchase Facility" means that certain Master Mortgage Loan Purchase
Facility by and between the Buyer and the Seller dated as of August 9, 1999,  as
the same may be amended, supplemented or otherwise modified from time to time.

            "Purchase  Price" means on each  Purchase  Date,  the price at which
Assets are  purchased by Buyer from Seller equal to the lesser of (a) 95% of Par
Amount, or (b) the Collateral Amount.

            "Purchase  Request"  means a written notice to the Buyer of Seller's
request for a purchase of Eligible Assets by the Buyer, in the form of Exhibit I
hereto.

            "Purchased  Assets"  means the  Assets  sold by Seller to Buyer in a
Transaction and any Substituted Assets.


                                     - 18 -
<PAGE>

            "Qualified  Insurer"  means an insurance  company duly  qualified as
such under the laws of the states in which the  Mortgaged  Property  is located,
duly authorized and licensed in such states to transact the applicable insurance
business and to write the insurance  provided and whose claims paying ability at
the time of  determination  is (i) rated not less  than A3 by  Moody's  or A- or
better by  Standard & Poor's or (ii) if such  insurance  company is not rated by
either Moody's or Standard & Poor's, rated A VII by Best's Insurance Reports.

            "Qualified Originator" means the Seller,  ContiMortgage Corporation,
ContiWest  Corporation or another  originator of Assets acceptable to the Buyer,
in its sole discretion.

            "Receivables"  means  consumer  and  commercial  loans,  leases  and
receivables purchased or originated by the Seller, any Subsidiary or a Strategic
Alliance Client in the ordinary course of business;  provided, however, that for
purposes of  determining  the amount of a  Receivable  at any time,  such amount
shall be determined in accordance  with GAAP,  consistently  applied,  as of the
most recent practicable date.

            "Regulations  T, U and X" means  Regulations T, U and X of the Board
of Governors of the Federal Reserve System (or any  successor),  as the same may
be modified and supplemented and in effect from time to time.

            "Related Business" means any consumer or commercial finance business
or any financial service business.

            "Reorganization"  means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section 4241
of ERISA.

            "Replacement Assets" has the meaning specified in Section 14(b)(ii).

            "Reportable  Event"  means any of the  events  set forth in  Section
4043(b)  of ERISA,  other  than  those  events as to which the thirty day notice
period is waived under  Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
4043.

            "Repurchase  Date" means the date on which  Seller is to  repurchase
the Purchased Assets from Buyer, including any date determined by application of
the  provisions  of  Sections  3 or 14  hereof,  or the Final  Repurchase  Date,
accelerated or otherwise, whichever date is earlier.

            "Repurchase  Price" means the price at which Purchased Assets are to
be  transferred  from Buyer or its designee  (including the Custodian) to Seller
upon termination of a Transaction,  which will be determined in each case as the
sum of (i) the  Purchase  Price,  (ii) the Exit Fee (if any) and (iii) the Price
Differential as of the date of such determination  decreased by all cash, Income
and Periodic Payments actually received by Buyer pursuant to Sections 4(a), 5(a)
and 5(b), respectively.

            "Requirement  of Law" means as to any  Person,  the  certificate  of
incorporation and by-laws or other organizational or governing documents of such
Person,  and  any  law,  treaty,  rule  or  regulation  or  determination  of an
arbitrator or a court or other Governmental  Authority,  in


                                     - 19 -
<PAGE>

each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its property is subject.

            "Responsible  Officer" means, as to any Person,  the chief executive
officer, vice president and treasurer, or with respect to financial matters, the
chief financial officer or treasurer of such Person; provided, that in the event
any such  officer is  unavailable  at any time he or she is required to take any
action hereunder,  Responsible  Officer shall mean any officer authorized to act
on  such  officer's  behalf  as  demonstrated  to the  Buyer  to its  reasonable
satisfaction.

            "Restricted  Payment"  means (i) the  declaration  or payment of any
dividends or any other distributions of any sort in respect to its Capital Stock
or similar payment to the direct or indirect holders of its Capital Stock (other
than (A) dividends or  distributions  payable solely in its Capital Stock (other
than Disqualified  Stock), (B) dividends or distributions  payable solely to the
Seller or a Subsidiary and (C) pro rata dividends or other distributions made by
a Subsidiary that is not a Wholly Owned Subsidiary to minority  shareholders (or
owners of an equivalent  interest in the case of a Subsidiary  that is an entity
other than a corporation)),  (ii) the purchase,  redemption or other acquisition
or retirement for value of any Capital Stock of the Seller held by any Person or
of any Capital Stock of a Subsidiary  held by any Affiliate of the Seller (other
than a Subsidiary), including the exercise of any option to exchange any Capital
Stock  (other than into  Capital  Stock of the Seller  that is not  Disqualified
Stock),  (iii)  the  purchase,   repurchase,   redemption  defeasance  or  other
acquisition  or retirement  for value,  prior to scheduled  maturity,  scheduled
repayment or scheduled  sinking fund payment of any Subordinated  Obligations in
respect to such series (other than the purchase, repurchase or other acquisition
of such  Subordinated  Obligations  purchased in  anticipation  of  satisfying a
sinking fund obligation,  principal  installment or final maturity, in each case
due within one year of the date of acquisition).

            "Second  Lien  Mortgage  Loan" means a Mortgage  Loan secured by the
lien on the Mortgaged Property, subject to only one prior lien on such Mortgaged
Property.

            "Section  32  Mortgage  Loan"  means a  Mortgage  Loan  secured by a
Mortgage on a one- to four-family  residence which is subject to HOEPA and which
shall bear either  fixed or  adjustable  rates of  interest  and shall have been
underwrittent in accordance with the Underwriting Guidelines.

            "Securities" means the Securities issued under the Indenture.

            "Security Agreement" means the Pledge and Security Agreement,  dated
the date of this  Agreement,  made by  Seller  in favor of  Buyer,  as  amended,
supplemented or otherwise modified from time to time.

            "Seller" means ContiFinancial Corporation.

            "Seller/Affiliate  Agreement"  shall have the meaning  specified  in
Section 25.


                                     - 20 -
<PAGE>

            "Servicer"  means (i)  Seller,  provided  that a Monoline  Insurance
Company and its related  rating  agencies  commit in writing to permit Seller to
act as Servicer in a securitization of Assets without unreasonable restrictions,
conditions  or  credit  enhancement  levels,  as  determined  by  Buyer  in  its
reasonable  discretion,  or (ii) if no such  commitment  is  obtained  or Seller
declines to undertake such function, any servicer expressly approved by Buyer in
writing in its sole discretion.

            "Servicing Agreement" has the meaning specified in Section 25.

            "Servicing Records" has the meaning specified in Section 25.

            "Significant  Subsidiary"  means  any  Subsidiary  that  would  be a
"Significant  Subsidiary"  of the Seller  within the  meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.

            "Single  Employer  Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.

            "Stated  Maturity"  means,  with respect to any  security,  the date
specified in such  security as the fixed date  specified in such security as the
fixed date on which the final  payment of principal of such  security is due and
payable, including pursuant to any mandatory redemption provision (but excluding
any provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency unless such contingency has
occurred).

            "Standard  & Poor's"  means  Standard & Poor's  Rating  Services,  a
division of the McGraw Hill Companies, Inc.

            "Strategic   Alliance   Client"  means  any  Person  (other  than  a
Subsidiary)  engaged  in a Related  Business  to which the Seller  provides,  or
reasonably expects to provide,  financing or asset  securitization  expertise in
return for asset-backed underwriting or placement agent commitments.

            "Subordinated  Obligation"  means  any  Indebtedness  of the  Seller
(whether  outstanding  on the  date  hereof  or  thereafter  incurred)  which is
subordinate  or junior  in right of  payment  to the  Securities  pursuant  to a
written agreement to that effect.

            "Subservicer"  means  ContiMortgage  Corporation or any  subservicer
expressly approved by Buyer in writing in its sole discretion.

            "Subservicing  Notification  Letter"  has the meaning  specified  in
Section 25.

            "Subsidiary"  means, with respect to any Person, any other Person of
which at least a majority of the securities or other ownership  interests having
by the terms thereof  ordinary  voting power to elect a majority of the board of
directors or other Persons  performing  similar  functions of such  corporation,
partnership  or  other  entity  (irrespective  of  whether  or not  at the


                                     - 21 -
<PAGE>

time  securities or other  ownership  interests of any other class or classes of
such  corporation,  partnership  or other entity shall have or might have voting
power by reason of the happening of any  contingency) is at the time directly or
indirectly  owned or  controlled by such Person or one or more  Subsidiaries  of
such Person or by such Person and one or more Subsidiaries of such Person.

            "Substituted  Asset" means (i) with  respect to any Eligible  Asset,
another  Eligible  Asset,  and (ii) with respect to any Fallout  Asset,  another
Fallout Asset or an Eligible  Asset,  in each case  substituted  for a Purchased
Asset in accordance with Section 9 hereof.

            "Takeout  Commitment" means an agreement by an investor or financial
institution to purchase Purchased Assets on a forward delivery basis.

            "Takeout Investor" means the investor or financial institution which
agrees to purchase Purchased Assets pursuant to a Takeout Commitment.

            "Temporary  Cash  Investments"  means any of the following:  (i) any
investment in direct  obligations  of the United States of America or any agency
thereof or obligations  guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts,  certificates of deposit and
money  market  deposits  maturing  within  180 days of the  date of  acquisition
thereof issued by a bank or trust company that is not an Affiliate of the Seller
and which is organized under the laws of the United States of America, any state
thereof or any foreign country  recognized by the United States,  and which bank
or trust  company has capital,  surplus and  undivided  profits  aggregating  in
excess of  $50,000,000  (or the foreign  currency  equivalent  thereof)  and has
outstanding debt which is rate "A" (or such similar equivalent rating) or higher
by at least  one  nationally  recognized  statistical  rating  organization  (as
defined in Rule 436 under the Securities  and Exchange Act) or any  money-market
fund sponsored by a registered broker dealer or mutual fund  distributor,  (iii)
repurchase  obligations  with a term of not  more  than 30 days  for  underlying
securities  of the types  described in clause (i) above entered into with a bank
meeting the  qualifications  described in clause (ii) above, (iv) investments in
commercial paper,  maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Seller) organized and in
existence  under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of which
any  investment  therein  is made of "P-1"  (or  higher)  according  to  Moody's
Investors Service, Inc. or "A-1" (or higher)

            "Transaction" has the meaning specified in Section 1 hereof.

            "Trust  Receipt"  shall  have the  meaning  assigned  thereto in the
Custodial Agreement.

            "Underlying   Mortgage   Loans"   means,   with   respect   to  each
Collateralized  Note,  the Mortgage  Loans  securing  such Note which qualify as
Eligible  Assets,  and (i) which,  in the case of a Mortgage  Loan  securing  an
Empire  Collateralized Note, (A) has a FICO score of at least (x) 660 if the LTV
of such  Mortgage  Loan is 100% or  greater  or (y) 620 if its LTV is less  than
100%, (B) the weighted average FICO score of all such Mortgage Loans is at least
685 and


                                     - 22 -
<PAGE>

(C) is not Delinquent,  and (ii) which, in the case of Mortgage Loans securing a
Collateralized Note other than an Empire  Collateralized  Note, (A) no more than
$15,000,000  of such Mortgage  Loans shall be from 45 to 60 days  Delinquent and
(B) no more than  $3,000,000 of such Mortgage  Loans shall be from 60 to 90 days
Delinquent.

            "Underwriting Guidelines" means the underwriting guidelines attached
as Exhibit IX hereto,  as modified by the Underwriting  Guideline  modifications
attached as Exhibit IX(A) hereto, or such other guidelines  mutually agreed upon
by Seller and Buyer.

            "Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
as in effect on the date  hereof in the State of New York;  provided  that if by
reason  of  mandatory  provisions  of  law,  the  perfection  or the  effect  of
perfection  or  non-perfection  of the security  interest in any  Collateral  is
governed by the Uniform  Commercial  Code as in effect in a  jurisdiction  other
than  New  York,  "Uniform  Commercial  Code" or "UCC"  shall  mean the  Uniform
Commercial  Code as in effect in such other  jurisdiction  for  purposes  of the
provisions  hereof  relating  to such  perfection  or  effect of  perfection  or
non-perfection.

            "Voting  Stock" of a Person  means all  classes of Capital  Stock or
other interests  (including  partnership  interests or membership  interests) of
such  Person then  outstanding  and  normally  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.

            "Warehouse  Indebtedness"  means,  as to any Person,  such  Person's
obligations under repurchase agreements or other similar arrangements.

            "Wholly Owned  Subsidiary"  means a Subsidiary all the Capital Stock
of which  (other  than  directors'  qualifying  shares and shares  held by other
Persons to the extent such shares are required by applicable law to be held by a
Person other than the Seller or a  Subsidiary)  is owned by the Seller or one or
more Wholly Owned Subsidiaries.

            "Year 2000  Program"  shall  have the  meaning  provided  thereto in
Section 10(b)(xxiv).

3.   CONDITIONS PRECEDENT; INITIATION; PURCHASE REQUEST; TERMINATION; COMMITMENT
     FEE; MAXIMUM TRANSACTION AMOUNT

            (a) Conditions Precedent to Initial Transaction.  Buyer's obligation
to enter into the initial Transaction  hereunder is subject to the satisfaction,
immediately  prior to or concurrent  with such  Transaction,  of the  conditions
precedent  that Buyer shall have  received the  Commitment  Fee,  which shall be
non-refundable,  and any other fees and  expenses due from Seller and all of the
following  documents,  each of which  shall  be  satisfactory  to Buyer  and its
counsel in form and substance (collectively, the "Facility Documents"):

                  (i) Agreement.  This Agreement,  duly completed,  and executed
      and delivered by Seller and the Interim Servicer;


                                     - 23 -
<PAGE>

                  (ii)  Custodial  Agreement.  The  Custodial  Agreement,   duly
      executed and delivered by Seller and the Custodian;

                  (iii)  Security  Agreement.   The  Security  Agreement,   duly
      executed and delivered by Seller;

                  (iv) [Intentionally Omitted]

                  (v) Uniform Commercial Code Filings and Searches.  Any filings
      requested by Buyer or required  under the Uniform  Commercial  Code,  duly
      completed, executed and delivered by Seller, and such evidence as required
      by Buyer that all other  actions have been taken that are necessary or, in
      the sole  discretion  of the Buyer,  desirable  to perfect and protect the
      security  interests  and Liens  created  pursuant to this  Agreement;  and
      delivery of UCC searches;

                  (vi) Opinions of Seller's  Counsel.  An opinion or opinions of
      counsel to the Seller and the Interim Servicer, addressing the matters set
      forth in the form  attached  hereto as  Exhibit  VIII,  dated the  initial
      Purchase Date and otherwise in form and substance  acceptable to the Buyer
      and covering such other matters incident to the transactions  contemplated
      by this Agreement as the Buyer may reasonably request;

                  (vii)  Subservicing   Notification  Letter.  The  Subservicing
      Notification Letter;

                  (viii) Organizational  Documents.  The Seller shall deliver to
      Buyer a certificate of good standing and a certificate of its Secretary or
      Assistant   Secretary   certifying:   (A)  a  copy  of  its   articles  of
      incorporation,  (B) a copy of its by-laws; (C) the names and signatures of
      the  officers  authorized  on its behalf to  execute,  deliver and perform
      under the Facility Documents, as applicable, and any other documents to be
      delivered by it from time to time in  connection  therewith  (on which the
      Buyer may  conclusively  rely until such time as the Buyer  shall  receive
      from the Seller a duly authorized revised certificate);  and (D) a copy of
      the  resolutions  of the Board of  Directors  of the  Seller,  authorizing
      Seller to  execute,  perform,  and  deliver  the  Facility  Documents,  as
      applicable;

                  (ix)  Officer's  Certificate.   An  Officer's  Certificate  of
      Seller, regarding representations and warranties;

                  (x)  Power of  Attorney.  A fully  executed  omnibus  power of
      attorney,  substantially  in the  form of  Exhibit  III  attached  hereto,
      irrevocably  appointing  Buyer its  attorney-in-fact  with  full  power to
      complete  and record the  assignment  of  Purchased  Assets,  complete the
      endorsement of the related Note or instrument and take such other steps as
      may be  necessary  or desirable  to enforce  Buyer's  rights  against such
      Purchased  Assets  and  the  related  Trust  Receipts,  Asset  Files,  and
      Servicing  Records upon three (3) Business  Days' written notice to Seller
      and if Seller fails to act in a manner acceptable to


                                     - 24 -
<PAGE>

      Buyer,  then Buyer may so act, provided that such notice need not be given
      if an Event of Default has occurred;

                  (xi)  Income  Payment  Letters.   Fully  executed  irrevocable
      letters  of  instructions  to  Subservicer,  substantially  in the form of
      Exhibit  IV  attached  hereto,  directing  such  Subservicer  to make  all
      payments of Income directly to Buyer;

                  (xii) True Sale  Opinion.  With  respect to any Asset that was
      funded in the name of or acquired by a  Qualified  Originator  which is an
      Affiliate of the Seller,  the Buyer may, in its sole  discretion,  require
      the Seller to provide  evidence  sufficient to satisfy the Buyer that such
      Asset was  acquired  in a legal sale,  including  without  limitation,  an
      opinion of counsel with respect thereto, in form and substance and from an
      attorney,  in both cases,  acceptable to the Buyer in its sole discretion,
      UCC   financing   statements,    Acquisition    Agreements,    Affiliates'
      organizational documents, etc.;

                  (xiii) Year 2000 Diligence.  Satisfactory results of Year 2000
      Program diligence;

                  (xiv)  Insurance  Policies.   Insurance  policies,   or  other
      evidence of insurance acceptable to Buyer;

                  (xv) Related Documents.  The Purchase Facility, the Engagement
      Letter and the Master Facilities Agreement,  duly completed,  and executed
      and delivered by Seller and each applicable Affiliate thereof;

                  (xvi)  Other  Documents.  Such  other  documents  as Buyer may
      reasonably request, in form and substance reasonably acceptable to Buyer.

            (b) Conditions Precedent to all Transactions.  Buyer's obligation to
enter into each  Transaction  (including the initial  Transaction) is subject to
the satisfaction of the following further conditions precedent, both immediately
prior to entering into such  Transaction and also after giving effect thereto to
the intended use thereof:

                  (i) Seller  shall  have  delivered  to Buyer or its  designee,
      documents  evidencing  the transfer of the ownership of the related Assets
      from  Seller to Buyer,  including  delivery  to  Custodian  of the  Assets
      File(s) and deliver of a duly executed  bond power or transfer  instrument
      for the related Asset;

                  (ii) Seller shall have  instructed the  applicable  Custodian,
      debtor,  trustee,  paying agent,  authenticating  agent,  transfer  agent,
      registrar,  predecessor  in  interest,  owner,  and  Servicer,  if any, in
      respect of the  related  Assets to: (A) reflect on their books and records
      the  transfer of such Assets to Buyer,  as owner or secured  party (if the
      Assets are in the form of a security  agreement),  and (B)  re-register in
      the  name of  Buyer  all  Trust  Receipts,  collateral  receipts  or other
      applicable instruments relating to each Purchased Asset on or prior to the
      related Purchase Date;


                                     - 25 -
<PAGE>

                  (iii)  Custodian  shall  have  delivered  to Buyer  all  Trust
      Receipt(s)  relating to the Purchased Assets, and an Asset Schedule noting
      such  Exceptions  as are  acceptable  to Buyer in its sole  discretion  in
      respect of Assets to be sold  hereunder on such Business Day, in each case
      dated such Business Day and duly completed;

                  (iv) Seller shall have delivered a Purchase  Request to Buyer,
      at least  two (2)  Business  Days  prior  to the  proposed  Purchase  Date
      specified in such Purchase Request;

                  (v) Seller shall have  delivered to Buyer,  no later than 2:00
      p.m.  New York time at least one (1)  Business  Day prior to the  Purchase
      Date, the Asset Schedule,  and an Asset Tape with respect to each Asset to
      be purchased on such Purchase  Date and the Custodian  shall have received
      the Asset Schedule no later than 12:00 noon New York time one (1) Business
      Day prior to such Purchase Date;

                  (vi) In the  event  Buyer has  provided  Seller  with  written
      notice at least two (2) Business Days prior to its receipt of any Purchase
      Request of its intent to conduct  pre-funding  due diligence  prior to any
      Purchase  Date,  Buyer  shall  have  completed  its due  diligence  to its
      satisfaction  with  respect to each Asset to be  purchased on the relevant
      Purchase Date, and the results of such  investigation (and all other legal
      and documentary  matters with respect to such Asset) supports the Mortgage
      Loan  Representations  and  shall  be  satisfactory  to  Buyer in its sole
      discretion in accordance with Section 15 hereof.

                  (vii) No Event of Default or Default  shall have  occurred and
      be continuing,  and there shall not have occurred one or more events that,
      in the reasonable  judgment of the Buyer,  constitutes or could reasonably
      be expected to constitute a Material Adverse Effect;

                  (viii)  Seller  shall have  provided  Buyer with a copy of any
      changes to Seller's  Underwriting  Guidelines prior to Buyer's purchase of
      any Asset  affected  by such  change and Buyer  shall have  approved  such
      changes;

                  (ix)  Buyer  shall have  received  the most  recent  available
      servicing or like reports, if any, with respect to the Assets; and

                  (x) If  requested  by Buyer due to a  question  arising  as to
      validity, enforceability or compliance with law, an opinion or opinions of
      counsel to the Seller and the Interim Servicer, addressing the matters set
      forth in the form attached hereto as Exhibit VIII, then Seller shall, upon
      the  request  of Buyer,  deliver  an  opinion  of  counsel  in such  state
      acceptable to the Buyer,  substantially in the form of items number 11, 13
      and 14 of Exhibit VIII.

                  (xi) With respect to any Collateralized  Note, the Buyer shall
      have received (1) the original  Collateralized Note endorsed to the Buyer,
      (2) the original  certification and trust receipt issued by the applicable
      Custodian with respect to the Mortgage Loans securing such  Collateralized
      Note,  (3) a "notice of pledge"  executed by


                                     - 26 -
<PAGE>

      the Seller and the  applicable  Custodian,  and (4) a "notice and consent"
      executed by the maker and each endorsee of the Collateralized Note.

                  (xii)  All  terms  and  conditions  set  forth  in the  Master
      Facilities Agreement shall be satisfied to the reasonable  satisfaction of
      the Buyer.

            (c) Initiation; Purchase Request.

                  (i)  An  agreement  to  enter  into  a  Transaction  shall  be
      initiated  by Seller's  delivery  of an  irrevocable  Purchase  Request to
      Buyer;  provided,  however,  that Buyer shall have no  obligation to enter
      into any  Transaction  hereunder,  except as provided in subsection (g) of
      this Section 3. Seller shall deliver to Buyer a Purchase  Request at least
      two  (2)  Business  Days  prior  to the  proposed  Purchase  Date  for any
      Transaction  (unless  otherwise  agreed  by the  parties).  Such  Purchase
      Request shall (A) specify the requested  Purchase Date and Repurchase Date
      and the other matters  specified on the form attached hereto as Exhibit I,
      and (B) include the Asset Schedule containing  information with respect to
      Assets that the Seller  proposes to sell to Buyer in connection  with such
      Transaction.  Each Purchase Request accepted by Buyer shall be irrevocable
      and  binding on Buyer and  Seller.  The Seller  shall not be  entitled  to
      initiate a Transaction hereunder and the Buyer shall have no obligation to
      purchase  any Assets  hereunder  if a Default  or an Event of Default  has
      occurred or will result from such Transaction.

                  (ii) Notwithstanding  anything set forth in Section 17 hereof,
      any Purchase  Request  shall be deemed to have been received by Buyer upon
      telephonic  confirmation  by Seller that Buyer has actually  received such
      Purchase Request.

            (d) Limitation on Pricing Rate Used; Illegality.  Anything herein to
the  contrary  notwithstanding,  if,  on or  prior to the  determination  of the
Pricing Rate:

                  (i)  the  Buyer  determines,   which  determination  shall  be
      conclusive,  that  quotations of interest rates for the relevant  deposits
      referred to in the  definition of "LIBO Base Rate" in Section 2 hereof are
      not being provided in the relevant amounts or for the relevant  maturities
      for purposes of determining the Pricing Rates as provided herein; or

                  (ii)  the  Buyer  determines,  which  determination  shall  be
      conclusive,  that  the  relevant  rate  of  interest  referred  to in  the
      definition  of "Pricing  Rate" in Section 2 hereof upon the basis of which
      the Pricing Rate is to be determined is not likely adequately to cover the
      cost to the Buyer of purchasing the Assets using such Pricing Rate; or

                  (iii)  it  becomes   unlawful  for  the  Buyer  to  honor  its
      obligation to purchase  Assets  hereunder  using a Pricing Rate based upon
      the LIBO Rate;

then Buyer  shall give the Seller  prompt  notice  thereof  and, so long as such
condition  remains in effect,  Seller  shall,  either  repurchase  all Purchased
Assets then subject to a  Transaction  or the


                                     - 27 -
<PAGE>

Pricing  Rate shall be  determined  based upon the rate  selected  by Buyer in a
manner that is reasonably  satisfactory to Buyer so as to adequately reflect the
cost to Buyer of purchasing the Purchased Assets using such substituted  Pricing
Rate (in  which  case  Buyer  shall  continue  to be  obligated  to  enter  into
additional Transactions using that substituted Pricing Rate).

            (e) Additional Costs.

                  (i) If Buyer determines that additional  amounts are necessary
      to compensate  Buyer for any costs that Buyer  determines are attributable
      to its using a LIBO Rate for the Pricing Rate or its  obligation  to use a
      the LIBO Rate  Pricing  Rate  hereunder,  or any  reduction  in any amount
      receivable  by Buyer  hereunder  in  respect  of the  Pricing  Rate  (such
      increases  in costs and  reductions  in amounts  receivable  being  herein
      called "Additional Costs"), resulting from any change that:

                        (A) shall subject Buyer to any tax, duty or other charge
            in respect of such  Pricing Rate or changes the basis of taxation of
            any amounts payable to such Buyer under this Agreement in respect of
            any of such  Pricing Rate  (excluding  changes in the rate of tax on
            the  overall net income of such Buyer by the  jurisdiction  in which
            Buyer has its principal office); or

                        (B) imposes or modifies any reserve,  special deposit or
            similar requirements relating to any Pricing Rate; or

                        (C) imposes any other condition affecting this Agreement
            materially   and   adversely   affecting   Buyer's   rights  or  the
            transactions  contemplated hereby or thereby,  then Buyer shall give
            prompt  notice  thereof  and  Seller  shall  either  repurchase  all
            Purchased  Assets  subject to a Transaction  or pay such  Additional
            Costs.

                  (ii) If any Requirement of Law (other than with respect to any
      amendment made to the Buyer's  certificate of incorporation and by-laws or
      other  organizational  or  governing  documents)  or  any  change  in  the
      interpretation or application  thereof or compliance by the Buyer with any
      request  or  directive  (whether  or not having the force of law) from any
      central bank or other  Governmental  Authority made subsequent to the date
      hereof:

                        (A)  shall  subject  the  Buyer  to any tax of any  kind
            whatsoever  with respect to this Agreement or any  Transaction  made
            hereunder  (excluding  net  income  taxes)  or  change  the basis of
            taxation of payments to the Buyer in respect thereof;

                        (B) shall impose, modify or hold applicable any reserve,
            special deposit,  compulsory advance or similar  requirement against
            assets held by, deposits or other  liabilities in or for the account
            of,  advances  or  other  extensions  of  credit  by,  or any  other
            acquisition  of funds  by,  any  office of the  Seller  which is not
            otherwise  included  in the  determination  of the  LIBO  Base  Rate
            hereunder, and which is deemed applicable to Transactions;

                        (C) shall impose on the Buyer any other condition;


                                     - 28 -
<PAGE>

      and the  result of any of the  foregoing  is to  increase  the cost to the
      Buyer,  by an amount  which the Buyer  deems to be  material,  of  making,
      continuing  or  maintaining  any  Transaction  or  to  reduce  any  amount
      receivable  hereunder in respect  thereof,  then, in any such case,  Buyer
      shall give prompt  notice  thereof and the Seller shall either  repurchase
      all Purchased Assets subject to a Transaction or pay such Additional Costs
      promptly,  as will compensate the Buyer for such increased cost or reduced
      amount receivable.

                  (iii) If the Buyer shall have  determined that the adoption of
      or any change in any  Requirement  of Law (other than with  respect to any
      amendment made to the Buyer's  certificate of incorporation and by-laws or
      other organizational or governing documents) regarding capital adequacy or
      in the interpretation or application thereof or compliance by the Buyer or
      any  corporation  controlling  the Buyer  with any  request  or  directive
      regarding  capital adequacy  (whether or not having the force of law) from
      any  Governmental  Authority made subsequent to the date hereof shall have
      the  effect  of  reducing  the  rate  of  return  on the  Buyer's  or such
      corporation's  capital as a consequence of its obligations  hereunder to a
      level  below  that  which  the  Buyer  or such  corporation  (taking  into
      consideration the Buyer's or such  corporation's  policies with respect to
      capital  adequacy) by an amount  deemed by the Buyer to be material,  then
      from time to time,  Buyer shall give prompt notice  thereof and the Seller
      shall either  repurchase all Purchased  Assets subject to a Transaction or
      promptly pay such  Additional  Costs as will compensate the Buyer for such
      reduction.

                  (iv) If the Buyer  becomes  entitled  to claim any  additional
      amounts pursuant to this  subsection,  it shall promptly notify the Seller
      of the event by reason of which it has  become so  entitled.  Buyer  shall
      deliver  to  Seller a  statement  setting  forth the  amount  and basis of
      determination of any Additional Costs in such detail as determined in good
      faith by Buyer to be adequate, it being agreed that such statement and the
      method of its  calculation  shall be adequate and shall be conclusive  and
      binding upon Seller, absent manifest error.

                  (v)  Notwithstanding  anything in this  subsection  (e) to the
      contrary,  to the extent any notice or request pursuant to this subsection
      (e) is given by Buyer more than five (5)  Business  Days  after  Buyer has
      obtained or should have obtained  knowledge of the  occurrence of an event
      giving rise to Additional Costs as described hereunder, Buyer shall not be
      entitled to  compensation  under this  subsection  (e) for any  Additional
      Costs incurred or accruing prior to the giving of such notice to Seller.

                  (vi)  Buyer  will,  to  the  extent  of  Additional  Costs  or
      reductions in the amounts  receivable  referred to above relate to Buyer's
      loans or commitments in general and are not  specifically  attributable to
      amounts owing hereunder, use averaging and attribution methods which cover
      all loans and commitments similar to the Transactions hereunder in similar
      circumstances  for comparable  customers  whether or not the documentation
      for  such  other  loans  or   commitments   permits   Buyer  to  make  the
      determination specified in this clause (vi).

            (f) Termination and Repurchase.

                  (i) On the Repurchase  Date,  termination  of the  Transaction
      will be effected by  transfer to Seller or its  designee of the  Purchased
      Assets (and any Income in


                                     - 29 -
<PAGE>

      respect thereof  received by Buyer not previously  credited or transferred
      to, or  applied  to the  obligations  of,  Seller  pursuant  to Section 5)
      against  the  simultaneous  transfer  of the  Repurchase  Price  plus  any
      Breakage Costs,  as defined below,  payable by Seller to Buyer pursuant to
      paragraph 3(f)(iii) hereof, to an account of Buyer. Seller is obligated to
      obtain the Asset Files from Buyer or its  designee at Seller's  expense on
      the Repurchase Date.

                  (ii)  Seller may at any time and from time to time  repurchase
      the Purchased  Assets on other than a scheduled  Repurchase Date, in whole
      or in part,  upon at least one (1) Business  Day's  irrevocable  notice to
      Buyer,  specifying  the new  Repurchase  Date for such  repurchase and the
      Repurchase  Price.  Such demand  shall be made by Seller by  telephone  or
      otherwise,  no later  than 1:00 p.m.  New York  time on the  Business  Day
      immediately  prior to the day on which such termination will be effective.
      If any such notice is given, the Repurchase Price specified in such notice
      shall be due and payable on the new  Repurchase  Date  specified  therein,
      together with any amounts payable pursuant to the succeeding paragraph.

                  (iii) If Seller  repurchases  the Purchased  Assets on any day
      which is not a Repurchase  Date for such  Purchased  Assets,  Seller shall
      indemnify  Buyer and hold Buyer  harmless  from any loss or expense  which
      Buyer may sustain or incur arising from the reemployment of funds obtained
      by Buyer  hereunder or from fees payable to  terminate  the deposits  from
      which  such  funds  were  obtained,  but  not  including  loss  of  profit
      ("Breakage  Costs").  Buyer shall  deliver to Seller a  statement  setting
      forth the amount and basis of  determination of any Breakage Costs in such
      detail  as  determined  in good  faith by Buyer to be  adequate,  it being
      agreed  that such  statement  and the method of its  calculation  shall be
      adequate and shall be conclusive and binding upon Seller,  absent manifest
      error.  This Section  shall  survive  termination  of this  Agreement  and
      repurchase of all Purchased Assets subject to Transactions hereunder.

                  (iv) The Seller shall  repurchase from the Buyer all Purchased
      Assets outstanding on the Final Repurchase Date.

                  (v) With respect to any  Purchased  Asset  repurchased  by the
      Seller pursuant to this Section 3(f), the Seller shall not resell any such
      Asset to any  Person for a purchase  price  less than the  purchase  price
      applicable to such Assets set forth in the Purchase Facility.

            (g) Commitment Fee; Maximum  Transaction Amount. In consideration of
the  Commitment  Fee,  Buyer shall,  for the term of this  Agreement,  commit to
purchase  Assets from Seller so long as (i) the Purchase  Price for Assets to be
purchased on any single  Purchase  Date shall be at least  $5,000,000,  (ii) the
aggregate Purchase Price for Purchased Assets subject to Transactions at any one
time does not exceed the Committed  Amount;  (iii) the aggregate  Purchase Price
for Fallout Assets subject to  Transactions  at any one time does not exceed the
Fallout  Asset   Sublimit;   (iv)  the  aggregate   Purchase  Price  for  Empire
Collateralized  Notes and all other Collateralized Notes subject to Transactions
at any one time does not exceed the applicable


                                     - 30 -
<PAGE>

Collateralized Note Sublimit; (v) the Assets comply with the representations and
warranties set forth herein,  or in the case of each Fallout  Asset,  the Seller
identifies on the  applicable  Asset Schedule each  representation  and warranty
that such Asset does not satisfy; and (vi) the conditions precedent set forth in
3(b) are satisfied. Buyer shall have no obligation to enter into any Transaction
if, as a result of such  transaction,  (i) the aggregate  Purchase Price for all
Transactions subject to then outstanding Transactions under this Agreement shall
exceed the Committed Amount or (ii) the Maximum  Transaction Amount shall exceed
$650,000,000.  Buyer  shall  not enter  into any  Transaction  if the  aggregate
Purchase Price of such Purchased Assets exceeds the Available Amount.

4. COLLATERAL AMOUNT MAINTENANCE

            (a) If at any  time the  aggregate  Repurchase  Price  of  Purchased
Assets subject to then  outstanding  Transactions is greater than the Collateral
Amount for such Transaction (a "Collateral  Deficit"),  then Buyer may by notice
to Seller,  require  Seller to transfer to Buyer or its designee  (including the
Custodian) (at Buyer's option) additional Eligible Assets, ("Additional Eligible
Assets"),  or  cash,  so that  the  Collateral  Amount  equals  or  exceeds  the
Repurchase  Price. Any cash remitted by Seller to Buyer pursuant to this Section
4(a) shall be deemed a payment of all or part of the Repurchase Price.

            (b) Notice required pursuant to subsection (a) above may be given by
means of facsimile transmission. A notice for the payment or delivery in respect
of a Collateral  Deficit  received before 12:00 noon New York time on a Business
Day must be met not later than 4:00 p.m. New York time on the next  Business Day
on which the notice was given.  Any notice  given on a Business  Day after 12:00
noon New York time  shall be met not later  than 4:00 p.m.  New York time on the
second  Business Day following such notice.  The failure of Buyer, on any one or
more  occasions,  to exercise  its rights under  subsection  (a) of this Section
shall not change or alter the terms and  conditions  to which  Seller is subject
under this Agreement or limit the right of the Buyer to exercise its rights at a
later date.  Buyer  agrees that a failure or delay to exercise  its rights under
subsection  (a) of this Section shall not limit its rights under this  Agreement
or otherwise existing by law or in any way create additional rights for Seller.

            (c) In the event that Seller fails to comply with the  provisions of
this  Section  4,  Buyer  shall  have the  option  not to enter  any  additional
Transactions  hereunder  from the date of such  failure,  and to terminate  this
Agreement.

5. INCOME PAYMENTS

            (a) Where a  particular  Transaction's  term  extends over an Income
payment date for Purchased Assets subject to a Transaction, such Income shall be
the property of Buyer.  All Income  attributable to the Purchased Assets subject
to  Transactions  which is  collected  and received by the Seller or the Interim
Servicer,  as the case may be,  shall be  remitted  by the Seller or the Interim
Servicer, as the case may be, within two Business Days of such receipt, directly
to the Buyer's  Account in  accordance  with the Accepted  Servicing  Practices,
until and unless Buyer directs Seller or Interim  Servicer,  as the case may be,
that such  Income  should be  remitted as directed by Buyer for and on behalf of
Buyer or to remit such Income directly to Seller.


                                     - 31 -
<PAGE>

            (b)   Notwithstanding   that  Buyer  and  Seller   intend  that  the
Transactions  hereunder be sales to Buyer of the Purchased Assets,  Seller shall
pay by wire transfer to Buyer the accreted value of the Price Differential (less
any amount of such Price Differential  previously paid by Seller to Buyer) (each
such payment, a "Periodic Payment") on the first Business Day of each month (the
"Payment Date").

6. SECURITY INTEREST

            (a) Buyer and Seller intend that the Transactions hereunder be sales
to Buyer of the Purchased  Assets and not loans from Buyer to Seller  secured by
the Purchased  Assets.  However,  in order to preserve Buyer's rights under this
Agreement  in  the  event  that a  court  or  other  forum  recharacterizes  the
Transactions hereunder as loans and as security for the performance by Seller of
all of Seller's  obligations to Buyer under this Agreement and the  Transactions
entered into pursuant to this  Agreement,  Seller  grants  Buyer,  as collateral
security for any obligations  outstanding under this Agreement,  any outstanding
Transactions,  any asset  backed  warehouse  financing  agreements  or any other
repurchase agreements between Buyer or any of its Affiliates on the one hand and
Seller or any of its  Affiliates  on the other hand, a first  priority  security
interest in the Purchased Assets and all  distributions in respect thereof,  the
proceeds of any and all of the  foregoing,  Servicing  Agreements  and any other
arrangement  for the servicing of the Purchased  Assets  (including the right to
contract  for  servicing),   Servicing  Records,   servicing  fees,   insurance,
guarantees,  indemnities  and warranties and proceeds  thereof,  relating to the
Purchased Assets,  Income,  collections,  custodial accounts and escrow accounts
relating to the Purchased  Assets and any other contract  rights  (including the
right to receive principal and interest payments or finance charges with respect
to the  Purchased  Assets  and the  right  to  enforce  such  payments,  and the
collateral  securing such obligation),  the Asset Documents and other agreements
or  arrangements  of whatever  character  from time  relating  to the  Purchased
Assets,   security  agreements,   financing  statements,   general  intangibles,
investment property,  inventory,  instruments,  chattel paper, equipment, goods,
accounts and other assets,  whether real or personal  property,  relating to the
Purchased  Assets or any interest in the Purchased  Assets  (including,  without
limitation,  the Collateralized Notes and the indebtedness evidenced thereby and
all collateral  security therefor including,  without  limitation,  all security
agreements,  mortgage loans, deeds of trusts and all other assets and properties
securing such  Collateralized  Notes),  securities  backed by or representing an
interest in such Purchased  Assets,  Takeout  Commitments  and all collateral of
Seller,  however  defined,  held  from  time to time by  Buyer,  and any and all
replacements, substitutions,  distributions on or proceeds of any and all of the
foregoing (collectively, the "Collateral").  Seller represents that with respect
to all  Purchased  Assets in the form of a  participation  certificate  or other
instrument evidencing ownership of an underlying pool of assets there has been a
UCC-1 financing  statement filed evidencing the security interest of the issuer,
for the benefit of the holders of such  certificate or instrument,  in such pool
of assets,  including  any chattel  paper  related to such  assets.  Seller also
represents   that,  with  respect  to  all   Collateralized   Notes  subject  to
Transactions, a UCC-1 financing statement has been filed and is in effect naming
Seller  the  secured  party  with  respect  to  the  collateral   securing  such
Collateralized Notes.


                                     - 32 -
<PAGE>

            (b)  Seller  shall  pay  all  fees  and  expenses   associated  with
perfecting Buyer's security interest in the Collateral,  or establishing Buyer's
Lien on Assets,  including,  without  limitation,  the cost of filing  financing
statements  under the  Uniform  Commercial  Code and  recording  assignments  of
Mortgage, as and when required by Buyer in its sole discretion.

7. PAYMENT, TRANSFER AND CUSTODY

            (a) Unless  otherwise  mutually agreed in writing,  all transfers of
funds hereunder shall be in immediately available funds.

            (b)  In  connection  with  each  sale,   transfer,   conveyance  and
assignment,  or pledge,  on or prior to each  Purchase Date with respect to each
Purchased  Asset, the Seller shall deliver or cause to be delivered and released
to the Custodian the original documents  consisting of the Asset File pertaining
to each of the  Purchased  Assets  identified  in the Asset  Schedule  delivered
therewith.  On the Purchase  Date,  upon receipt of the Trust  Receipt and Asset
Schedule  containing  no  Material  Exceptions  (as  defined  in  the  Custodial
Agreement)  or as otherwise  acceptable to Buyer in its sole  discretion,  Buyer
shall transfer the Purchase  Price for the  Transaction to Seller to the account
specified by Seller in the Purchase Request (the "Seller's Account").

            (c) On the  Purchase  Date for each  Transaction,  ownership  of the
Purchased  Assets shall be transferred  to Buyer or its designee  (including the
Custodian)  simultaneous  with the  transfer of the  Purchase  Price to Seller's
Account.  Seller,  simultaneously  with the  delivery  to Buyer or its  designee
(including the Custodian) of the Purchased  Assets relating to each  Transaction
hereby sells, transfers, conveys and assigns to Buyer or its designee (including
the  Custodian),  all the  right,  title  and  interest  of Seller in and to the
Purchased  Assets  together  with all right,  title and  interest  in and to the
proceeds of any  related  insurance  policies.  Upon  transfer of the  Purchased
Assets to Buyer as set forth-herein and until termination of any Transactions as
set  forth  in this  Agreement,  record  title  in the  name of  Seller  to each
Purchased Asset shall be retained by Seller in trust,  for the benefit of Buyer,
for the sole purpose of  facilitating  the servicing and the  supervision of the
servicing  of the  Purchased  Assets by Seller in  accordance  with  Section  25
hereof.

            (d) Buyer may deposit the Trust Receipts  representing the Purchased
Assets, or direct that the Trust Receipts be deposited directly, with a designee
acting in the capacity of bailee for Buyer.  If the Trust Receipts are delivered
to Buyer or its designee,  Buyer or its designee shall  exercise  reasonable and
prudent care in the maintenance thereof, during the term of this Agreement.

            (e)  Any  Asset  Files  not  delivered  to  Buyer  or  its  designee
(including  the  Custodian)  are and  shall be held in trust  by  Seller  or its
designee for the benefit of Buyer as the owner  thereof.  Seller or its designee
shall  maintain a complete copy of the Asset File and any originals of the Asset
Documents not delivered to Buyer or its  designee.  The  possession of the Asset
File by Seller or its  designee is at the will of the Buyer for the sole purpose
of servicing the related  Purchased  Asset, and such retention and possession by
the Seller or its  designee is in a  custodial  capacity  only.  Each Asset File
retained or held by Seller or its designee shall be


                                     - 33 -
<PAGE>

segregated on Seller's  books and records from the other assets of Seller or its
designee and the books and records (including,  without limitation, any computer
records or tapes) of Seller or its designee and shall be marked appropriately to
reflect clearly the sale of the related Purchased Asset to Buyer.  Seller or its
designee  (including the Custodian)  shall release its custody of the Asset File
only in accordance with written  instructions  from Buyer and in accordance with
the  Custodial  Agreement,  unless such release is required as incidental to the
servicing of the Purchased  Assets or is in connection  with a repurchase of any
Purchased Assets by Seller.

8. HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

            Title to all  Purchased  Assets  shall pass to Buyer and Buyer shall
have  free  and  unrestricted  use of all  Purchased  Assets.  Nothing  in  this
Agreement shall preclude Buyer from engaging in repurchase transactions with the
Purchased  Assets  or  otherwise   pledging,   repledging,   hypothecating,   or
rehypothecating  the Purchased  Assets,  but no such  transaction  shall relieve
Buyer of its  obligations  to transfer  Purchased  Assets to Seller  pursuant to
Section 3. Nothing contained in this Agreement shall obligate Buyer to segregate
any Purchased Assets delivered to Buyer by Seller.

9. SUBSTITUTION

            (a) Subject to Section 9(b), Seller may, upon one (1) Business Day's
written notice to Buyer, with a copy to Custodian, substitute (i) other Eligible
Assets for any Eligible Assets or Fallout Assets subject to Transactions or (ii)
other  Fallout  Assets for any  Fallout  Assets  subject to  Transactions.  Such
substitution shall be made by (i) transfer to the related Custodian of the Asset
Files for such  other  Eligible  Assets,  together  with an Asset  Schedule  and
transfer  to  Seller or its  designee  of the  Purchased  Assets  requested  for
release, and (ii) wire transfer to Buyer of the Exit Fee related to the released
Assets to the extent such  Assets are sold by the Seller to a Person  other than
the Buyer on or after the substitution date. After substitution, the Substituted
Assets,  shall be deemed to be Purchased  Assets subject to the same Transaction
as the released Asset.  The Custodian shall issue a new Asset Schedule to Buyer,
deleting the released Asset, and adding the substituted Purchased Asset.

            (b)  Notwithstanding  anything to the  contrary  in this  Agreement,
Seller may not  substitute  other Assets for any  Purchased  Assets if (i) after
taking into account such  substitution,  a Collateral  Deficit were to occur, or
(ii) such substitution  would cause a Breach of any provision of this Agreement,
or (iii) Buyer does not consent to such substitution.

            (c) In the case of any  Transaction for which the Repurchase Date is
other than the Business Day  immediately  following  the Purchase  Date and with
respect  to  which  Seller  does  not have  any  existing  right  to  substitute
substantially  the same Assets for the Purchased  Assets,  Seller shall have the
right,  subject to the proviso to this  sentence,  upon  notice to Buyer,  which
notice shall be given at or prior to 10 am (New York time) on such Business Day,
to substitute  substantially the same Assets for any Purchased Asset;  provided,
however,  that Buyer may elect,  by the close of  business on the  Business  Day
notice is received,  or by the close of the next Business Day if notice is given
after 10 am (New York time) on such day, not to accept such substitution. In the
event such substitution is accepted by Buyer, such substitution shall be made


                                     - 34 -
<PAGE>

by  Seller's  transfer  to Buyer of such other  Assets and  Buyer's  transfer to
Seller of such Purchased Assets,  and after such  substitution,  the Substituted
Assets shall be deemed to be Purchased  Assets. In the event Buyer elects not to
accept such  substitution,  Buyer shall offer Seller the right to terminate  the
Transaction.

            (d) In the  event  Seller  exercises  its  rights to  substitute  or
terminate under sub-paragraph (c), Seller shall be obligated to pay to Buyer, by
the close of the Business Day of such  substitution or termination,  as the case
may be, an amount equal to (A) Buyer's actual cost (including all fees, expenses
and  commissions) of (i) entering into replacement  transactions;  (ii) entering
into or terminating hedge transactions; and/or (iii) terminating transactions or
substituting  securities in like  transactions  with third parties in connection
with or as a result of such  substitution or termination,  and (B) to the extent
Buyer determines not to enter into replacement  transactions,  the loss incurred
by Buyer directly  arising or resulting from such  substitution  or termination.
The foregoing amounts shall be solely determined and calculated by Buyer in good
faith, absent manifest error.

10. REPRESENTATIONS AND WARRANTIES

            (a) Buyer and  Seller  Representations  and  Warranties.  As of each
Purchase  Date,  each of Buyer and Seller  represents  and warrants to the other
that (i) it is duly authorized to execute and deliver this  Agreement,  to enter
into the  Transactions  contemplated  hereunder  and to perform its  obligations
hereunder and it has taken all  necessary  action to authorize  such  execution,
delivery and performance;  (ii) it will engage in such Transactions as principal
(or,  if agreed in  writing in advance  of any  Transaction  by the other  party
hereto,  as agent for a  disclosed  principal);  (iii) the person  signing  this
Agreement on its behalf is duly  authorized to do so on its behalf (or on behalf
of any such  disclosed  principal);  (iv) no approval,  consent,  authorization,
notice to,  filing  with,  or other act by, or in respect  of, any  Governmental
Authority or any other Person is required or  necessary in  connection  with the
Transactions  contemplated by this Agreement,  or with the execution,  delivery,
performance,  validity  or  enforceability  of this  Agreement  or any  Facility
Document  (other than  filings and  recordings  in respect of the Liens  created
hereunder), or, if required, such approval, consent,  authorization,  notice, or
filing has been or will,  prior to the Purchase Date, be obtained and will be in
full force and effect;  (v) the  execution,  delivery,  and  performance of this
Agreement and the Transactions  hereunder will not violate any law,  regulation,
order, judgment, decree, ordinance, charter, by-law, or rule applicable to it or
its property or constitute a default (or an event which, with notice or lapse of
time,  or both would  constitute  a default)  under or result in a breach of any
material  agreement or other  instrument by which it is bound or by which any of
its assets are  affected;  (vi) it has received  approval and  authorization  to
enter into this Agreement and each and every  Transaction  actually entered into
hereunder  pursuant to its internal  policies and procedures;  and (vii) neither
this Agreement nor any  Transaction or transfer of any Asset pursuant  hereto is
entered into in contemplation of insolvency or with any intent to hinder,  delay
or defraud any creditor.

            (b) Seller  Representations  and Warranties.  Seller  represents and
warrants to Buyer that as of the Purchase Date for the purchase of any Assets by
Buyer  from  Seller  and as of


                                     - 35 -
<PAGE>

the date of this Agreement and any Transaction  hereunder and at all times while
this Agreement and any Transaction thereunder is in full force and effect:

                  (i) All Documents True and Correct.  All  representations  and
      warranties  made  and  all  information,  reports,  financial  statements,
      exhibits,  schedules,  and  documents or copies of documents  furnished to
      Buyer by or on behalf  of Seller  pursuant  to or in  connection  with the
      negotiation,  preparation,  delivery or  performance of this Agreement and
      the  other  Facility  Documents,  or with  the  transactions  contemplated
      hereby,  are and will be true,  correct,  and  complete in every  material
      respect or (in the case of projections, based on reasonable estimates), at
      the time when made and at all times thereafter under this Agreement or, if
      limited to a specific  date,  as of the date to which they  refer,  and no
      such writing or  information  contains any untrue  statement of a material
      fact or omits to state a material  fact  necessary to make the  statements
      contained  herein or therein not  misleading.  There is no fact known to a
      Responsible  Officer  of  the  Seller  that,  after  due  inquiry,  should
      reasonably be expected to have a Material Adverse Effect that has not been
      disclosed  herein,  in  the  other  Facility  Documents  or  in a  report,
      financial statement, exhibit, schedule, disclosure letter or other writing
      furnished  to the  Buyer  for  use in  connection  with  the  transactions
      contemplated hereby or thereby.

                  (ii) Due Authority and Organization.  Seller is duly organized
      and validly existing,  and in good standing under the laws and regulations
      of the state of Delaware, and is duly licensed,  qualified to do business,
      and in good  standing  under  the laws of each  jurisdiction  in which the
      nature of the business conducted by it makes such qualification  necessary
      and where  failure  so to qualify  could be  reasonably  expected  (either
      individually  or in the  aggregate)  to have a  Material  Adverse  Effect.
      Seller has the authority  under its charter and by-laws and applicable law
      to enter into this Agreement and to perform all acts  contemplated  hereby
      or in connection  herewith,  and to borrow money,  sell Assets,  and grant
      Liens hereunder; and has taken all corporate action necessary to authorize
      the  execution,  delivery and  performance of this Agreement and the other
      Facility  Documents to which it is a party and to authorize the sale,  the
      borrowings,  and the granting of Liens on the terms and  conditions of the
      Agreement and the other  Facility  Documents,  and is in compliance in all
      material  respects with all  Requirements of Law, and has all governmental
      licenses,  authorizations,  consents  and  approvals  necessary to own and
      operate its Property,  to lease the Property it operates as lessee, and to
      carry on its business as now being or as proposed to be conducted.

                  (iii)  Binding  Obligations.  This  Agreement  and every other
      document to be executed by Seller pursuant to this Agreement,  is and will
      be, duly and validly  executed and delivered by the Seller and constitutes
      a legal, valid, binding and subsisting  obligation of Seller,  enforceable
      against the Seller in accordance  with its respective  terms,  except that
      (a)  such   enforcement   may  be  subject  to   bankruptcy,   insolvency,
      reorganization,  moratorium  or other  similar  laws  (whether  statutory,
      regulatory  or  decisional)   now  or  hereafter  in  effect  relating  to
      creditors' rights generally and (b) the remedy of specific performance and
      injunctive  and other forms of equitable  relief may be


                                     - 36 -
<PAGE>

      subject to certain  equitable  defenses and to the discretion of the court
      before which any proceeding therefor may be brought,  whether a proceeding
      at law or in equity;

                  (iv) No  Litigation.  There is no  action,  suit,  proceeding,
      inquiry, investigation, arbitration or investigation, at law or in equity,
      or before, or by any court,  Governmental  Authority,  arbitrator,  public
      board or body  pending,  in each case,  as to which  Seller  has  received
      service of  process,  or, to  Seller's  knowledge,  threatened  against or
      affecting Seller or any of its Subsidiaries or against any of its or their
      respective Properties or revenues, which, either in any one instance or in
      the aggregate,  which if adversely determined would individually or in the
      aggregate  result  in any  Material  Adverse  Effect,  or in any  material
      impairment  of the right or  ability  of  Seller to carry on its  business
      substantially as now conducted,  or to fulfill its obligations  hereunder,
      or in any material liability on the part of the Seller.

                  (v) Financial Statements.

                        (A) (i) The audited  financial  statements of the Seller
and its consolidated  Subsidiaries as of March 31, 1999, heretofore furnished to
Buyer and as of the end of Seller's fiscal year,  thereafter furnished to Buyer,
fairly   present  the  financial   position  of  Seller  and  its   consolidated
subsidiaries on a consolidated basis as of March 31 of such year and for the one
year period then ended, subject to any qualifications set forth therein.

                           (ii) The unaudited quarterly financial statements of
the Seller  and its  consolidated  Subsidiaries  as of the most  recent  date of
delivery,  are true complete and correct,  and present  fairly the  consolidated
financial  position of the Seller and its  consolidated  Subsidiaries as at such
dates and the consolidated  results of their  operations and their  consolidated
cash flows for the fiscal quarter then ended,  subject to any qualifications set
forth therein.

                        (B) Such  financial  statements,  including  the related
schedules and notes thereto,  has been prepared in accordance  with GAAP applied
consistently  throughout  the  periods  involved  (except  as  approved  by such
accountants  or  Responsible  Officer,  as the  case  may be,  and as  disclosed
therein).

                        (C)  Neither  the  Seller  nor  any of its  consolidated
Subsidiaries had, at the date of the financial  statement referred to above, any
material guarantee  obligation,  contingent liability or liability for taxes, or
any  long-term  lease or unusual  forward or  long-term  commitment,  including,
without  limitation,  any  interest  rate or foreign  currency  swap or exchange
transaction,  or  other  financial  derivative  of  the  nature  required  to be
disclosed by GAAP in such  financial  statements,  which is not reflected in the
foregoing statements or in the notes thereto.

                  (vi) [Intentionally Omitted.]

                  (vii)  Investment  Company Act and Other  Limits on  Incurring
Indebtedness. Seller is not required to be registered as an "investment company"
under the


                                     - 37 -
<PAGE>

Investment  Company  Act of  1940,  as  amended,  and  Seller  is not a  company
"controlled"  by an  "investment  company".  Seller is not subject to regulation
under any Federal or state  statute or  regulation  which  limits its ability to
incur Indebtedness.

                  (viii) Transfer of Assets.  All actions  necessary to transfer
to Buyer the  interests  in the  Eligible  Assets and the  Fallout  Assets to be
purchased  have been or are currently  being taken and Seller has not offered or
sold,  and will not offer or sell,  any such  Assets in any  manner  that  would
render the  issuance and sale of the such Assets a violation of Section 5 of the
Securities Act of 1933, as amended,  or any state  securities or "Blue Sky" laws
or require  registration  pursuant thereto,  nor has it authorized,  nor will it
authorize, any person to act in such manner;

                  (ix) Chief  Executive  Office;  Chief  Operating  Office.  The
Seller's chief executive  office and Chief  Operating  Office on the date hereof
is, and for the immediately preceding four months, was located at 277 Park Ave.,
New York, New York 10172.

                  (x)  Location of Books and  Records.  The  location  where the
Seller keeps its books and records  (excluding  all  computer  tapes and records
relating to the Assets which are held by the Subservicer) is its chief executive
office or its chief operating office.

                  (xi) Subsidiaries. Seller has identified on Schedule 1 of this
Agreement, each Material Subsidiary which exists on the date hereof.

                  (xii) No Legal Bar. The execution, delivery and performance of
this Agreement and the Facility Documents, the sale and borrowings hereunder and
the use of the  proceeds  thereof  will not  violate any  Requirement  of Law or
Contractual  Obligation of the Seller or of any of its Material Subsidiaries and
will not result in, or require,  the creation or  imposition  of any Lien (other
than the Liens created  hereunder) on any of its or their respective  Properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation.

                  (xiii)  Margin  Regulations.  No part of the  proceeds  of any
Transactions  will be used for  "purchasing"  or "carrying"  any "margin  stock"
within the  respective  meanings of each of the quoted terms  under,  or for any
other purpose which  violates or would be  inconsistent  with the  provisions of
Regulations T, U, or X.

                  (xiv) Taxes. Each of the Seller and its Subsidiaries has filed
all Federal and state income tax returns and all other material tax returns that
are  required  to be filed by them and has paid all taxes due  pursuant  to such
returns or pursuant to any  assessment  received by any of them,  except for any
such taxes or  assessments,  if any, that are being  appropriately  contested in
good faith by appropriate  proceedings  diligently conducted and with respect to
which adequate reserves in conformity with GAAP have been provided. The charges,
accruals  and  reserves  on  Seller's  books  in  respect  of  taxes  and  other
governmental  charges are, in Seller's opinion,  adequate.  No tax Lien has been
filed,  and, to the knowledge of the Seller,  no claim is being  asserted,  with
respect to any such tax or assessment.


                                     - 38 -
<PAGE>

                  (xv)  ERISA.  Each  Plan  to  which  Seller,  or  any  of  its
Subsidiaries make direct  contributions,  and, to the knowledge of Seller,  each
other  Plan  and each  Multiemployer  Plan,  is in  compliance  in all  material
respects with, and has been  administered in all material respects in compliance
with,  the  applicable  provisions  of ERISA,  the Code and any other federal or
state law.

                  (xvi)  No  Broker.  Seller  has not  dealt  with  any  broker,
investment banker, agent, or other person, except for Buyer, who may be entitled
to any commission or compensation in connection with the sale of Purchase Assets
pursuant to this Agreement.

                  (xvii)  Collateral.  (A) The  provisions  of  this  Agreement,
together with delivery of the Asset Files as  contemplated  herein are effective
to either (i) convey to the Buyer  ownership of each Purchased  Assets,  or (ii)
create in favor of the Buyer a valid first priority  perfected security interest
in all  right,  title  and  interest  of the  Seller,  in,  to,  and  under  the
Collateral.

                        (B) Seller  represents  and  warrants  to Buyer (i) with
respect to each Collateralized Note (other than any Empire  Collateralized Note)
purchased  hereunder that such  Collateralized Note is secured by Mortgage Loans
which conform in all respects to the appropriate  representations and warranties
set  forth  above,  including,   without  limitation,  the  representations  and
warranties  set forth in  Exhibit V hereto  and all  other  representations  and
warranties that Buyer shall reasonably  require from time to time, and (ii) with
respect to each Empire  Collateralized Note purchased hereunder that such Empire
Collateralized  Note is secured by Mortgage  Loans which conform in all respects
to the representations and warranties set forth in Exhibit V(A) hereto.

                  (xviii) UCC Filing.  Upon (1) receipt by the Custodian of each
Note, and (2) the filing of financing  statements on Form UCC-1 naming the Buyer
as "Secured Party" and the Seller as "Debtor", and describing the Collateral, in
the jurisdictions and recording offices listed on Schedule 2 attached hereto, in
both instances,  the security interests granted hereunder in the Collateral will
constitute fully perfected first-priority security interests (to the extent such
interest can be perfected by filing under the Uniform Commercial Code) under the
Uniform  Commercial  Code in all right,  title and interest of the Seller in, to
and under such Collateral.

                  (xix)  Origination  Practices.  The origination and collection
practices  used by Seller  or the  Qualified  Originator,  if  applicable,  with
respect  to each  Asset (i) have  been and are in all  respects  legal,  proper,
prudent and customary in the  origination  and loan servicing  business for that
type of asset,  and (ii) are  materially  in  accordance  with the  Underwriting
Guidelines  attached  hereto and the  documentation  is  consistent  in form and
substance with the Seller's loan documents  approved by Buyer for use under this
Agreement,  and each deviation therefrom would not be deemed to be material by a
prudent lender experienced in originating Assets of that nature, and in no event
will have a Material Adverse Effect.

                  (xx) [Intentionally Omitted]


                                     - 39 -
<PAGE>

                  (xx) No Event of  Default.  Neither  the Seller nor any of its
Subsidiaries  is in  default  under or with  respect  to any of its  Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse  Effect.  No Default or Event of Default has occurred and is  continuing
hereunder.

                  (xxi) No Violation of Environmental  Laws.  Neither Seller nor
any of its Subsidiaries has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with any environmental  laws with regard to any of its Properties,
nor does Seller have knowledge or reason to believe that any such notice will be
received or is being threatened.

                  (xxii) True Sales. Any Asset funded in the name of or acquired
by a Qualified  Originator which is an Affiliate of the Seller has been conveyed
to the Seller  pursuant to a legal sale,  and if so requested  by the Buyer,  is
covered by an opinion of counsel to that effect in form and substance acceptable
to the Buyer.

                  (xxiii) Selection Process.  The Purchased Assets were selected
from among the Assets in Seller's portfolio as to which the  representations and
warranties set forth in this Agreement  could be made and such selection was not
intentionally made in a manner so as to result in a Material Adverse Effect upon
Buyer,  or so as to  intentionally  result  in  Assets  less  desirable  or less
valuable than other comparable assets owned by the Seller.

                  (xxiv) Computer System.  Seller and Subservicer have each made
a full and  complete  assessment  of all  issues  which  may be  related  to the
occurrence  of the year  2000,  including  all issues  related  to its  computer
program  and  software  (the  "Year  2000  Issues"),  and  has a  realistic  and
achievable  program for  remediating the Year 2000 Issues on a timely basis (the
"Year 2000  Program").  Based on such  assessment  and on the Year 2000 Program,
Seller does not reasonably anticipate that Year 2000 Issues will have a material
adverse effect on Seller's operations or financial condition.

            (c)  Interim  Servicer   Representations  and  Warranties.   Interim
Servicer  represents and warrants to Buyer that, as of the Purchase Date for the
purchase of any Assets by Buyer from Seller and as of the date of this Agreement
and any  Transaction  hereunder  and at all times while this  Agreement  and any
Transaction  thereunder is in full force and effect, each of the representations
and warranties set forth in Subsection 7.01(b) of the Purchase Facility are true
and correct in all material respects.

11. NEGATIVE COVENANTS OF SELLER

            On and as of the date of this  Agreement  and each Purchase Date and
until  this  Agreement  is no longer in force with  respect to any  Transaction,
Seller covenants that it will not:

            (a)  exercise  any  right to  change  or  consent  to a change  in a
Servicer of Purchased  Assets without the prior written consent of the Buyer, or
permit any Person  other than the Servicer or the  Subservicer,  as the case may
be, to service Purchased Assets without the prior written consent of Buyer;


                                     - 40 -
<PAGE>

            (b) after the occurrence and during the  continuation of an Event of
Default make any Restricted Payment;

            (c) take any action  which would  directly or  indirectly  impair or
adversely  affect (i) Buyer's  title to or lien on any  Purchased  Assets or any
other  Collateral  or (ii)  the  value  of any  Purchased  Assets  or any  other
Collateral  except,  in the case of this clause (ii), any action solely relating
to, resulting  solely from, or arising solely out of the financial  condition of
the Seller;

            (d) pledge,  assign, convey, grant, bargain, sell, set over, deliver
or otherwise  transfer any interest in the Purchased  Assets to any Person other
than  Buyer,  nor will  Seller  create,  incur,  or  permit  to exist  any Lien,
encumbrance  or security  interest in or on the  Purchased  Assets or any of the
Collateral;

            (e) permit or allow others to amend, modify, terminate, or waive any
provision  of any  Purchased  Asset in any manner  which  should  reasonably  be
expected to materially and adversely affect the value of such Purchased Asset;

            (f) take any action which could  reasonably be expected to result in
a Material Adverse Effect;

            (g)  engage,  to any  substantial  extent,  in any  line or lines of
business  activity other than the businesses now generally carried out by it, or
cease or take any action to cease (or permit any  Subsidiary  of Seller to cease
or to take any action to cease) to be in the  business of  originating  Mortgage
Loans;

            (h) (A) permit any of its  Subsidiaries to sell,  lease or otherwise
transfer any property or assets to, or purchase,  lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates (an "Affiliate  Transaction") unless the terms thereof (i) are
no less  favorable  to the  Seller or such  Subsidiary  than those that could be
obtained at the time of such transaction in arm's-length  dealings with a Person
who is not such an Affiliate,  (ii) if such  Affiliate  Transaction  involves an
amount  in  excess  of  $2,000,000  (or the  equivalent  amount  in any  foreign
currency)  (x) are set forth in writing and (y) have been approved by a majority
of the  members  of the  Board of  Directors  having no  personal  stake in such
Affiliate Transaction and (iii) if such Affiliate Transaction involves an amount
in excess of  $10,000,000  (or the equivalent  amount in any foreign  currency),
have been determined by a nationally  recognized  investment  banking firm to be
fair from a financial standpoint, to the Seller and its Subsidiaries.

                  (B) Without  limiting the  generality of any other  provisions
set forth in this  Agreement,  the  provisions of this Section  (A)(i) shall not
prohibit (i) any Permitted Investment, (ii) any issuance of securities, or other
payments,  awards or grants in cash, securities or otherwise pursuant to, or the
funding of,  employment  arrangements,  stock options and stock  ownership plans
approved by the Board of Directors,  (iii) the grant of stock options or similar
rights to employees  and directors of the Seller  pursuant to plans  approved by
the Board of  Directors,  (iv) loans or advances to  employees  in the  ordinary
course of business in  accordance


                                     - 41 -
<PAGE>

with the past practices of the Seller or its Subsidiaries,  but in any event not
to exceed  $10,000,000  (or the  equivalent  amount in any foreign  currency) in
aggregate  principal  amount  outstanding  at any one time,  (v) the  payment of
reasonable  fees to  directors  of the Seller and its  Subsidiaries  who are not
employees of the Seller or its  Subsidiaries,  (vi) any  Affiliate  Transactions
between the Seller and a Subsidiary  or between  consolidated  Subsidiaries  (in
each case  other than any  Subsidiary  that is an  "affiliate"  (as such term is
defined in the  Securities  and Exchange Act) of any  Affiliate  (other than any
Subsidiary) of the Seller and (vii) transactions pursuant to any agreement as in
existence as of the date between the Seller or its  Subsidiaries and Continental
Grain Company, a Delaware corporation, or one of its Subsidiaries.

            (i) become an "investment  company" or a company  "controlled" by an
"investment  company,  within the  meaning of the  Investment  Company  Act,  as
amended.

            (j) move its chief executive  office from its address as of the date
hereof unless it shall have provided Buyer 30 days' prior written notice of such
change and an amendment to the UCC-1 filed pursuant thereto.

12. AFFIRMATIVE COVENANTS OF SELLER

            (a)  Financial  Statements.  Seller  covenants  that  promptly  upon
preparation, but in no event later than 90 days following the end of each fiscal
quarter  (other than the end of each fiscal  year which is  expressly  addressed
below), Seller shall deliver to Buyer the financial statements of Seller and its
consolidated Subsidiaries as of the end of each fiscal quarter. In the event the
parties hereto agree to extend the term of this Agreement,  Seller shall deliver
to  Buyer  promptly  upon  preparation,  but in no  event  later  than  105 days
following  the end of such fiscal  year,  the audited  financial  statements  of
Seller and its consolidated Subsidiaries as of the end of each fiscal year. Each
financial   statement   delivered  pursuant  to  this  Section  12(a)  shall  be
accompanied  by a  certificate  of a  Responsible  Officer of the Seller,  which
certificate  shall  state  that said  consolidated  financial  statement  fairly
presents the consolidated and consolidating  financial  condition and results of
operations of the Seller and its  consolidated  Subsidiaries  in accordance with
GAAP,  consistently  applied, as at the end of, and for, such period (subject to
normal  year-end audit  adjustments and any relevant  qualifications)  and which
shall  also  set  forth  the  calculations  demonstrating  compliance  with  the
covenants set forth in Section 12(e) hereof.

            (b) Reports.  Seller,  with respect to any Purchased Assets serviced
by  Seller,  Subservicer  or  any of  Seller's  Affiliates,  shall  periodically
deliver,  or with respect to any other Purchased Assets,  otherwise use its best
efforts to cause to be periodically  delivered,  to Buyer,  the report,  if any,
prepared by the relevant  trustee or servicer  setting  forth  payment  activity
including the last paid-to date,  defaults and delinquencies with respect to the
underlying  loans or receivables  in respect of each  Purchased  Asset and shall
prepare  and  deliver  reports  each  month,  detailing,  with  respect  to  all
Transactions,  such  information  as Buyer  may,  from time to time,  reasonably
request,  including,  but not limited to,  purchase  activity  and  valuation of
Purchased  Assets,  which  reports  shall be  rendered  no  later  than the 15th
calendar day of any month;  provided,  however,  that such information (i) is of
the type  usually  provided by  servicers  and


                                     - 42 -
<PAGE>

master  servicers of such type of Purchased Asset and (ii) is available  without
undue hardship or expenses  being  incurred by Seller,  any of its Affiliates or
any servicer of the Purchased Assets.

            (c)  Compliance  With  Laws.  Seller  will  comply  in all  material
respects  with all laws,  rules  and  regulations  to which it is or may  become
subject.

            (d) Conduct of Business.  Seller will do, and will cause each of its
Material  Subsidiaries to do, all things necessary to remain duly  incorporated,
validly existing and in good standing in its  jurisdiction of incorporation  and
will  maintain  all  requisite   authority  to  conduct  its  business  in  each
jurisdiction  in which its business is  conducted,  except where such failure to
maintain such  authority or be in good standing could not reasonably be expected
to have a Material Adverse Effect.

            (e) [Intentionally Omitted]

            (f) Year 2000 Compliance. The Seller shall take and shall cause each
of its Material  Subsidiaries  and  Subservicer  to take all such actions as are
reasonably  necessary  to  successfully  implement  the Year 2000 Program and to
assure that the Year 2000 Issues will not have a material  adverse effect on the
Seller's  operations or financial  condition.  By September 30, 1999, the Seller
will provide written  assurance that it is Year 2000 compliant (i.e.,  completed
all testing  satisfactorily  and taken all other steps  reasonably  necessary to
ensure Year 2000 readiness).  If satisfactory  assurances can not be made, Buyer
will have the  right to cease  further  Transactions.  After a 30  calendar  day
remedy period, the non-compliance will constitute an Event of Default.

            (g) Taxes.  Each of the Seller and its  Subsidiaries  shall file all
Federal and state income tax returns and all other material tax returns that are
required  to be filed by them and  shall  pay all  taxes  due  pursuant  to such
returns or pursuant to any  assessment  received by any of them,  except for any
such taxes or assessments,  if any, that may be appropriately  contested in good
faith by appropriate  proceedings diligently conducted and with respect to which
adequate reserves in conformity with GAAP have been provided.

            (h) Notifications. Seller will notify Buyer in writing of any of the
following promptly upon learning of the occurrence thereof,  describing the same
and, if applicable, any remedial steps being taken with respect thereto:

                  (i)  The   occurrence  of  an  Event  of  Default  or  Default
      hereunder;

                  (ii) The institution of any litigation, arbitration proceeding
      or  governmental  proceeding  which,  in the opinion of counsel to Seller,
      will have a Material Adverse Effect;

                  (iii)  The  occurrence  of any  event  which  would  allow the
      obligee  under any material  loan  agreement to which Seller or any of its
      Material  Subsidiaries  is  bound  to  declare  an  event  of  default  or
      accelerate the  obligations of Seller or any of its Material  Subsidiaries
      thereunder;


                                     - 43 -
<PAGE>

                  (iv) The occurrence of an event of default under any servicing
      agreement  which  relates  to  Purchased  Assets  to which  the  Seller or
      Subservicer is a party;

                  (v)  Promptly  upon  receipt  of notice or  knowledge  that an
      underlying Mortgaged Property has been damaged by waste, fire,  earthquake
      or  earth  movement,  windstorm,  flood,  tornado  or other  casualty,  or
      otherwise damaged so as to affect adversely its Market Value;

                  (vi)  Promptly  upon receipt of notice or knowledge of (i) any
      default related to any Purchased Asset, (ii) any Lien or security interest
      (other than  security  interests  created  hereby)  on, or claim  asserted
      against,  any of the  Purchased  Assets  or (iii)  any  event or change in
      circumstances  which  could  reasonably  be  expected  to have a  Material
      Adverse Effect;

                  (vii)  Promptly  upon  discovery  that any  representation  or
      warranty contained herein is untrue or incorrect in any material respect;

                  (viii)  Promptly  upon  receipt of notice or  knowledge of the
      occurrence  of  Seller's  inability  or  failure  to meet the terms of any
      covenant in any of the Facility Documents;

                  (ix) Promptly upon the entry of any judgment or decree against
      Seller or any Material Subsidiary of Seller if the aggregate amount of all
      judgments and decrees then outstanding against Seller or Seller's Material
      Subsidiary exceeds $2,500,000;

                  (x)  Promptly  upon  receipt of notice or  knowledge  that the
      arrival of the year 2000 will  materially  and adversely  affect  Seller's
      business or any Transactions executed herewith; and

                  (xi)  Promptly  upon  the  acquisition  or  formation  of  any
      additional Material Subsidiaries.

            (i) The Seller will defend the Purchased  Assets  against,  and will
take such other action as is necessary to remove, any Lien, security interest or
claim on or to the Purchased Assets,  other than the security  interests created
hereunder, and the Seller will defend the right, title and interest of the Buyer
in and to any of the  Purchased  Assets  against  the claims and  demands of all
Persons whomsoever.

            (j) If at any time there exists a Collateral Deficiency,  the Seller
shall cure same in accordance with Section 4(a) hereof.

            (k) In the event that the  Assets to be  purchased  would  cause the
aggregate  outstanding  principal  balance  of Assets to  consist  of  Mortgaged
Property from any state to exceed such concentration percentage as determined by
the Buyer in its sole good faith discretion then, upon request by the Buyer, the
Seller  deliver an opinion of  counsel  acceptable  to the Buyer in such  state,
substantially in the form of items #12 and 13 of Exhibit VIII.


                                     - 44 -
<PAGE>

            (l) Within one (1) Business Day following a Change of Control of the
Seller,  the Seller shall pay the  Repurchase  Price for all  Transactions  then
outstanding plus all other amounts due and owing to the Buyer hereunder.

            (m) Within one (1) Business Day following a Default  hereunder,  the
Seller shall deliver to Buyer a duly executed Assignment and Conveyance.

13. EVENTS OF DEFAULT

            (a) If any of the  following  events  (each an "Event  of  Default")
occur,  Seller and Buyer  shall  have the  rights  set forth in  Section  14, as
applicable:

                  (i) Seller fails to pay the Repurchase  Price in full when due
      or Buyer  fails to deliver  the  Purchased  Assets  against  full  payment
      therefor;

                  (ii) Seller or Buyer fails to satisfy or perform any  material
      obligation or covenant under this  Agreement  (including any breach of the
      obligations  set forth in  Section  4), or Seller or Buyer  shall  fail to
      satisfy or perform any payment or purchase or repurchase  obligation  when
      due hereunder;

                  (iii) an Act of  Insolvency  occurs with  respect to Seller or
      Buyer;

                  (iv) any  Breach,  occurs,  other  than a  Breach  of an Asset
      Representation,  or any Breach of an Asset Representation occurs, and such
      Breach is not corrected  within five (5) Business Days, or any certificate
      furnished to the Buyer shall prove to have been false or misleading in any
      material respect as of the time made or furnished;

                  (v)  Seller  or Buyer  shall  admit its  inability  to, or its
      intention not to, perform any of its obligations hereunder;

                  (vi)  any   governmental,   regulatory,   or   self-regulatory
      authority  takes  any  action  to  remove,  limit,  restrict,  suspend  or
      terminate  the rights,  privileges,  or operations of Seller or any of its
      Material  Subsidiaries,  including  suspension  as an  issuer,  lender  or
      seller/servicer of related types of assets,  which in each case materially
      adversely affects the value of the Purchased Assets or Buyer's interest in
      the Purchase Assets;

                  (vii) any  Change of  Control  of the  Seller or any  Material
      Subsidiary  shall have  occurred  without  the prior  consent of the Buyer
      which  consent  with  respect  to any  Change  of  Control  of a  Material
      Subsidiary shall not be unreasonably withheld;

                  (viii)  Buyer,  in its good faith  judgment,  believes  that a
      Material Adverse Effect has occurred;

                  (ix) The  occurrence and  continuance of a material  "event of
      default" or of an "event of  termination"  on the part of Seller under the
      Purchase  Facility or any other agreement  between Seller (or an


                                     - 45 -
<PAGE>

      Affiliate thereof) on the one hand, and Buyer (or an Affiliate thereof) on
      the other  hand,  which has not been  waived by Buyer (or its  Affiliate),
      provided that such event of default or event of termination does not arise
      solely as a result of a default under an agreement to which Seller (or its
      Affiliate) is not a party;

                  (x) This  Agreement  shall  for any  reason  cease to create a
      valid,  first priority  security  interest in any of the Purchased  Assets
      purported to be covered hereby.

            (b) In making a determination  as to whether an Event of Default has
occurred,  Buyer shall be entitled to rely on reports  published or broadcast by
media  sources  believed by Buyer to be generally  reliable  and on  information
provided to it by any other  sources  believed by it to be  generally  reliable,
provided that Buyer reasonably and in good faith believes such information to be
accurate and has taken such steps as may be reasonable in the  circumstances  to
attempt to verify such information.

14. REMEDIES

            (a) If an Event of  Default  occurs  with  respect  to  Seller,  the
following rights and remedies are available to Buyer:

                  (i) At the option of Buyer,  exercised  by  written  notice to
      Seller  (which option shall be deemed to have been  exercised,  even if no
      notice is given, immediately upon the occurrence of an Act of Insolvency),
      the  Repurchase  Date  for each  Transaction  hereunder  shall  be  deemed
      immediately to occur.  Notwithstanding  that the Repurchase  Date shall be
      deemed  immediately to have occurred upon the exercise or deemed  exercise
      of such option by Buyer, for purposes of determining the Repurchase Price,
      the Repurchase  Date shall be the date  specified in the Purchase  Request
      for such Transaction.

                  (ii) If Buyer  exercises  or is deemed to have  exercised  the
      option referred to in subsection (a)(i) of this Section:

                        (A) Seller's  obligations  hereunder to  repurchase  all
      Purchased Assets in such Transactions  shall thereupon become  immediately
      due and payable;

                        (B) to the  extent  permitted  by  applicable  law,  the
      Pricing Rate shall be the Post Default Rate; and

                        (C) all Income  actually  received by Buyer  pursuant to
      Section 5 shall be applied to the aggregate  unpaid  Repurchase Price owed
      by Seller.

                  (iii) After two (2)  Business  Days'  notice to Seller  (which
      notice need not be given if an Act of Insolvency shall have occurred,  and
      which may be the notice given under  subsection  (a)(i) of this  Section),
      Buyer may (A) immediately sell, without notice or demand of any kind, at a
      public or private sale, on a  servicing-released  basis, and at such price
      or prices as Buyer may reasonably deem  satisfactory  any or all Purchased
      Assets  subject to a Transaction  hereunder or (B) in its sole  discretion
      elect, in lieu of selling all or a portion of such Purchased Assets,  give
      Seller credit for such


                                     - 46 -
<PAGE>

      Purchased  Assets in an amount equal to the Market Value of the  Purchased
      Assets against the aggregate unpaid Repurchase Price and any other amounts
      owing by Seller  hereunder.  The proceeds of any  disposition of Purchased
      Assets shall be applied first to the costs and expenses  incurred by Buyer
      in connection  with Seller's  Default;  second to  consequential  damages,
      including,  but not  limited to,  costs of cover  and/or  related  hedging
      transactions;  third to the  Repurchase  Price;  and  fourth  to any other
      outstanding obligation of Seller to Buyer or its Affiliates.

                  (iv) Buyer or an Affiliate  thereof may deliver the  Purchased
      Assets which are subject to a Takeout Commitment, or a purchase commitment
      by a purchaser,  to the Takeout Investor, or such other purchaser,  as the
      case may be, in exchange for securities or cash,  which securities or cash
      shall then be treated as Purchased Assets,  and Seller hereby  irrevocably
      appoints  Buyer to act as its  attorney-in-fact  and  agent  to take  such
      action upon the  occurrence  of an Event of Default as may be necessary to
      obtain such securities or cash.

                  (v) The  parties  recognize  that it may  not be  possible  to
      purchase or sell all of the Purchased Assets on a particular Business Day,
      or in a transaction with the same purchaser, or in the same manner because
      the market  for such  Purchased  Assets may not be liquid.  In view of the
      nature of the Purchased  Assets,  the parties agree that  liquidation of a
      Transaction or the underlying  Purchased  Assets does not require a public
      purchase or sale and that a good faith  private  purchase or sale shall be
      deemed to have been made in a commercially reasonable manner. Accordingly,
      Buyer  may  elect,  in  its  sole  discretion,  the  time  and  manner  of
      liquidating  any Purchased  Asset and nothing  contained  herein shall (A)
      obligate  Buyer to liquidate any Purchased  Asset on the  occurrence of an
      Event of Default or to liquidate all  Purchased  Assets in the same manner
      or on the same  Business  Day or (B)  constitute  a waiver of any right or
      remedy of Buyer.  However,  in recognition of the parties'  agreement that
      the Transactions  hereunder have been entered into in consideration of and
      in reliance  upon the fact that all  Transactions  hereunder  constitute a
      single business and contractual relationship and that each Transaction has
      been entered into in consideration of the other Transactions,  the parties
      further  agree that Buyer  shall use its best  efforts  to  liquidate  all
      Transactions  hereunder  upon the  occurrence  of an Event of  Default  as
      quickly as is  prudently  possible  in the sole good faith  discretion  of
      Buyer.

                  (vi)  Buyer  shall,  without  regard  to the  adequacy  of the
      security for Seller's obligations under this Agreement, be entitled to the
      appointment  of a  receiver  by any  court  having  jurisdiction,  without
      notice, to take possession of and protect, collect, manage, liquidate, and
      sell the Collateral or any portion  thereof,  and collect the payments due
      with respect to the  Collateral or any portion  thereof.  Seller shall pay
      all  costs  and  expenses   incurred  by  Buyer  in  connection  with  the
      appointment   and   activities  of  such  receiver,   including,   without
      limitation, reasonable out-of-pocket legal fees.

                  (vii) Seller  agrees that Buyer may obtain an injunction or an
      order of specific  performance to compel Seller,  as the Interim Servicer,
      to fulfill its  obligations as


                                     - 47 -
<PAGE>

      set forth in Section  25, if Seller,  as the  Interim  Servicer,  fails or
      refuses to perform its obligations as set forth therein.

                  (viii)  Seller  shall be liable to Buyer for (A) the amount of
      all expenses,  including  reasonable  legal or other expenses  incurred by
      Buyer in connection  with or as a consequence of an Event of Default,  and
      (B) actual damages,  including,  without limitation,  all reasonable legal
      fees and expenses and other costs  incurred in connection  with hedging or
      covering transactions.

                  (ix) Buyer  shall have all the  rights and  remedies  provided
      herein,  provided by applicable federal,  state,  foreign,  and local laws
      (including, without limitation, the rights and remedies of a secured party
      under the Uniform  Commercial Code of the State of New York, to the extent
      that the Uniform  Commercial  Code is applicable,  and the right to offset
      any  mutual  debt and  claim),  in equity,  and under any other  agreement
      between Buyer and Seller.

                  (x) Buyer may exercise  one or more of the remedies  available
      to Buyer  immediately  upon the  occurrence  of an Event of  Default  and,
      except to the  extent  provided  in  subsections  (a)(i) and (iii) of this
      Section,  at any time thereafter  without notice to Seller. All rights and
      remedies  arising  under  this  Agreement  as  amended  from  time-to-time
      hereunder are cumulative and not exclusive of any other rights or remedies
      which Buyer may have.

                  (xi) In addition to its rights hereunder, Buyer shall have the
      right  to  proceed  against  any  assets  of  Seller  which  may be in the
      possession of Buyer,  its  Affiliates  or their  designee  (including  the
      Custodian),  including  the right to liquidate  such assets and to set off
      the  proceeds  against  monies  owed by Seller to Buyer  pursuant  to this
      Agreement.  Buyer may set off cash, the proceeds of the liquidation of the
      Purchased  Assets,  any Collateral or its proceeds,  and all other sums or
      obligations  owed by Buyer or its  Affiliates  to  Seller  against  all of
      Seller's  obligations  to Buyer,  whether  under this  Agreement,  under a
      Transaction,  or  under  any  other  agreement  between  the  parties,  or
      otherwise, whether or not such obligations are then due, without prejudice
      to  Buyer's  right to  recover  any  deficiency.  Any cash,  proceeds,  or
      property in excess of any amounts due, or which Buyer reasonably  believes
      may become  due,  to it from  Seller  shall be  returned  to Seller  after
      satisfaction of all obligations of Seller to Buyer.

                  (xii)  Buyer may  enforce  its rights and  remedies  hereunder
      without prior  judicial  process or hearing,  and Seller hereby  expressly
      waives any  defenses  Seller  might  otherwise  have to  require  Buyer to
      enforce  its rights by  judicial  process.  Seller also waives any defense
      Seller might  otherwise have arising from the use of nonjudicial  process,
      enforcement and sale of all or any portion of the Collateral,  or from any
      other election of remedies.  Seller  recognizes that nonjudicial  remedies
      are consistent with the usages of the trade,  are responsive to commercial
      necessity and are the result of a bargain at arm's length.


                                     - 48 -
<PAGE>

            (b) Upon the  occurrence  of one or more Events of  Default,  and in
addition to the remedies otherwise  provided herein,  Buyer shall have the right
to obtain  physical  possession of the Servicing  Records and all other files of
Seller  relating  to the  Purchased  Assets and all  documents  relating  to the
Purchased  Assets which are then or may thereafter  come in to the possession of
Seller or any third party  acting for Seller and Seller  shall  deliver to Buyer
such assignments as Buyer shall request.  Seller shall be responsible for paying
any fees of any Subservicer  resulting from the termination of a Subservicer due
to an Event of Default.  Buyer shall be entitled to specific  performance of all
agreements of Seller contained in this Agreement.

            (c) If an Event  of  Default  occurs  with  respect  to  Buyer,  the
following rights and remedies are available to Seller:

                  (i)  Upon  tender  by  Seller  of  payment  of  the  aggregate
      Repurchase  Price  for all such  Transactions,  Buyer's  right,  title and
      interest in all Purchased  Assets  subject to such  Transactions  shall be
      deemed  transferred  to  Seller,  and Buyer  shall  deliver or cause to be
      transferred all such Purchased Assets to Seller or its designee at Buyer's
      expense.

                  (ii) If Seller  exercises the option referred to in subsection
      (b)(i) of this Section and Buyer fails to deliver or cause to be delivered
      the Purchased  Assets to Seller or its designee,  after three (3) Business
      Day's  notice to  Buyer,  Seller  may (A)  purchase  Assets or  securities
      ("Replacement Assets") that are as similar as is reasonably practicable in
      characteristics,  outstanding  principal  amounts  (as a  pool)  and  Note
      Interest Rate to any  Purchased  Assets that are not delivered by Buyer to
      Seller or its designee as required hereunder or (B) in its sole discretion
      elect,  in lieu of  purchasing  Replacement  Assets,  to be deemed to have
      purchased  Replacement  Assets at a price therefor on such date,  equal to
      the Market Value of the Purchased Assets.

                  (iii)  Buyer  shall be liable to Seller  (A) with  respect  to
      Purchased Assets (other than Additional  Eligible Assets),  for any excess
      of the price  paid (or  deemed  paid) by  Seller  for  Replacement  Assets
      therefor over the  Repurchase  Price for such Purchased  Assets,  (B) with
      respect to Additional Eligible Assets, for the price paid (or deemed paid)
      by Seller for the Replacement Assets therefor, and (C) for actual damages,
      including,  without  limitation,  all costs  incurred in  connection  with
      hedging or covering  transactions.  In addition,  Buyer shall be liable to
      Seller for interest on such remaining  liability with respect to each such
      purchase  (or deemed  purchase)  of  Replacement  Assets  calculated  on a
      360-day  year basis for the actual  number of days  during the period from
      and including the date of such purchase (or deemed purchase) until paid in
      full by Buyer.  Such interest  shall be at the greater of the Pricing Rate
      or the Prime Rate.

15. DUE DILIGENCE

            (a)  Seller  acknowledges  that  Buyer  has  the  right  to  perform
continuing  due  diligence  reviews  with  respect to the Assets for purposes of
verifying  compliance with the  representations,  warranties and  specifications
made  hereunder,  or otherwise (the "Due Diligence  Review"),  and Seller agrees
that upon  prior  notice to  Seller,  provided  that,  if a Default  or Event


                                     - 49 -
<PAGE>

of Default shall have  occurred,  then without  notice,  Buyer or its authorized
representatives  will be  permitted  during  normal  business  hours to examine,
inspect, and make copies and extracts of, the Asset Files, Servicing Records and
any and all documents, records, agreements,  instruments or information relating
to such  Assets in the  possession  or under the  control of  Seller,  any other
Servicer or subservicer  and/or the Custodian.  Seller agrees that Buyer may, at
Buyer's  sole expense and with prior notice to Seller,  conduct  additional  Due
Diligence  Reviews.  Seller also shall make  available to Buyer a  knowledgeable
financial  or  accounting  officer  for  the  purpose  of  answering   questions
respecting  the Asset Files and the Assets.  Without  limiting the generality of
the foregoing,  Seller  acknowledges that Buyer may enter into Transactions with
the Seller based solely upon the information provided by Seller to Buyer and the
representations,  warranties and covenants  contained herein, and that Buyer, at
its  option,  has the right at any time to  conduct a partial  or  complete  due
diligence review on some or all of the Assets.  Buyer may underwrite such Assets
itself or engage a mutually agreed upon third party  underwriter to perform such
underwriting.  Seller  agrees  to  cooperate  with  Buyer  and any  third  party
underwriter in connection with such underwriting, including, but not limited to,
providing  Buyer  and any third  party  underwriter  with  access to any and all
documents,  records,  agreements,  instruments or  information  relating to such
Assets in the possession, or under the control, of Seller. Seller further agrees
that  Seller  shall  reimburse  Buyer  for any and all  out-of-pocket  costs and
expenses  reasonably  incurred by Buyer in  connection  with Buyer's  activities
pursuant to this Section 15.

16. SINGLE AGREEMENT

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

17. NOTICES AND OTHER COMMUNICATIONS

            Unless  another  address is specified  in writing by the  respective
party  to  whom  any  written  notice  or  other  communication  is to be  given
hereunder,  all such notices or communications  shall be in writing or confirmed
in writing and delivered to the intended  recipient at the "Address for Notices"
specified  below its name on the signature  pages  hereof.  Any notices or other
communications  permitted or required hereunder shall be in writing and shall be
deemed conclusively to have been given if (a) personally  delivered,  (b) mailed
by registered or certified mail, postage prepaid,  and return receipt requested,
(c) sent by express


                                     - 50 -
<PAGE>

courier  delivery  service and received by the party to whom it is sent,  or (d)
transmitted by confirmed telex or facsimile  transmission  (or any other type of
electronic transmission agreed upon by the parties).

18. ENTIRE AGREEMENT; SEVERABILITY

            This Agreement  constitutes the entire  understanding  between Buyer
and Seller with respect to the subject matter it covers and shall  supersede any
existing agreements  (including any summary of terms and conditions) between the
parties  containing  general terms and conditions  for  repurchase  transactions
involving Assets. By acceptance of this Agreement,  Buyer and Seller acknowledge
that  they  have  not  made,   and  are  not  relying  upon,   any   statements,
representations,  promises or undertakings not contained in this Agreement. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

19. EFFECTIVENESS; BINDING EFFECT; ASSIGNABILITY

            This  Agreement  shall  become  effective  when it shall  have  been
executed by the Buyer and Seller and thereafter  shall be binding upon and inure
to the  benefit  of the Buyer and  Seller and their  respective  successors  and
permitted  assigns.  The Seller may not assign or transfer  any of its rights or
obligations  hereunder  without the prior  written  consent of the Buyer,  which
consent may be granted or withheld in the Buyer's sole discretion. The Buyer may
assign all or any portion of its rights and obligations hereunder with the prior
consent of the Seller which shall not be unreasonably  withheld or delayed.  Any
request by Buyer for consent hereunder shall be deemed consented to by Seller if
not  objected to by Seller in writing  within two (2) Business  Days'  following
receipt thereof. If the Buyer so sells or assigns all or a portion of its rights
hereunder,  any reference in this Agreement to the Buyer shall  thereafter refer
to the Buyer and to the  respective  assignee to the extent of their  respective
interests and the assignee shall have, to the extent of such assignment  (unless
otherwise  provided therein) the same rights and benefits as it would if it were
the Buyer.  Each  assignment  pursuant to this Section  shall be effected by the
Buyer (or its  successor)  and the assignee  executing an  assignment  agreement
(appropriately  completed)  satisfactory  to the  Buyer.  The  Seller  agrees to
execute  such  documents  (including,  without  limitation,  amendments  to this
Agreement and the other Facility  Documents) as shall be necessary to effect the
foregoing.  Nothing in this  Agreement,  express or  implied,  shall give to any
Person,  other than the parties to this Agreement and their successor hereunder,
any benefit or any legal or equitable right, power,  remedy, or claim under this
Agreement.

20. TERMINABILITY

            This Agreement shall be terminated on the Final Repurchase Date, and
any outstanding Transactions shall become due on such date.  Notwithstanding any
such  termination  or  the  occurrence  of an  Event  of  Default,  all  of  the
representations,  warranties and covenants, and indemnities hereunder (including
those made in the Asset Representations) shall continue and survive.


                                     - 51 -
<PAGE>

21. GOVERNING LAW

            THIS  AGREEMENT  SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE
WITH,  THE INTERNAL  LAWS OF THE STATE OF NEW YORK WITHOUT  GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.

22. CONSENT TO JURISDICTION

            The parties irrevocably agree to submit to the personal jurisdiction
of the United States  District Court for the Southern  District of New York, the
parties  irrevocably  waiving  any  objection  thereto and waive all rights to a
trial by jury. If, for any reason,  federal  jurisdiction is not available,  and
only if federal jurisdiction is not available,  the parties irrevocably agree to
submit to the  personal  jurisdiction  of the Supreme  Court of the State of New
York, the parties irrevocably waiving any objection thereto and waive all rights
to a trial by jury.

23. NO WAIVERS, ETC.

            No express or implied waiver of any Event of Default by either party
shall  constitute  a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy  hereunder.  No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless  and until  such shall be in  writing  and duly  executed  by both of the
parties hereto.  Any such waiver or modification  shall be effective only in the
specific instance and for the specific purpose for which it was given.

24. INTENTIONALLY OMITTED

25. SERVICING

            (a) The Interim  Servicer,  at the Buyer's  option and  request,  as
independent contract interim servicer,  shall interim service and administer the
Purchased  Assets during the Interim  Servicing  Period in  accordance  with the
Accepted  Servicing  Practices.  Upon the  termination of the Interim  Servicing
Period,  the  Interim  Servicer  shall  cooperate  fully  with the Buyer and any
servicer to whom servicing or master  servicing of any Purchased  Asset is to be
transferred  and shall  promptly  provide Buyer or such successor  servicer,  as
applicable, all documents and records reasonably requested by it to enable it to
assume the Interim  Servicer's  functions as servicer hereunder and shall within
one (1)  Business  Day of  receipt  transfer  to the  Buyer  or  such  successor
servicer,  as  applicable,  all amounts which should have been  deposited in the
Buyer's  Account by the Interim  Servicer or which are thereafter  received with
respect to the  Purchased  Assets,  it being agreed that the Seller will pay all
fees and  expenses  incurred  in  connection  with such  transfer.  A  servicing
transfer shall be complete when the Buyer or its designated servicer confirms to
the Interim  Servicer that it has received all  necessary  data and documents to
perform its primary servicing or master servicing function,  as applicable,  and
all required notices have been mailed by the Interim  Servicer.  Notwithstanding
the purchase of Purchased Assets by Buyer,  during the Interim  Servicing Period
the Interim  Servicer  shall  continue to service the  Purchased  Assets for the
benefit  of  Buyer,  and,  if Buyer  shall  exercise  its


                                     - 52 -
<PAGE>

rights  to pledge or  hypothecate  the  Purchased  Assets  prior to the  related
Repurchase Date pursuant to Section 8, for the benefit of Buyer's  assigns.  The
Interim  Servicer may retain legal title to the Purchased  Assets solely for the
purpose of servicing or  supervising  the  servicing  of such  Purchased  Assets
during the Interim  Servicing  Period.  Any beneficial or equitable  interest in
Purchased  Assets shall remain in Buyer. The Buyer will pay the Interim Servicer
a monthly interim servicing fee to service the Purchased Assets to be calculated
in accordance  with the terms and  provisions of the Purchase  Facility.  To the
extent  the  Interim  Servicer  (or  an  Affiliate  thereof)  is  authorized  to
sub-service the Purchased Assets on behalf of the Servicer after the termination
of the Interim Servicing  Period,  the Buyer will pay such Subservicer a monthly
sub-servicing  fee to be calculated in accordance  with the terms and provisions
of the Purchase  Facility.  All servicing fees and compensation  with respect to
the servicing of the Assets shall be customary,  reasonable and consistent  with
industry practice.

            (b) The Seller agrees that the Seller assigns to the Buyer,  and the
Buyer is the owner of the entire  right,  title and  interest of the Seller,  if
any,  in and to all  servicing  rights and  Servicing  Records  relating  to the
Purchased  Assets,  including,  but  not  limited  to,  any  and  all  Servicing
Agreements,  files,  documents,  records,  data bases, computer tapes, copies of
computer tapes, proof of insurance  coverage,  insurance  policies,  appraisals,
other closing  documentation,  payment  history  records,  and any other records
relating to or evidencing the  servicing,  of Purchased  Assets (the  "Servicing
Records").  Seller grants Buyer a security  interest in all  servicing  fees and
rights relating to the Purchased Assets and all Servicing  Records to secure the
obligation of Seller or its designee to service in conformity  with this Section
and any other obligation of Seller to Buyer.  Seller covenants to safeguard such
Servicing  Records  and to  deliver  them  promptly  to  Buyer  or its  designee
(including the Custodian) at Buyer's request.

            (c)  If  the  Purchased   Assets  are  serviced  by  a  third  party
Subservicer  (including an Affiliate of Interim Servicer),  Interim Servicer (i)
shall  provide  a copy of the  servicing  agreement  to  Buyer  (the  "Servicing
Agreement"); (ii) hereby irrevocably assigns to Buyer and Buyer's successors and
assigns all right, title,  interest and the benefits of the Servicing Agreements
with respect to the Purchased Assets;  and (iii) shall provide to Buyer a letter
from  the   Subservicer  in  the  form  attached   hereto  as  Exhibit  II  (the
"Subservicing Notification Letter") to the effect that upon the earlier to occur
of (i) the termination of the Interim Servicing Period or (ii) the occurrence of
an Event of Default,  Buyer may terminate  the Servicing  Agreement and transfer
such servicing to its designee,  at no cost or expense to Buyer, it being agreed
that  Seller  will pay any and all fees  required  to  terminate  the  Servicing
Agreement and will cooperate to effectuate the transfer of servicing to Buyer or
its designee  including  paying the costs of shipping the  Servicing  Records to
Buyer or its  designee.  If an  Affiliate of Interim  Servicer is servicing  the
Purchased  Assets,  such  Affiliate,  Interim  Servicer  and Buyer shall enter a
Seller/Affiliate Agreement in the form of Exhibit VI hereto.

            (d) Interim Servicer shall not employ  sub-servicers  other than the
Subservicer to service the Purchased Assets during the Interim  Servicing Period
or thereafter  without the prior written  approval of Buyer.  Seller shall cause
any sub-servicers engaged by Interim Servicer to execute a letter agreement with
Buyer acknowledging Buyer's ownership of the Purchased Assets and agreeing that,
upon  notice  from  Buyer (or the  Custodian  on its  behalf)  that the  Interim


                                     - 53 -
<PAGE>

Servicing  Period has  terminated  or an Event of Default  has  occurred  and is
continuing hereunder,  it shall deposit all Income with respect to the Purchased
Assets in the account specified in Section 5.

            (e) Upon the earlier to occur of (i) the  termination of the Interim
Servicing  Period or (ii) the occurrence and  continuance of an Event of Default
or (iii)  the  failure  of the  Interim  Servicer  or any  sub-servicer  to meet
Accepted Servicing  Practices,  Buyer may, in its sole discretion,  (i) sell its
right to the Purchased  Assets on a  servicing-released  basis or (ii) terminate
the  Interim  Servicer or any  Subservicer  or  sub-servicer  as servicer of the
Purchased  Assets with or without  cause,  in each case  without  payment of any
termination  fee, in which case Interim  Servicer will promptly,  within one (1)
Business Day, transfer servicing,  or cause servicing to be transferred,  to the
servicer designated by Buyer.

            (f) The  Interim  Servicer  shall  use one or more of the  following
types of accounts, in each case maintained at an institution that is independent
of and  unaffiliated  with Seller,  into which all sums  collected in respect of
Assets shall be deposited and maintained  (the "Buyer's  Account"):  (i) a trust
account  or  accounts  maintained  for the  benefit  of  Buyer  with  the  trust
department  of a federally  chartered  depository  institution  or trust company
acting in its fiduciary capacity or (ii) a trust account or accounts  maintained
for the  benefit  of  Buyer  with  the  trust  department  of a state  chartered
depository  institution  or trust company  acting in its fiduciary  capacity and
subject  to   regulations   regarding   fiduciary   funds  on  deposit   therein
substantially similar to 12 CFR ss. 9.10(b), or (iii) an account or accounts (a)
maintained with a depository institution the debt obligations of which are rated
by Standard & Poor's Ratings Group in one of its two highest  rating  categories
at the time of any deposit  therein or (b) the  deposits of which are insured by
the FDIC, to the limits  established by the FDIC, and the uninsured  deposits in
which are  otherwise  secured such that,  as evidenced by an opinion of counsel,
Buyer has a claim with respect to the funds in such account or a perfected first
security interest against any collateral securing such funds that is superior to
claims of any other  depositor or creditors of the depository  institution  with
which such account is maintained.

            (g) Interim Servicer shall provide to Buyer on the 15th calendar day
of each month,  (i) a  remittance  report with respect to all  Purchased  Assets
subject to any Transaction hereunder containing all of the information necessary
for Buyer to determine the Market Value of such Purchased  Assets,  and (ii) all
other reports  specified in the Interim  Servicing  Addendum  attached hereto as
Exhibit XI.

            (h) Each of the terms and  provisions  contained in Exhibit 9 to the
Purchase  Facility   (together  with  all  related   definitions  and  ancillary
provisions) are hereby incorporated by reference as if set forth herein in their
entirety;  provided,  that (i)  references  to  "Purchaser"  shall mean and be a
reference to the Buyer as defined herein,  (ii) references to "this  Agreement",
"herein", "hereunder", and words of similar import shall mean and be a reference
to this  Agreement,  (iii)  references  to "Mortgage  Loans" shall mean and be a
reference to Purchased Assets as defined herein, and (iv) references to Sections
in such  incorporated  Sections  shall be references to Sections of the Purchase
Facility,  provided that to the extent such  referenced


                                     - 54 -
<PAGE>

Sections are themselves incorporated in this Agreement by reference,  references
herein to such Sections shall be such Sections as they are incorporated.

26. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

            The parties acknowledge that they have been advised that in the case
of  Transactions  in  which  one  of  the  parties  is  an  "insured  depository
institution"  as that term is  defined  in  Section  1831 (a) of Title 12 of the
United States Code, as amended, funds held by the financial institution pursuant
to a  Transaction  hereunder  are not a deposit and therefore are not insured by
the Federal Deposit Insurance  Corporation,  the Savings  Association  Insurance
Fund or the Bank Insurance Fund, as applicable.

27. NETTING

            If  Buyer  and  Seller  are  "financial   institutions"  as  now  or
hereinafter  defined  in  Section  4402 of Title 12 of the  United  States  Code
("Section 4402") and any rules or regulations promulgated thereunder:

            (a) All  amounts to be paid or advanced by one party to or on behalf
of the other under this Agreement or any  Transaction  hereunder shall be deemed
to be  "payment  obligations"  and all amounts to be received by or on behalf of
one party from the other under this Agreement or any Transaction hereunder shall
be deemed to be "payment  entitlements"  within the meaning of Section 4402, and
this Agreement shall be deemed to be a "netting  contract" as defined in Section
4402.

            (b) The  payment  obligations  and the payment  entitlements  of the
parties hereto pursuant to this Agreement and any Transaction hereunder shall be
netted as follows. In the event that either party (the "Defaulting Party") shall
fail to honor any payment  obligation  under this  Agreement or any  Transaction
hereunder,  the other  party (the  "Nondefaulting  Party")  shall be entitled to
reduce the amount of any  payment to be made by the  Nondefaulting  Party to the
Defaulting  Party by the amount of the payment  obligation  that the  Defaulting
Party failed to honor.

28. CONFIDENTIALITY

            This  Agreement and its terms and contents are  proprietary to Buyer
and to Seller  and shall be held by Buyer and  Seller in strict  confidence  and
shall not be  disclosed  to any third  party  without  the  consent of the other
except for (i)  disclosure to such party's  attorneys or  accountants,  provided
that such attorneys and accountants  likewise agree to be bound by this covenant
of confidentiality or (ii) disclosure required by law, rule, regulation or order
of a court or other regulatory body.

29. COSTS, EXPENSES, TAXES AND INDEMNIFICATION

            (a)  The  Seller  agrees  to  pay  on  demand  (i)  all   reasonable
out-of-pocket   costs  and  expenses  of  the  Buyer  in  connection   with  the
preparation,  execution and delivery of this


                                     - 55 -
<PAGE>

Agreement, and the administration,  modification and amendment of this Agreement
(including,  without limitation, (A) all due diligence costs pursuant to Section
15   hereof,   collateral   review,   syndication,   transportation,   computer,
duplication,   appraisal,  audit,  insurance,  consultant,  search,  filing  and
recording fees and expenses and (B) the reasonable  fees and expenses of counsel
for the Buyer with respect  thereto with respect to advising the Buyer as to its
rights and  responsibilities,  or the perfection,  protection or preservation of
rights or interests, under this Agreement, with respect to negotiations with the
Seller or with other  creditors of the Seller  arising out of any Default or any
events or  circumstances  that may give rise to a Default  and with  respect  to
presenting claims in or otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors' rights generally and
any proceeding  ancillary thereto with respect to the Seller) and (ii) all costs
and expenses of the Buyer in connection  with the enforcement of this Agreement,
whether in any action, suit or litigation,  any bankruptcy,  insolvency or other
similar proceeding  affecting  creditors' rights generally  (including,  without
limitation,  the  reasonable  fees and  expenses  of counsel  for the Buyer with
respect thereto).

            (b) Seller shall  indemnify  Buyer and hold it harmless  against any
Losses  incurred by Buyer as a result of any failure by Seller to timely deliver
the Assets subject to such  Transaction,  which Losses shall be limited to costs
reasonably  incurred by Buyer by reason of the liquidation or  re-employment  of
funds  acquired  by Buyer to fund such  Transaction.  In  addition,  Buyer shall
undertake  to take  all  commercially  reasonable  steps  to  mitigate  Seller's
indemnity hereunder.

            (c) Without  limiting  any other  rights  which Buyer or Seller have
hereunder  or under  applicable  law,  and in  addition  to any other  indemnity
provided  hereunder,  (a) Seller hereby  agrees to hold Buyer  harmless from and
indemnify  Buyer and its respective  officers,  directors,  agents and employees
(each, an "Indemnified Party") any and all claims, damages, losses,  liabilities
and  expenses  from and  against  any and all Losses  incurred by or asserted or
awarded against any Indemnified Party directly arising out of, related to, or as
a result of this Agreement or any Transaction  involving  Assets,  including any
investigation, proceeding or preparation of any defense in connection therewith,
whether or not such  investigation,  litigation  or proceeding is brought by the
Seller,  its members,  or creditors or an Indemnified  Party or any  Indemnified
Party  is  otherwise  a  party  thereto  and  whether  or not  the  transactions
contemplated hereby are consummated,  and Seller will reimburse each Indemnified
Party as the same is  incurred  upon  receipt  by the  Seller  of  documentation
evidencing the same, excluding,  however,  Losses to the extent arising from the
gross  negligence or willful  misconduct on the part of Buyer.  Without limiting
the  generality  of the  foregoing,  Seller  agrees to pay on demand,  and shall
indemnify Buyer for Losses relating to or resulting from:

                  (i) any  representation  or  warranty  made by Seller  (or any
      Responsible  Officer or authorized agent of Seller) under or in connection
      with  this  Agreement,  any  periodic  report  required  to  be  furnished
      hereunder  or any  other  information  or  document  delivered  by  Seller
      pursuant hereto,  which shall have been false or incorrect in any material
      respect when made or deemed made, or any other Breach hereunder;


                                     - 56 -
<PAGE>

                  (ii) the failure by Seller to comply with any applicable  law,
      rule or regulation with respect to any Transaction;

                  (iii) violations of any environmental  law, rule or regulation
      or any consumer credit laws, including without limitation ERISA, the Truth
      in Lending Act and/or the Real Estate Settlement Procedures Act; or

                  (iv) the  failure  by  Seller  (if so  requested  by Buyer) to
      execute and properly file, or any delay in executing and properly  filing,
      financing  statements or other similar  instruments or documents under the
      Uniform Commercial Code of any applicable jurisdiction or other applicable
      laws with respect to the Purchased Assets.

                  (v) the actual or alleged  presence of Hazardous  Materials on
      any Mortgaged Property or any Environmental  Action relating in any way to
      any Mortgaged  Property,  except to the extent such claim,  damage,  loss,
      liability  or expense is found in a final,  non-appealable  judgment  by a
      court of competent  jurisdiction  to have resulted  from such  Indemnified
      Party's gross negligence or willful misconduct.

            (d) In any suit, proceeding or action brought by Buyer in connection
with any  Purchased  Asset  for any sum  owing  thereunder,  or to  enforce  any
provisions of any Purchased  Asset,  Seller will save,  indemnify and hold Buyer
harmless from and against all expense,  loss or damage suffered by reason of any
defense, set-off, counterclaim,  recoupment or reduction or liability whatsoever
of the account debtor or obligor  thereunder,  arising out of a breach by Seller
of any obligation thereunder or arising out of any other agreement, Indebtedness
or liability at any time owing to or in favor of such account  debtor or obligor
or its successors from Seller.  Seller hereby  acknowledges that, the obligation
of Seller hereunder is a recourse obligation of Seller.

            (e) All payments  made by the Seller under this  Agreement  shall be
made free and clear of, and without  deduction or withholding  for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges,  fees,  or  other  assessments,  deductions  or  withholdings,  now  or
hereafter imposed, levied,  collected,  withheld or assessed by any Governmental
Authority,  including without limitation,  excise,  property, sale and franchise
taxes  (including  in each such  case,  any  interest,  penalties  or  additions
attributable to or imposes on or with respect to any such  assessment) (all such
assessments, "Non-Excluded Taxes"), but excluding net income taxes and franchise
taxes  imposed in lieu of net income taxes imposed on the Buyer as a result of a
present  or former  connection  between  the Buyer and the  jurisdiction  of the
Governmental  Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Buyer having executed,  delivered or performed its obligations or received a
payment under, or enforced, this Agreement).  If any such Non-Excluded Taxes are
required to be withheld  from any amounts  payable to the Buyer  hereunder,  the
amounts so payable to the Buyer shall be  increased  to the extent  necessary to
yield to the Buyer,  based on Buyer's  effective tax rate in effect from time to
time,  (after  payment of all  Non-Excluded  Taxes)  interest  or any such other
amounts  payable  hereunder  at the rates or in the  amounts  specified  in this
Agreement;  provided, however, that the Seller shall not


                                     - 57 -
<PAGE>

be  required  to  increase  any such  amounts  payable  to the Buyer that is not
organized  under the laws of the United  States of America or a state thereof if
the  Buyer  fails to  comply  with the  requirements  of  clause  (f)(i) of this
Section.  Whenever any Non-Excluded Taxes are payable by the Seller, as promptly
as possible thereafter the Seller shall send to the Buyer, as the case may be, a
certified copy of an original  official  receipt  received by the Seller showing
payment thereof.  If the Seller fails to pay any Non-Excluded  Taxes when due to
the  appropriate  taxing  authority  or fails to remit to the Buyer the required
receipts or other required documentary evidence,  the Seller shall indemnify the
Buyer for any incremental  taxes,  interest or penalties that may become payable
by the Buyer as a result of any such  failure.  The  agreements  in this Section
shall survive the  termination  of this Agreement and the payment of all amounts
payable hereunder.

            (g) Without  prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
Section shall survive the payment in full of the Repurchase  Price and all other
amounts  payable  hereunder  and delivery of the  Purchased  Assets by the Buyer
against full payment therefor.

30. SET-OFF

            In  addition to any rights and  remedies  of Buyer  provided by this
Agreement  and by law,  Buyer  shall have the  right,  without  prior  notice to
Seller, any such notice being expressly waived by Seller to the extent permitted
by applicable law, upon any amount becoming due and payable by Seller under this
Agreement,  the Existing Repo Facility,  the Purchase  Facility,  the Engagement
Letter or the Master Facilities  Agreement  (whether at the stated maturity,  by
acceleration  or  otherwise) to set-off and  appropriate  and apply against such
amount any and all deposits (general or special, time or demand,  provisional or
final), in any currency,  and any other credits,  indebtedness or claims, in any
currency,  in each case  whether  direct or  indirect,  absolute or  contingent,
matured  or  unmatured,  at any time  held or  owing  by Buyer or any  Affiliate
thereof to or for the credit or the account of Seller.  Buyer agrees promptly to
notify  Seller after any such set-off and  application  made by Buyer;  provided
that the  failure to give such  notice  shall not affect  the  validity  of such
set-off and application.

31. MISCELLANEOUS

            (a) Time is of the essence under this Agreement and all Transactions
and all  references  to a time shall mean New York time in effect on the date of
the action unless otherwise expressly stated in this Agreement.

            (b) Buyer shall be  authorized  to accept  orders and take any other
action  affecting  any accounts of Seller in response to  instructions  given in
writing  or orally  by  telephone  or  otherwise  by any  person  with  apparent
authority to act on behalf of Seller, and Seller shall indemnify Buyer,  defend,
and hold Buyer harmless from and against any and all Losses arising out of or in
connection  with any  action  taken by Buyer in  response  to such  instructions
received or reasonably believed to have been received from Seller.


                                     - 58 -
<PAGE>

            (c) If there is any conflict  between the terms of this Agreement or
any Transaction  entered into hereunder and the Custodial Agreement or any other
Facility Document, this Agreement shall prevail.


                                     - 59 -
<PAGE>

            (d) This Agreement may be executed in counterparts, each of which so
executed shall be deemed to be an original,  but all of such counterparts  shall
together constitute but one and the same instrument.

            (f) The headings in this Agreement are for  convenience of reference
only and shall not affect the interpretation or construction of this Agreement.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]


                                     - 60 -
<PAGE>

            IN WITNESS WHEREOF,  the parties have entered into this Agreement as
of the date set forth above.

                                      GREENWICH CAPITAL FINANCIAL
                                      PRODUCTS, INC.,
                                      Buyer

                                      By:
                                          ---------------------------------
                                          Name:
                                          Title:

                                      ADDRESS FOR NOTICES:
                                      600 Steamboat Road
                                      Greenwich, Connecticut 06830
                                      Telephone: (203) 625-7921
                                      Facsimile: (203) 618-2132

                                      With a copy to:
                                      Attention: General Counsel
                                      Telephone: (203) 625-2700
                                      Facsimile: (203) ____________


                                      CONTIFINANCIAL CORPORATION,
                                      Seller


                                      By: /s/ Alan Fishman
                                          ---------------------------------
                                          Name: Alan Fishman
                                          Title:


                                      By:  /s/ Frank Baier
                                          ---------------------------------
                                          Name: Frank Baier
                                          Title:


                                      ADDRESS FOR NOTICES:
                                      277 Park Avenue
                                      New York, New York 10172
                                      Telephone: (212) 207-2808
                                      Facsimile: (212) 207-5975


                                     - 61 -
<PAGE>

                                      With a copy to:
                                      Attention:  Alan Langus, General Counsel
                                      Telephone: (212) 207-2822
                                      Facsimile: (212) 207-2937

                                      CONTIMORTGAGE CORPORATION,
                                      Interim Servicer


                                      By: /s/ Robert J. Babjak
                                          ---------------------------------
                                          Name: Robert J. Babjak
                                          Title:


                                      By:  /s/  Margaret M. Curry
                                          ---------------------------------
                                          Name: Margaret M. Curry
                                          Title:


                                      ADDRESS FOR NOTICES:
                                      338 South Warminster Rd
                                      Hatboro, PA 19404-3430
                                      Telephone: (212) 207-2808
                                      Facsimile: (212) 207-5975

                                      With a copy to:
                                      Attention:  Mary L. Gibbons, Chief Counsel
                                      Telephone: (215) 347-3404
                                      Facsimile: (215) 347-3400


                                     - 62 -
<PAGE>

                                    SCHEDULES
                                    ---------


SCHEDULE 1      SELLER'S MATERIAL SUBSIDIARIES

SCHEDULE 2      FILING JURISDICTIONS

SCHEDULE 3      INDEBTEDNESS DOCUMENTS

SCHEDULE 4      FALLOUT ASSETS

                                    EXHIBITS
                                    --------

EXHIBIT I       Form of Purchase Request including the Eligible Asset Schedule

EXHIBIT II      Interim Servicing Notification Letter

EXHIBIT III     Form of Power of Attorney

EXHIBIT IV      Letter of Instruction to Master Servicer and Servicers

EXHIBIT V       Representations and Warranties Regarding Mortgage Loans

EXHIBIT V(A)    Representations and Warranties Regarding Empire Mortgage Loans

EXHIBIT VI      Seller/Affiliate Agreement

EXHIBIT VII     Assignment and Conveyance Agreement

EXHIBIT VIII    Opinion of Seller's Counsel

EXHIBIT IX      Underwriting Guidelines

EXHIBIT IX(A)   Modifications to Underwriting Guidelines

EXHIBIT X       Asset Tape Fields

EXHIBIT XI      Interim Servicing Addendum


                                     - 63 -
<PAGE>

                                   Schedule 1
                                   ----------

                         Seller's Material Subsidiaries
                         ------------------------------

                            ContiMortgage Corporation


                              ContiWest Corporation


                           ContiTrade Services L.L.C.


                         California Lending Group, Inc.


       [SPC that owns Excess Spread Receivable to be Pledged to Greenwich]


      [Affiliates of Conti that are counterparties to swaps with Greenwich]


                                     - 64 -
<PAGE>

                                   Schedule 2
                                   ----------

                              Filing Jurisdictions
                              --------------------


                   Secretary of State of the State of New York


                     Secretary of County of New York County


                 Secretary of State of the State of Pennsylvania


                    Secretary of County of Montgomery County


                                     - 65 -
<PAGE>

                                   Schedule 3
                                   ----------

                             Indebtedness Documents
                             ----------------------


Indenture,  dated  as  of  August  15,  1996,  relating  to  the  ContiFinancial
Corporation 8 3/8% Senior Notes Due 2003, as amended,  supplemented or otherwise
modified from time to time

Credit Agreement,  dated as of January 7, 1997, among ContiFinancial Corporation
and Credit Suisse First Boston, as amended,  supplemented or otherwise  modified
from time to time

Indenture, dated as of March 1, 1997, relating to the ContiFinancial Corporation
7-1/2% Senior Notes Due 2002,  as amended,  supplemented  or otherwise  modified
from time to time

Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of
September 9, 1997, among ContiFinancial Corporation, Credit Suisse First Boston,
New York Branch and Dresdner Bank AG, New York Branch, as amended,  supplemented
or otherwise modified from time to time

Indenture,  dated  March 4, 1998,  relating  to certain  securities  issuable by
ContiFinancial Corporation, as amended,  supplemented or otherwise modified from
time to time


                                     - 66 -
<PAGE>

                                   Schedule 4


                                 Fallout Assets


                                                               Collateral Amount
Mortgage Loan Category                     Time Period              Percentage
----------------------                     -----------              ----------

Delinquent Loan                           30 - 59 days                   90%
                                          60 - 89 days                   80%
                                          90 - 119 days                  50%
                                            120+ days                    0%

Sublimit Exception Loan                    1st 60 days                   90%
                                          Next 30 days                   85%
                                           Thereafter                    0%

Exception Loan in excess                   1st 60 days                   80%
of Exception Limit                        Next 30 days                   75%
                                           Thereafter                    0%

Repurchased Loan                1st 60 days following repurchase         70%
                                          Next 30 days                   60%
                                           Thereafter                    0%

Category 4 Loan                            1st 60 days                   70%
                                          Next 30 days                   60%
                                           Thereafter                    0%

As used herein, the following terms shall have the following meanings:

"Category 4 Loan" means a Mortgage Loan that would qualify as an Exception  Loan
except  that it has an  implied  purchase  price of less than 80% of the  unpaid
principal balance thereof.

"Delinquent Loan" means a Mortgage Loan which is more than 29 days Delinquent.

"Sublimit Exception Loan" means a Mortgage Loan the Collateral Amount Percentage
of which would be zero as a result of one or more of the  sublimits set forth in
the  definition  of the  term  "Collateral  Amount  Percentage",  except  that a
Mortgage  Loan the  Collateral  Amount  Percentage  of which  would be zero as a
result  of  paragraph  (9) of the  definition  of the  term  "Collateral  Amount
Percentage" shall not qualify as a Sublimit Exception Loan.

"Exception  Limit" shall have the meaning for such term that is set forth in the
Purchase Facility.

"Exception  Loan"  shall have the meaning for such term that is set forth in the
Purchase Facility.


                                     - 67 -
<PAGE>

"Repurchased  Loan" means a Mortgage Loan (a) which has been  repurchased by the
Seller (i) from the Buyer under the terms of the Purchase  Facility or (ii) from
a  securitization  trust in accordance  with  Seller's  obligation to repurchase
certain  securitized  mortgage  loans,  and (b) which has a Market Value greater
than 50% of the Par Amount of such Mortgage Loan.


                                     - 68 -
<PAGE>

                                                                       EXHIBIT I

                            Form of Purchase Request
                                                                        [Date]

Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut  06830

Ladies and Gentlemen:

            Pursuant  to  Section  3(a)  of  the  Master  Repurchase   Agreement
Governing  Purchases  and  Sale of  Assets  dated  as of  August  9,  1999  (the
"Agreement") between you ("Buyer") and us ("Seller"),  Seller hereby irrevocably
requests that Buyer enter into a repurchase  transaction involving the following
Eligible Assets, to be governed by the Agreement:

Buyer:                                Greenwich Capital Financial Products, Inc.

Seller:                               ContiFinancial Corporation

Type of [Eligible] [Fallout] Assets:

Specific Assets to be Sold:           Attached on Asset Schedule

Requested Purchase Date:

Par Amount (UPB):


                                     Requested by
                                     CONTIFINANCIAL CORPORATION


                                     By:
                                         --------------------------------
                                         Name:
                                         Title:


                                     By:
                                         --------------------------------
                                         Name:
                                         Title:


                                     Exh I.1
<PAGE>

                                     GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.


                                     By:
                                         --------------------------------
                                         Name:
                                         Title:


                                     Exh I.2
<PAGE>

                                                                       EXHIBIT I

                                 Asset Schedule
                                 --------------

[Note:  If any Asset to be sold to the Buyer  constitutes a Fallout  Asset,  the
Seller  shall list on this  Schedule the reasons why such Asset does not qualify
as an Eligible Asset]

(1)   the Seller's Mortgage Loan identifying number;
(2)   the Mortgagor's first andlast name;
(3)   the street address of the Mortgaged  Property  including the state and zip
      code;
(4)   a code indicating whether the Mortgaged Property is owner-occupied;
(5)   the type of residential dwelling constituting the Mortgaged Property;
(6)   the original months to maturity;
(7)   the  original  date of the  Mortgage  Loan  and the  remaining  months  to
      maturity  from  the  Purchase  Date,  based on the  original  amortization
      schedule;
(8)   the Loan-to-Value Ratio at origination;
(9)   the Mortgage  Interest Rate in effect  immediately  following the Purchase
      Date;
(10)  the date on which the first Monthly Payment was due on the Mortgage Loan;
(11)  the stated maturity date;
(12)  the amount of the Monthly Payment at origination;
(13)  with respect to each  adjustable  rate  Mortgage  Loan,  the amount of the
      Monthly Payment as of the Purchase Date;
(14)  the last due date on which a Monthly  Payment was actually  applied to the
      unpaid stated principal balance;
(15)  the original principal amount of the Mortgage Loan;
(16)  the  stated  principal  balance  of the  Mortgage  Loan as of the close of
      business on the Purchase Date;
(17)  with respect to each adjustable  rate Mortgage Loan, the first  adjustment
      date;
(18)  with respect to each adjustable rate Mortgage Loan, the gross margin;
(19)  a code  indicating  the  purpose of the loan  (i.e.,  purchase  financing,
      refinancing);
(20)  with respect to each adjustable  rate Mortgage Loan, the maximum  mortgage
      interest rate under the terms of the Mortgage Note;
(21)  with respect to each adjustable  rate Mortgage Loan, the minimum  mortgage
      interest rate under the terms of the Mortgage Note;
(22)  the mortgage interest rate at origination;
(23)  with respect to each adjustable rate Mortgage Loan, the periodic rate cap;
(24)  with respect to each adjustable  rate Mortgage Loan, the first  adjustment
      date  immediately  following the Purchase Date;
(25)  with respect to each adjustable rate Mortgage Loan, the index;
(26)  the date on which the first  Monthly  Payment was due on the Mortgage Loan
      and, if such date is not consistent with the due date currently in effect,
      such due date;
(27)  a code indicating whether the Mortgage Loan is an adjustable rate Mortgage
      Loan or a fixed rate Mortgage Loan;
(28)  a code  indicating the  documentation  style (i.e.,  full,  alternative or
      reduced);


                                    Exh I.3
<PAGE>

(29)  a code  indicating  if the Mortgage  Loan is subject to the  provisions of
      HOEPA;
(30)  the Appraised Value of the Mortgaged Property;
(31)  the sale price of the Mortgaged Property, if applicable;
(32)  a code indicating whether the Mortgage is a First Lien or Second Lien;
(33)  the Mortgagor's FICO score (to the extent a FICO score is available);
(34)  a code indicating whether the Mortgage Loan is a retention mortgage loan;
(35)  a code  indicating  if interest on such  Mortgage  Loan is calculated on a
      30/360 basis;

(36)  the Mortgagor's social security number;
(37)  a code identifying origination source;
(38)  a code indicating if the Mortgage Loan is a balloon Mortgage Loan;
(39)  a code indicating the Mortgage Note class (borrower grade);
(40)  with  respect  to each  adjustable  rate  Mortgage  Loan,  the  adjustment
      frequency;
(41)  the  ratio of  original  principal  balance  of the  Mortgage  Loan to the
      Mortgagor's income;
(42)  a code indicating the prepayment penalty, if any; and
(43)  with respect to any Second Lien Mortgage Loan, the  outstanding  principal
      balance of the First Lien on the date of  origination  of such Second Lien
      Mortgage Loan.

With respect to the Asset  Schedules in the aggregate,  the Asset Schedule shall
set forth the following  information,  as of the related  Purchase Date: (1) the
number of Mortgage Loans;  (2) the stated  principal  balance (or Par Amount) of
the Mortgage  Loans;  (3) the weighted  average  mortgage  interest  rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.


                                    Exh I.4
<PAGE>

                                                                      EXHIBIT II

                      INTERIM SERVICING NOTIFICATION LETTER

                         INTERIM SERVICING NOTIFICATION

                           CONTIFINANCIAL CORPORATION
                                 277 Park Avenue
                            New York, New York 10172

                                                                  August 9, 1999

To the Parties Receiving this Notification

Ladies and Gentlemen:

                  Reference  is  made  to (i) the  Master  Repurchase  Agreement
Governing Purchases and Sales of Assets ("Master Repurchase Agreement") dated as
of August 9, 1999, between Greenwich Capital Financial Products,  Inc. ("Buyer")
and  ContiFinancial   Corporation   ("Seller").   This  letter  of  notification
("Notification")  confirms the  Seller's  acknowledgment  of Buyer's  rights and
interest as to the matters set forth  below.  Capitalized  terms used herein but
not  defined  shall  have the  meaning  ascribed  to such  terms  in the  Master
Repurchase Agreement.

1.    The Seller hereby  acknowledges  and agrees that the Buyer is the owner of
      the Mortgage  Loans set forth on Exhibit A attached  hereto (the "Mortgage
      Loans") and that in the event that such interest is  recharacterized  as a
      loan,  the Buyer has a  perfected  first  lien  priority  interest  in the
      Mortgage Loans.

2.    Upon receipt by you of this  Notification,  signed by Seller (which may be
      in the form of a photocopy)  certified by Buyer that the Interim Servicing
      Period has  terminated or an Event of Default has occurred,  (a) you shall
      make all remittances with respect to the Mortgage Loans in accordance with
      the  instructions  of the  Buyer  and (b) in no event  shall you remit any
      funds in connection with the Mortgage Loans to the Seller.

3.    You shall  continue to service the Mortgage  Loans serviced by you for the
      benefit  of the  Buyer  and its  successors  and  assigns  (as  owner)  in
      accordance with the terms of the related servicing agreement.

4.    This  Notification  may not be withdrawn,  revoked,  nullified or modified
      without the written consent of the Buyer.


                                    Exh II.1
<PAGE>

5.    This  Notification may be assigned in whole or in part by Buyer; and shall
      inure to the  benefit  of the Buyer and their  respective  successors  and
      assigns.


                                          Very truly yours,

                                          CONTIFINANCIAL CORPORATION


                                          By:
                                              -------------------------------
                                          Name:
                                              -------------------------------
                                          Title:
                                              -------------------------------

            THE  UNDERSIGNED  HEREBY  CERTIFIES  THAT (i) THE INTERIM  SERVICING
PERIOD  HAS  TERMINATED  OR (ii) AN EVENT OF  DEFAULT  HAS  OCCURRED  AND HEREBY
INSTRUCTS  YOU TO FOLLOW THE  INSTRUCTIONS  SET FORTH  HEREIN IN ADDITION TO ANY
OTHER INSTRUCTIONS OF THE UNDERSIGNED HEREAFTER:


GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

By:
    -------------------------------
Name:
    -------------------------------
Title:
    -------------------------------

                  Please acknowledge receipt and acceptance of the terms of this
Notification  by  signing  below  and  returning  a copy  to  Greenwich  Capital
Financial Products, Inc.

By:
    -------------------------------
Name:
    -------------------------------
Title:
    -------------------------------



                                    Exh II.2

<PAGE>

                                                                     EXHIBIT III

                                    Exh III.2

                            Form of Power of Attorney

Notice:  The powers  granted by this document are broad and  sweeping.  They are
defined in New York  General  Obligations  Law,  Article  5, Title 15,  sections
5-1502A through 51503,  which  expressly  permits the use of any other different
form of power of attorney desired by the parties concerned.

Know All Men by These Presents, which are intended to constitute a GENERAL POWER
OF ATTORNEY pursuant to Article 5, Title 15 of the New York General  Obligations
Law: That ContiFinancial  Corporation ("Seller"),  does hereby appoint Greenwich
Capital Financial  Products,  Inc.  ("Buyer"),  its  attorney-in-fact  to act in
Seller's name,  place and stead in any way which Seller could do with respect to
(i) completing  endorsements  and recording  instruments  relating to the Assets
purchased by Buyer pursuant to a Master Repurchase Agreement Governing Purchases
and Sales of Assets  dated as of August 9, 1999  between  Seller  and Buyer (the
"Repurchase  Agreement")  and to take such other  steps as may be  necessary  or
desirable to enforce Buyer's rights under the Repurchase Agreement,  and against
such Assets,  the related Asset Files and the Servicing  Records,  to the extent
that Seller is permitted by law to act through an agent.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER,  SELLER HEREBY AGREES THAT ANY THIRD
PARTY  RECEIVING A DULY  EXECUTED COPY OR FACSIMILE OF THIS  INSTRUMENT  MAY ACT
HEREUNDER,  AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH  REVOCATION
OR TERMINATION  SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY,  AND SELLER ON ITS
OWN BEHALF AND ON BEHALF OF SELLER'S LEGAL  REPRESENTATIVES AND ASSIGNS,  HEREBY
AGREES TO INDEMNIFY  AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY
AND ALL CLAIMS THAT MAY ARISE  AGAINST  SUCH THIRD PARTY BY REASON OF SUCH THIRD
PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.


                                   Exh III.1
<PAGE>

            IN WITNESS  WHEREOF,  Seller has caused this Power of Attorney to be
executed and Seller's seal to be affixed this _____ day of __________, 1999.


                                     CONTIFINANCIAL CORPORATION


                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                   Exh III.2
<PAGE>

                                                                      EXHIBIT IV

           Letter of Instructions to Master Servicer and Subservicers

[Servicer]

Ladies/Gentlemen:

            On August 9, 1999,  ContiFinancial  Corporation  ("Seller")  sold to
Greenwich  Capital  Financial  Products,  Inc.  ("Buyer") all of Seller's right,
title and  interest  in and to the assets  identified  on Appendix A attached to
this letter and made a part hereof (the  "Assets").  Accordingly,  Seller hereby
unconditionally and irrevocably  instructs you to pay to Buyer,  pursuant to the
terms of our existing servicing arrangements, any and all monies received by you
on or after __________, 199__ which would have been payable from time to time by
you to  Seller  on  account  of or  otherwise  in  connection  with the  Assets,
including,  without  limitation,  any  and  all  principal,   interest,  partial
prepayments,  prepayments in full,  penalties,  advance  payments,  or expenses;
provided,  however,  that any such  monies  representing  scheduled  payments of
principal of or interest on such Assets due prior to __________,  199__ shall be
paid to Seller.

            All such  monies  should be paid by you to the order of Buyer in the
manner  and on the date such  monies  would  have been  payable  to  Seller,  as
follows:

            ABA #__________ for the account of Greenwich Capital Financial
            Products, Inc.
            Acct. #__________
            Attn.: __________

            Seller  further  instructs  you that all rights and powers of Seller
under the existing  servicing  arrangements with respect to the Assets have been
transferred  to Buyer  and that  Buyer  has the sole  right as the  owner of the
Assets to direct your actions under such servicing  arrangements with respect to
the Assets and to exercise such rights and powers.

                                     Very truly yours,

                                     CONTIFINANCIAL CORPORATION


                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                    Exh IV.1
<PAGE>

                                                                       EXHIBIT V

                         Representations and Warranties
                            Regarding Mortgage Loans


Reference is hereby made to the  Purchase  Facility for a statement of the terms
thereof.  All terms used in this  Exhibit V which are  defined  in the  Purchase
Facility and which are not otherwise  defined in this  Agreement  shall have the
same meanings herein as set forth therein.


Seller shall be deemed to make the following representations and warranties (and
such  additional  representations  and warranties set forth in the  Confirmation
with respect thereto) to the Buyer with respect to each Purchased Asset which is
a residential Mortgage Loan sold in a Transaction  hereunder,  as of the related
Purchase  Date and as of each day such  Transaction  is in effect  and except as
shall  be  specifically  disclosed  in the  schedule  attached  to the  Purchase
Request.  With respect to any representations and warranties made to the best of
Seller's  knowledge,  to  Seller's  knowledge  or in  reliance  on or  based  on
information,  in the event that it is  discovered  that the  circumstances  with
respect  to the  related  Mortgage  Loan are not  accurately  reflected  in such
representation  and  warranty  notwithstanding  the actual  knowledge or lack of
knowledge of Seller, then, notwithstanding that such representation and warranty
is made to the best of Seller's knowledge,  to Seller's knowledge or in reliance
on or based on information,  the Market Value of such Mortgage Loans may, in the
Buyer's sole good faith  discretion,  be reduced to zero. It is  understood  and
agreed  that  the   representations  and  warranties  set  forth  in  the  Asset
Representations  and the  Confirmation,  if any,  shall survive  delivery of the
Assets to Buyer or its designee (including the Custodian).

1.    Mortgage  Loans as  Described.  The  information  set  forth in the  Asset
      Schedule with respect to the Mortgage Loan is complete, true, complete and
      correct in all material respects.

2.    Payments  Current.  On the applicable  Purchase Date, and all other times,
      all payments  required to be made for the Mortgage Loan under the terms of
      the Mortgage Note have been made and credited, provided that such Mortgage
      Loan may be Delinquent for no more than 29 days.

3.    No Outstanding Charges.  There are no defaults in complying with the terms
      of the Mortgage  securing the Mortgage Loan,  and all taxes,  governmental
      assessments,  insurance  premiums,  water,  sewer and  municipal  charges,
      leasehold  payments or ground rents which previously  became due and owing
      have been paid,  or an escrow of funds has been  established  in an amount
      sufficient  to pay for every such item which is  delinquent  and which has
      been  assessed but is not yet due and payable.  Neither the Seller nor the
      Qualified  Originator from which the Seller acquired the Mortgage Loan has
      advanced funds, or induced, solicited or knowingly received any advance of
      funds by a party other than the Mortgagor, directly or indirectly, for the
      payment  of any  amount  required  under

<PAGE>

      the  Mortgage  Loan,  except for  interest  accruing  from the date of the
      Mortgage  Note or date of  disbursement  of the  proceeds of the  Mortgage
      Loan, whichever is earlier, to the day which precedes by one (1) month the
      due date of the first installment of principal and interest thereunder.

4.    Original  Terms  Unmodified.  The terms of the Mortgage  Note and Mortgage
      have not been impaired,  waived,  altered or modified in any respect, from
      the date of  origination;  except by a written  instrument  which has been
      recorded,  if necessary to protect the  interests of the Buyer,  and which
      has been delivered to the Buyer or its designee and the terms of which are
      reflected  in the  Asset  Schedule.  The  substance  of any  such  waiver,
      alteration or modification has been approved by the title insurer,  to the
      extent  required,  and its terms are reflected on the Asset  Schedule.  No
      Mortgagor in respect of the Mortgage Loan has been  released,  in whole or
      in part, except in connection with an assumption agreement approved by the
      title insurer, to the extent required by such policy, and which assumption
      agreement is part of the Asset File delivered to the Buyer or its designee
      and the terms of which are reflected in the Asset Schedule.

5.    No Defenses.  The Mortgage Loan is not subject to any right of rescission,
      set-off,  counterclaim  or defense,  nor will the  operation of any of the
      terms of the Mortgage Note or the  Mortgage,  or the exercise of any right
      thereunder, render either the Mortgage Note or the Mortgage unenforceable,
      in whole or in part and no such right of rescission, set-off, counterclaim
      or defense has been  asserted  with respect  thereto,  and no Mortgagor in
      respect  of the  Mortgage  Loan  was a  debtor  in any  state  or  Federal
      bankruptcy  or  insolvency  proceeding  at the time the Mortgage  Loan was
      originated.  The Seller has no  knowledge  nor has it received  any notice
      that any  Mortgagor  in  respect of the  Mortgage  Loan is a debtor in any
      state or Federal bankruptcy or insolvency proceeding.

6.    Hazard  Insurance.  A  hazard  insurance  policy  covering  the  Mortgaged
      Property in an amount not less than the amount of the Mortgage Loan,  plus
      any senior liens, is in full force.

7.    Compliance with Applicable  Laws. Any and all requirements of any Federal,
      state or local law including, without limitation, usury, truth-in-lending,
      real estate  settlement  procedures,  consumer  credit  protection,  equal
      credit opportunity or disclosure laws applicable to the Mortgage Loan have
      been  complied  with by the  Qualified  Originator  and the Seller and the
      consummation by the Seller of the  transactions  contemplated  hereby will
      not involve the violation of any such laws or regulations.

8.    No  Satisfaction  of  Mortgage.  The  Mortgage  has  not  been  satisfied,
      canceled,  subordinated  (other than, if a Second Lien  Mortgage  Loan, as
      expressly  set forth herein) or  rescinded,  in whole or in part,  and the
      Mortgaged Property has not been released from the lien of the Mortgage, in
      whole or in part, nor has any  instrument  been executed that would effect
      any such  release,  cancellation,  subordination  (other than, if a Second
      Lien Mortgage Loan, in connection with the first lien  referenced  herein)
      or rescission.  The Seller has not waived the performance by the Mortgagor
      of any action,  if the  Mortgagor's

<PAGE>

      failure to perform  such  action  would cause the  Mortgage  Loan to be in
      default,  nor has the Seller waived any default  resulting from any action
      or inaction by the Mortgagor.

9.    Location and Type of Mortgaged  Property.  The Mortgaged Property consists
      of a  single  parcel  of  real  property  with a  detached  single  family
      residence  erected  thereon,  or a two-  to  four-family  dwelling,  or an
      individual  condominium  unit in a  low-rise  condominium  project,  or an
      individual unit in a planned unit development or a de minimis planned unit
      development,  provided, however, that no residence or dwelling is a mobile
      home or a  manufactured  dwelling.  Except with  respect to the  Mortgaged
      Property  securing a  Mixed-Use  Mortgage  Loan,  which may have a partial
      commercial  use,  no  portion  of  the  Mortgaged  Property  is  used  for
      commercial purposes.

10.   Valid Lien. The Mortgage is a valid, subsisting, enforceable and perfected
      (A)  first  lien or  second  lien on the  Mortgaged  ----------  Property,
      including all buildings on the  Mortgaged  Property and all  installations
      and mechanical, electrical, plumbing, heating and air conditioning systems
      located in or annexed to such  buildings,  and all additions,  alterations
      and replacements made at any time with respect to the foregoing.  The lien
      of the Mortgage is subject  only to (i) the lien of current real  property
      taxes and assessments not yet due and payable; (ii) covenants,  conditions
      and restrictions, rights of way, easements and other matters of the public
      record as of the date of recording  acceptable to prudent mortgage lending
      institutions  generally and specifically referred to in the lender's title
      insurance  policy delivered to the originator of the Mortgage Loan and (a)
      referred  to or  otherwise  considered  in  the  appraisal  made  for  the
      originator of the Mortgage  Loan or (b) which do not adversely  affect the
      Appraised  Value of the  Mortgaged  Property set forth in such  appraisal;
      (iii) other matters to which like properties are commonly subject which do
      not materially  interfere with the benefits of the security intended to be
      provided by the Mortgage or the use, enjoyment,  value or marketability of
      the  related  Mortgaged  Property;  and (iv) in the case of a Second  Lien
      Mortgage Loan, a first lien on the Mortgaged Property.

11.   Security Agreement. Any security agreement, chattel mortgage or equivalent
      document  related to and  delivered in  connection  with the Mortgage Loan
      establishes and creates a valid, subsisting and enforceable (A) first lien
      and first  priority  security  interest with respect to each Mortgage Loan
      which is indicated to be a First Lien  Mortgage  Loan (as indicated on the
      Asset Tape), or (B) second lien and second priority security interest with
      respect to each  Mortgage Loan which is indicated by Seller to be a Second
      Lien Mortgage  Loan (as  reflected on the Asset Tape),  in either case, on
      the property  described  therein and Seller has full right to sell, pledge
      and  assign  the same to Buyer.  To the best of  Seller's  knowledge,  the
      Mortgaged  Property was not, as of the date of origination of the Mortgage
      Loan,  subject to a mortgage,  deed of trust, deed to secure debt or other
      security  instrument  creating  a  lien  subordinate  to the  lien  of the
      Mortgage.

12.   Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any
      other  agreement  executed and delivered by a Mortgagor or  guarantor,  if
      applicable,  in connection  with a Mortgage Loan are genuine,  and each is
      the legal, valid and binding

<PAGE>

      obligation of the maker thereof  enforceable in accordance with its terms,
      except only as such enforcement may be limited by bankruptcy,  insolvency,
      reorganization, moratorium or other similar laws affecting the enforcement
      of  creditors'  rights  generally  and by  general  principles  of  equity
      (whether  considered in a proceeding  or action in equity or at law).  All
      parties to the  Mortgage  Note,  the  Mortgage  and any other such related
      agreement  had  legal  capacity  to enter  into the  Mortgage  Loan and to
      execute and deliver the Mortgage Note, the Mortgage and any such agreement
      and to  convey  the  estate  therein  purported  to be  conveyed,  and the
      Mortgage Note, the Mortgage and any other such related agreement have been
      duly and  properly  executed by such  related  parties.  No fraud,  error,
      omission, misrepresentation, negligence or similar occurrence with respect
      to a Mortgage  Loan has taken place on the part of any Person,  including,
      without  limitation,   the  Mortgagor,   any  appraiser,  any  builder  or
      developer,  or any other party involved in the origination of the Mortgage
      Loan.  The Seller  has  reviewed  all of the  documents  constituting  the
      Servicing File and has made such  inquiries as it deems  necessary to make
      and confirm the accuracy of the representations set forth herein.

13.   First Lien  Consent.  With respect to each Mortgage Loan which is a Second
      Lien  Mortgage  Loan,  (i) if the related first lien provides for negative
      amortization,  the LTV was calculated at the maximum  principal balance of
      such  first lien that  could  result  upon  application  of such  negative
      amortization  feature, and (ii) either no consent for the Mortgage Loan is
      required by the holder of the first lien or such consent has been obtained
      and is contained in the Asset File.

14.   Full  Disbursement of Proceeds.  The Mortgage Loan has been closed and the
      proceeds of the Mortgage  Loan have been fully  disbursed  and there is no
      further  requirement  for  future  advances  thereunder,  and  any and all
      requirements  as to completion of any on-site or off-site  improvement and
      as to  disbursements of any escrow funds therefor have been complied with.
      All costs,  fees and  expenses  incurred in making or closing the Mortgage
      Loan and the recording of the Mortgage were paid, and the Mortgagor is not
      entitled to any refund of any amounts paid or due under the Mortgage  Note
      or Mortgage.

15.   Ownership.  The Seller is the sole owner and holder of the Mortgage  Loan.
      The  Mortgage  Loan is not  assigned or pledged or  otherwise  conveyed or
      encumbered  except to Buyer,  and the  Seller has good,  indefeasible  and
      marketable title thereto, and has full right to sell, transfer, pledge and
      assign the Mortgage  Loan to the Buyer free and clear of any  encumbrance,
      equity,  participation  interest,  lien, pledge, charge, claim or security
      interest,  and has full  right and  authority  subject to no  interest  or
      participation of, or agreement with, any other party, to assign,  transfer
      and pledge each Mortgage Loan pursuant to this Agreement and following the
      pledge of each Mortgage  Loan, the Buyer will hold such Mortgage Loan free
      and  clear  of any  encumbrance,  equity,  participation  interest,  lien,
      pledge,  charge,  claim or  security  interest  except  any such  security
      interest created pursuant to the terms of Agreement.

16.   Doing  Business.  All parties  which have had any interest in the Mortgage
      Loan,  whether as  mortgagee,  assignee,  pledgee or  otherwise,  are (or,
      during the period in which they

<PAGE>

      held and disposed of such interest,  were) (i) in compliance  with any and
      all applicable licensing requirements of the laws of the state wherein the
      Mortgaged  Property is located,  and (ii) either (A)  organized  under the
      laws of such state,  (B)  qualified  to do  business in such state,  (C) a
      Federal  savings and loan  association,  a savings bank or a national bank
      having a principal office in such state, or (D) not doing business in such
      state.

17.   Title Insurance.  The Seller holds a title insurance policy or a marked-up
      title commitment,  title insurance binder or title certificate which is in
      full force and effect;  which has an insurance  limit at least as great as
      the outstanding  principal  balance of the Mortgage Loan;  which names the
      Seller,  its  successors  and assigns,  as the insured  party and which is
      issued by an  Qualified  Insurer  that is  qualified to do business in the
      jurisdiction where the Mortgaged Property is located. Said policy shall:

      o     Insure the lien of the Mortgage consistent with the agreed-upon lien
            priority;

      o     Insure the absence of any prior lien of taxes or other assessments;

      o     Disclose whether all taxes and other lienable  assessments due as of
            the date of the policy have been paid-in-full; and

      o     Disclose  all other  matters  to which  the  Mortgaged  Property  is
            subject.

18.   No Defaults;  Right to Cure;  No Failure to Cure. If a First Lien Mortgage
      Loan,  there is no default,  breach,  violation  or event of  acceleration
      existing under the Mortgage or the Mortgage Note and no event has occurred
      which,  with the passage of time or with notice and the  expiration of any
      grace or cure period,  would  constitute a default,  breach,  violation or
      event of acceleration other than those payment delinquencies  permitted by
      paragraph  2 hereof,  and  neither  the Seller nor its  predecessors  have
      waived any  default,  breach,  violation  or event of  acceleration.  With
      respect to each  Mortgage Loan which is indicated by Seller to be a Second
      Lien  Mortgage  Loan (as  reflected on the Asset  Schedule)  (i) the prior
      mortgage  is in full force and effect,  (ii) there is no default,  breach,
      violation or event of  acceleration  existing under such prior mortgage or
      the related  mortgage note,  (iii) no event has occurred  which,  with the
      passage  of time or with  notice and the  expiration  of any grace or cure
      period,  would  constitute  a  default,  breach,  violation  or  event  of
      acceleration  thereunder other than those payment delinquencies  permitted
      by  paragraph  2 hereof,  and  either  (A) the prior  mortgage  contains a
      provision which allows or (B) applicable law requires, the mortgagee under
      the Second  Lien  Mortgage  Loan to receive  notice of, and  affords  such
      mortgagee an opportunity to cure any default under the First Lien Mortgage
      Loan, by payment in full or otherwise under the prior mortgage, and Seller
      has not received notice of any such default which has not been cured.

19.   No  Mechanics'  Liens.  There are no mechanics' or similar liens or claims
      which  have been  filed for work,  labor or  material  (and no rights  are
      outstanding  that under the law could

<PAGE>

      give rise to such liens) affecting the Mortgaged Property which are or may
      be liens prior to, or equal or coordinate with, the lien of the Mortgage.

20.   Location of Improvements;  No Encroachments.  All improvements  which were
      considered in determining  the Appraised  Value of the Mortgaged  Property
      lie wholly within the  boundaries  and building  restriction  lines of the
      Mortgaged Property,  and no improvements on adjoining  properties encroach
      upon the Mortgaged  Property.  No improvement  located on or being part of
      the  Mortgaged  Property  is in  violation  of any  applicable  zoning and
      building law, ordinance or regulation.

21.   Origination;  Payment Terms. The Mortgage Loan was originated or purchased
      by or in conjunction with a mortgagee approved by the Secretary of Housing
      and Urban  Development  pursuant to Sections  203 and 211 of the  National
      Housing Act, a savings and loan association,  a savings bank, a commercial
      bank, credit union, insurance company or similar banking institution which
      is  supervised  and  examined by a Federal or state  authority.  Principal
      payments on the Mortgage  Loan  commenced no more than 60 days after funds
      were  disbursed in connection  with the Mortgage  Loan.  The Note Interest
      Rate is adjusted,  with respect to adjustable rate Mortgage Loans, on each
      Interest  Rate  Adjustment  Date to equal the Index plus the Gross  Margin
      (rounded up or down to the nearest  .125%),  subject to the Interest  Rate
      Cap. The Mortgage Note is payable each month in equal monthly installments
      of principal and interest, which installments of interest, with respect to
      adjustable  rate  Mortgage  Loans,  are  subject  to  change  due  to  the
      adjustments  to the Note Interest  Rate on each  Interest Rate  Adjustment
      Date,  with  interest  calculated  and payable in arrears,  sufficient  to
      amortize  the Mortgage  Loan fully by the stated  maturity  date,  over an
      original term of not more than 30 years from commencement of amortization.
      The due date of the first  payment under the Mortgage Note is no more than
      60 days from the date of the Mortgage Note.

22.   Customary  Provisions.  The  Mortgage  Note  has a  stated  maturity.  The
      Mortgage contains  customary and enforceable  provisions such as to render
      the rights and remedies of the holder thereof adequate for the realization
      against the  Mortgaged  Property of the benefits of the security  provided
      thereby,  including, (i) in the case of a Mortgage designated as a deed of
      trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. Upon
      default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's
      sale of, the Mortgaged  Property  pursuant to the proper  procedures,  the
      holder of the Mortgage Loan will be able to deliver good and  merchantable
      title to the Mortgaged Property.  There is no homestead or other exemption
      available to a Mortgagor  which would interfere with the right to sell the
      Mortgaged  Property  at a  trustee's  sale or the right to  foreclose  the
      Mortgage.

23.   Conformance with Underwriting Guidelines.  The Mortgage Loan was generally
      underwritten  in accordance  with the  applicable  Qualified  Originator's
      Underwriting Guidelines applicable to Mortgage Loans.

24.   Occupancy  of  the  Mortgaged  Property.  As of  the  Purchase  Date,  the
      Mortgaged   Property  is  lawfully  occupied  under  applicable  law.  All
      inspections,  licenses and certificates

<PAGE>

      required to be made or issued with respect to all occupied portions of the
      Mortgaged Property and, with respect to the use and occupancy of the same,
      including  but  not  limited  to   certificates   of  occupancy  and  fire
      underwriting certificates, have been made or obtained from the appropriate
      authorities.   The  Seller  has  not   received   notification   from  any
      Governmental   Authority  that  the  Mortgaged  Property  is  in  material
      non-compliance  with such laws or regulations,  is being used, operated or
      occupied  unlawfully  or has  failed  to have or obtain  such  inspection,
      licenses or certificates,  as the case may be. The Seller has not received
      notice  of any  violation  or  failure  to  conform  with  any  such  law,
      ordinance,  regulation,  standard,  license or certificate.  The Mortgagor
      represented  at the time of  origination  of the  Mortgage  Loan  that the
      Mortgagor would occupy the Mortgaged  Property as the Mortgagor's  primary
      residence.

25.   No Additional Collateral.  Except as otherwise disclosed to the Buyer, the
      Mortgage Note is not and has not been secured by any collateral except the
      lien of the  corresponding  Mortgage  and  the  security  interest  of any
      applicable security agreement or chattel mortgage.

26.   Deeds of Trust.  In the event the Mortgage  constitutes a deed of trust, a
      trustee,  authorized and duly qualified  under  applicable law to serve as
      such, has been properly designated and currently so serves and is named in
      the  Mortgage,  and no fees or expenses are or will become  payable by the
      Buyer or its designee or the Buyer to the trustee under the deed of trust,
      except in connection with a trustee's sale after default by the Mortgagor.

27.   Delivery of Mortgage  Documents.  The Mortgage  Note,  the  Mortgage,  the
      Assignment  of Mortgage and any other  documents  required to be delivered
      under the Custodial  Agreement for each Mortgage Loan have been  delivered
      to  the  Buyer  or its  designee.  The  Custodian  is in  possession  of a
      complete, true and accurate Asset File with respect to each Eligible Asset
      which is to be purchased.

28.   Transfer of Mortgage  Loans.  The  Assignment of Mortgage is in recordable
      form and is acceptable for recording under the laws of the jurisdiction in
      which the Mortgaged Property is located.

29.   Due-On-Sale.  The  Mortgage  contains  an  enforceable  provision  for the
      acceleration  of  the  payment  of the  unpaid  principal  balance  of the
      Mortgage  Loan  in the  event  that  the  Mortgaged  Property  is  sold or
      transferred without the prior written consent of the mortgagee thereunder.

30.   No Buydown Provisions;  No Graduated Payments or Contingent Interests. The
      Mortgage  Loan  does not  contain  provisions  pursuant  to which  Monthly
      Payments are paid or partially  paid with funds  deposited in any separate
      account  established by the Seller, the Mortgagor,  or anyone on behalf of
      the Mortgagor,  or paid by any source other than the Mortgagor nor does it
      contain any other  similar  provisions  which may  constitute  a "buydown"
      provision.  The Mortgage Loan is not a graduated payment mortgage loan and

<PAGE>

      the Mortgage Loan does not have a shared  appreciation or other contingent
      interest feature.

31.   Consolidation  of  Future  Advances.  Any  future  advances  made  to  the
      Mortgagor  prior to the  Purchase  Date  have been  consolidated  with the
      outstanding  principal  amount  secured by the  Mortgage,  and the secured
      principal amount, as consolidated, bears a single interest rate and single
      repayment  term.  The  lien  of the  Mortgage  securing  the  consolidated
      principal  amount is expressly  insured as having (A) first lien  priority
      with respect to each Mortgage Loan which is indicated by such Seller to be
      a First Lien Mortgage Loan (as  reflected on the Asset  Schedule),  or (B)
      second lien priority with respect to each Mortgage Loan which is indicated
      by Seller to be a Second Lien  Mortgage  Loan (as  reflected  on the Asset
      Schedule),  in either case, by a title insurance policy, an endorsement to
      the policy  insuring  the  mortgagee's  consolidated  interest or by other
      title  evidence.  The  consolidated  principal  amount does not exceed the
      original principal amount of the Mortgage Loan.

32.   Mortgaged  Property  Undamaged.  The  Mortgaged  Property is  undamaged by
      waste, fire,  earthquake or earth movement,  windstorm,  flood, tornado or
      other  casualty  so as to  affect  adversely  the  value of the  Mortgaged
      Property  as  security  for the  Mortgage  Loan or the use for  which  the
      premises  were  intended  and each  Mortgaged  Property is in good repair.
      There  have not been any  condemnation  proceedings  with  respect  to the
      Mortgaged   Property   and  the  Seller  has  no  knowledge  of  any  such
      proceedings.

33.   Collection Practices;  Escrow Deposits;  Interest Rate Adjustments. To the
      best of the Seller's knowledge,  the origination and collection  practices
      used by the originator,  each servicer of the Mortgage Loan and the Seller
      with respect to the Mortgage Loan have been in all respects  materially in
      compliance  with  Accepted  Servicing   Practices,   applicable  laws  and
      regulations,  and have been in all respects legal and proper. With respect
      to escrow  deposits and escrow  payments  (other than with respect to each
      Mortgage  Loan  which is  indicated  by such  Seller  to be a Second  Lien
      Mortgage Loan and for which the mortgagee under the prior mortgage lien is
      collecting escrow payments (as reflected on the Asset Schedule),  all such
      payments are in the possession of, or under the control of, the Seller and
      there exist no  deficiencies  in connection  therewith for which customary
      arrangements for repayment thereof have not been made. All escrow payments
      have been  collected  in full  compliance  with state and federal  law. An
      escrow  of  funds  is not  prohibited  by  applicable  law  and  has  been
      established  in an amount  sufficient  to pay for every item that  remains
      unpaid and has been  assessed  but is not yet due and  payable.  No escrow
      deposits or escrow  payments or other  charges or payments  due the Seller
      have been  capitalized  under the Mortgage or the Mortgage  Note. All Note
      Interest Rate adjustments  have been made in strict  compliance with state
      and federal law and the terms of the related  Mortgage  Note. Any interest
      required  to be paid  pursuant  to state,  federal  and local law has been
      properly  paid and  credited.  The Mortgage  Loan is  denominated  in U.S.
      Dollars.

<PAGE>

34.   Conversion  to Fixed  Interest  Rate.  With  respect  to  adjustable  rate
      Mortgage  Loans,  the Mortgage Loan is not convertible to a fixed interest
      rate Mortgage Loan.

35.   Other Insurance Policies. No action, inaction or event has occurred and no
      state of facts  exists or has existed  that has resulted or will result in
      the exclusion from, denial of, or defense to coverage under any applicable
      special hazard insurance  policy or bankruptcy  bond,  irrespective of the
      cause of such failure of coverage. In connection with the placement of any
      such insurance, no commission, fee, or other compensation has been or will
      be received by the Seller or by any officer,  director, or employee of the
      Seller  or any  designee  of the  Seller or any  corporation  in which the
      Seller or any officer,  director,  or employee had a financial interest at
      the time of placement of such insurance.

36.   Soldiers'  and Sailors'  Civil Relief Act. The  Mortgagor has not notified
      the Seller,  and the Seller has no knowledge,  of any relief  requested or
      allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act
      of 1940.

37.   Appraisal.  All required  documentation has been received by the Servicer.
      Each of the  documents and  instruments  included in the Asset File and in
      the  Servicing  File is duly  executed and in due and proper form and each
      such document or instrument is in a form  generally  acceptable to prudent
      institutional  mortgage  lenders  that  regularly  originate  and purchase
      Mortgage  Loans.  The Servicing  File contains an appraisal of the related
      Mortgaged  Property  signed  prior to the  approval of the  Mortgage  Loan
      application by a qualified  appraiser,  duly appointed by the Seller,  who
      had no interest,  direct or indirect in the  Mortgaged  Property or in any
      loan made on the security thereof,  and whose compensation is not affected
      by the approval or disapproval of the Mortgage Loan, and the appraisal and
      appraiser  both  satisfy  the  requirements  of  Title  XI of the  Federal
      Institutions Reform,  Recovery, and Enforcement Act of 1989 as amended and
      the  regulations  promulgated  thereunder,  as in  effect  on the date the
      Mortgage  Loan was  originated.  In the event that the Mortgage Loan had a
      principal  balance at  origination  equal to or greater  than (a) $300,000
      with  respect  to each  Mortgage  Loan as to which the  related  Mortgaged
      Property is located in  California,  and (b)  $250,000 in all other cases,
      the Servicing File contains a drive-by  appraisal  performed not more than
      30 days prior to the applicable Purchase Date which confirms the Appraised
      Value of the Mortgaged Property.

38.   Disclosure Materials. The Mortgagor has executed a statement to the effect
      that the  Mortgagor  has received  all  disclosure  materials  required by
      applicable  law with  respect to the making of  adjustable  rate  mortgage
      loans, and the Seller maintains such statement in the Servicing File.

39.   Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan was
      made in connection with the construction or  rehabilitation of a Mortgaged
      Property or facilitating the trade-in or exchange of a Mortgaged Property.

<PAGE>

40.   No Defense to Insurance Coverage. No action has been taken or failed to be
      taken,  no event has  occurred and no state of facts exists or has existed
      on or prior to the Purchase Date (whether or not known to the Seller on or
      prior to such date)  which has  resulted  or will  result in an  exclusion
      from,  denial  of, or  defense  to  coverage  under any  private  mortgage
      insurance  (including,  without  limitation,  any  exclusions,  denials or
      defenses  which  would  limit or reduce  the  availability  of the  timely
      payment of the full amount of the loss  otherwise  due  thereunder  to the
      insured)  whether  arising  out  of  actions,   representations,   errors,
      omissions,  negligence,  or fraud of the Seller,  the related Mortgagor or
      any party involved in the  application  for such  coverage,  including the
      appraisal,  plans and  specifications  and  other  exhibits  or  documents
      submitted therewith to the insurer under such insurance policy, or for any
      other reason under such  coverage,  but not  including the failure of such
      insurer to pay by reason of such insurer's breach of such insurance policy
      or such insurer's financial inability to pay.

41.   Capitalization  of  Interest.  The  Mortgage  Note  does not by its  terms
      provide for negative amortization or forbearance of interest.

42.   No  Equity  Participation.  No  document  relating  to the  Mortgage  Loan
      provides  for  any  contingent  or  additional  interest  in the  form  of
      participation  in the cash flow of the Mortgaged  Property or a sharing in
      the appreciation of the value of the Mortgaged Property.  The indebtedness
      evidenced by the Mortgage Note is not convertible to an ownership interest
      in the Mortgaged Property or the Mortgagor and the Seller has not financed
      nor does it own  directly  or  indirectly,  any  equity of any form in the
      Mortgaged Property or the Mortgagor.

43.   Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have not been
      and shall not be used to  satisfy,  in whole or in part,  any debt owed or
      owing by the Mortgagor to the Seller or any Affiliate or  correspondent of
      Seller.

44.   Origination  Date. The Origination  Date is no earlier than (A) sixty (60)
      days prior to the date the Mortgage Loan is first subject to a Transaction
      provided such  Mortgage  Loan was  originated by the Seller or a Qualified
      Originator  affiliated with the Seller or (B) seventy-five (75) days prior
      to the date the Mortgage Loan is first  subject to a Transaction  provided
      such Mortgage Loan was originated by a Qualified Originator not affiliated
      with the Seller.

45.   Qualified  Originator.  The Mortgage Loan has been  originated by, and, if
      applicable, purchased by the Seller from, a Qualified Originator.

46.   Mortgage  Submitted for Recordation.  The Mortgage either has been or will
      promptly be submitted  for  recordation  in the  appropriate  governmental
      recording  office of the  jurisdiction  where the  Mortgaged  Property  is
      located.

47.   LTV;  CLTV.  No  adjustable  rate First Lien  Mortgage Loan or Second Lien
      Mortgage Loan has an LTV or a CLTV, as  applicable,  greater than 90%, and
      no fixed rate First

<PAGE>

      Lien  Mortgage  Loan or Second Lien Mortgage Loan has an LTV or a CLTV, as
      applicable, greater than 100%.

48.   Signatures and Statements. All signatures,  names, addresses,  amounts and
      other statements  entered in the documentation  referred to above, are, to
      the best knowledge of Seller, true and correct.

49.   Securitizable  Asset.  The  Eligible  Asset shall be of a type and quality
      which the Buyer determines,  in its reasonable discretion, is eligible for
      sale in the secondary market or for  securitization  without  unreasonable
      credit enhancement.

50.   No  Foreclosure.  There has been no default by a  Mortgagor  on a Mortgage
      Loan resulting in the  foreclosure on, or trustee's sale of, the Mortgaged
      Property.

51.   True  Sale.  Any  Mortgage  Loan  funded in the name of or  acquired  by a
      Qualified Originator which is an Affiliate of the Seller has been conveyed
      to the Seller  pursuant to a legal sale, and if so requested by the Buyer,
      is covered by an opinion of counsel to that  effect in form and  substance
      acceptable to the Buyer.

Purchase Facility:

      (i) The information with respect to each Mortgage Loan and the information
set forth in the related  Mortgage  Loans Schedule is true and correct as of the
Cut-off Date;

      (ii) The Mortgage Note,  the Mortgage,  the Assignment of Mortgage and any
other  documents  required to be delivered  with respect to each  Mortgage  Loan
pursuant to the Custodial Agreement, have been delivered to the Custodian all in
compliance  with the specific  requirements  of the  Custodial  Agreement.  With
respect  to each  Mortgage  Loan,  the  Seller is in  possession  of a  complete
Mortgage  File in compliance  with Exhibit 5, except for such  documents as have
been  delivered to the Custodian and except for the  Servicing  File,  which has
been delivered to the Interim Servicer;

      (iii) Each Mortgage Loan is an Eligible Mortgage Loan or an Exception Loan
within the applicable Exception Limit;

      (iv) Each Mortgaged Property is improved by a Residential Dwelling. If the
Residential  Dwelling on the Mortgaged  Property is a condominium unit or a unit
in a planned unit development (other than a de minimis planned unit development)
such  condominium  or planned unit  development  project  meets the  eligibility
requirements of Fannie Mae and Freddie Mac;

      (v) No Second Lien  Mortgage  Loan had a CLTV at  origination  equal to or
greater than 95%. No Mortgage Loan had a combined LTV  (including  the amount of
all liens senior to or subordinate to the lien of the related  Mortgage) greater
than 100%;

<PAGE>

      (vi) Each  Mortgage  Note with respect to the Mortgage  Loans will provide
for a schedule  of  substantially  level and equal  Monthly  Payments  which are
sufficient to amortize  fully the principal  balance of such Mortgage Note on or
before its maturity  date.  Unless  stated on the  Mortgage  Loan  Schedule,  no
Mortgage Loan has a balloon payment feature;

      (vii) As of the Closing  Date,  each  Mortgage  is a valid and  subsisting
first lien on the Mortgaged Property with respect to each Mortgage Loan which is
indicated  to be a  First  Lien  (as  reflected  on the  related  Mortgage  Loan
Schedule) or second lien on the Mortgaged Property with respect to each Mortgage
Loan which is indicated to be a Second Lien  Mortgage  Loan (as reflected on the
related  Mortgage Loan  Schedule) and subject in all cases to the  exceptions to
title set forth in the title  insurance  policy or  attorney's  opinion of title
with  respect to the related  Mortgage  Loan,  which  exceptions  are  generally
acceptable to banking  institutions  in connection  with their regular  mortgage
lending  activities,  and such other exceptions to which similar  properties are
commonly subject and which do not individually, or in the aggregate,  materially
and  adversely  affect the benefits of the  security  intended to be provided by
such Mortgage;

      (viii)  Immediately  prior to the transfer and  assignment of the Mortgage
Loans,  the Seller held good and  indefeasible  title to, and was the sole owner
of, each Mortgage Loan  (including  the related  Mortgage Note) conveyed by such
Seller subject to no liens, charges, mortgages, encumbrances or rights of others
except  as set forth in  clause  (vii) or other  liens  which  will be  released
simultaneously  with such  transfer and  assignment;  and  immediately  upon the
transfer and assignment  herein  contemplated,  the Purchaser will hold good and
indefeasible  title to, and be the sole owner of, each  Mortgage Loan subject to
no liens,  charges,  mortgages,  encumbrances  or rights of others except as set
forth in  paragraph  (vii) or other liens which will be released  simultaneously
with such transfer and assignment;

      (ix) No payment  required to be made on the Mortgage  Loan is more than 29
days delinquent from its contractual Due Date as of the close of business on the
related Closing Date; the Seller has not advanced  funds, or induced,  solicited
or knowingly  received any advance of funds from a party other than the owner of
the related Mortgaged Property,  directly or indirectly,  for the payment of any
amount  required  by the  Mortgage  Note or  Mortgage;  such  Mortgage  Loan was
originated no later than 60 days prior to the related  Closing  Date;  and there
has been no delinquency, exclusive of any period of grace, in any payment by the
Mortgagor thereunder since origination;

      (x)  There  is no  delinquent  tax or  assessment  lien  on any  Mortgaged
Property,  and each Mortgaged  Property is free of substantial  damage and is in
good repair;

      (xi) There is no valid and enforceable offset,  defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the related Mortgagor
to pay the unpaid principal of or interest on such Mortgage Note;

      (xii)  There is no  mechanics'  lien or claim for work,  labor or material
affecting  any Mortgaged  Property  which is or may be a lien prior to, or equal
with, the lien of the related

<PAGE>

Mortgage except those which are insured  against by any title  insurance  policy
referred to in paragraph (xiv) below;

      (xiii) Each Mortgage Loan at the time it was made complied in all material
respects  with  applicable  state and federal laws and  regulations,  including,
without  limitation,   the  federal  Truth-in-Lending  Act  and  other  consumer
protection laws, usury, equal credit opportunity, disclosure and recording laws;

      (xiv) With respect to each Mortgage Loan either (a) an attorney's  opinion
of title has been  obtained  but no title  policy  has been  obtained,  or (b) a
lender's  title  insurance  policy,  issued  in  standard  American  Land  Title
Association form by a title insurance company authorized to transact business in
the state in which the related Mortgaged  Property is situated,  in an amount at
least  equal  to the  original  balance  of such  Mortgage  Loan,  insuring  the
mortgagee's  interest  under the related  Mortgage Loan as the holder of a valid
first or second  mortgage lien of record on the real  property  described in the
related  Mortgage,  subject only to exceptions  of the character  referred to in
paragraph  (vii) above,  was  effective on the date of the  origination  of such
Mortgage Loan,  and, as of the Closing Date, such policy is valid and thereafter
such policy shall continue in full force and effect;

      (xv) The improvements upon each Mortgaged  Property are covered by a valid
and existing hazard  insurance policy with a generally  acceptable  carrier that
provides for fire and extended coverage  representing coverage not less than the
least of (A) the  outstanding  principal  balance of the related  Mortgage  Loan
(together,  in the case of a Second Lien  Mortgage  Loan,  with the  outstanding
principal  balance of the Senior  Lien),  (B) the  minimum  amount  required  to
compensate  for  damage  or loss on a  replacement  cost  basis  or (C) the full
insurable value of the Mortgaged Property;

      (xvi) If any  Mortgaged  Property is in an area  identified in the Federal
Register by the Federal  Emergency  Management  Agency as having  special  flood
hazards,  a flood  insurance  policy in a form meeting the  requirements  of the
current  guidelines  of the Flood  Insurance  Administration  is in effect  with
respect to such  Mortgaged  Property with a generally  acceptable  carrier in an
amount  representing  coverage  not less than the  least of (A) the  outstanding
principal  balance of the  related  Mortgage  Loan  (together,  in the case of a
Second Lien Mortgage Loan, with the outstanding  principal balance of the Senior
Lien),  (B) the minimum  amount  required to compensate  for damage or loss on a
replacement  cost basis or (C) the maximum amount of insurance that is available
under the Flood Disaster Protection Act of 1973;

      (xvii) Each  Mortgage  and Mortgage  Note is the legal,  valid and binding
obligation of the maker thereof and is enforceable in accordance with its terms,
except  only as such  enforcement  may be  limited  by  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting the  enforcement of
creditors'  rights  generally  and by  general  principles  of  equity  (whether
considered  in a proceeding  or action in equity or at law),  and all parties to
each Mortgage Loan had full legal capacity to execute all documents  relating to
such Mortgage Loan and convey the estate therein purported to be conveyed;

<PAGE>

      (xviii) The Seller has caused and will cause to be  performed  any and all
acts  required  to be  performed  to  preserve  the rights and  remedies  of the
Purchaser in any insurance policies  applicable to any Mortgage Loans including,
without  limitation,  any necessary  notifications  of insurers,  assignments of
policies or interests  therein,  and  establishments  of co-insured,  joint loss
payee and mortgagee rights in favor of the Purchaser;

      (xix) As of the Closing Date,  no more than 1.0% of the  aggregate  Stated
Principal Balance of the Mortgage Loans will be secured by Mortgaged  Properties
located within any single zip code area;

      (xx) Each  original  Mortgage  was  recorded or is in the process of being
recorded,  and all  subsequent  assignments  of the original  Mortgage have been
delivered for recordation or have been recorded in the appropriate jurisdictions
wherein  such  recordation  is  necessary to perfect the lien thereof as against
creditors of or purchasers from the Seller delivering the related Mortgage Loan;

      (xxi)  The terms of each  Mortgage  Note and each  Mortgage  have not been
impaired,  altered or modified in any  respect,  except by a written  instrument
which has been  recorded,  if  necessary,  to maintain the lien  priority of the
Mortgage,  and which have been delivered to the Custodian;  the substance of any
such waiver,  alteration or  modification  is reflected on the related  Mortgage
Loan  Schedule.  No instrument of waiver,  alteration or  modification  has been
executed,  and no Mortgagor has been  released,  in whole or in part,  except in
connection with an assumption  agreement,  which  assumption  agreement has been
delivered to the  Custodian  and the terms of which are reflected in the related
Mortgage Loan Schedule;

      (xxii) The proceeds of each Mortgage Loan have been fully  disbursed,  and
there is no  obligation  on the part of the  mortgagee  to make future  advances
thereunder.  Any and all requirements as to completion of any onsite or off-site
improvements  and as to  disbursements  of any escrow funds  therefor  have been
complied  with.  All costs,  fees and expenses  incurred in making or closing or
recording such Mortgage Loans were paid;

      (xxiii) The related  Mortgage  Note is not and has not been secured by any
collateral,   pledged   account  or  other  security  except  the  lien  of  the
corresponding Mortgage;

      (xxiv) No Mortgage Loan was originated under a buydown plan;

      (xxv)  No  Mortgage  Loan  has a  shared  appreciation  feature,  or other
contingent interest feature;

      (xxvi) Each Mortgaged  Property is located in the state  identified in the
respective  Schedule of Mortgage  Loans and  consists of one or more  parcels of
real property with a residential dwelling erected thereon;

<PAGE>

      (xxvii) Each  Mortgage  contains a provision for the  acceleration  of the
payment of the unpaid  principal  balance of the  related  Mortgage  Loan in the
event the related  Mortgaged  Property is sold without the prior  consent of the
mortgagee thereunder;

      (xxviii) Any  advances  made after the date of  origination  of a Mortgage
Loan but prior to the Cut-off Date have been  consolidated  with the outstanding
principal  amount  secured by the related  Mortgage,  and the secured  principal
amount, as consolidated,  bears a single interest rate and single repayment term
reflected  on the  respective  Schedule  of  Mortgage  Loans.  The  consolidated
principal  amount does not exceed the original  principal  amount of the related
Mortgage  Loan.  No Mortgage Note permits or obligates the Seller to make future
advances to the related Mortgagor at the option of the Mortgagor;

      (xxix)  There is no  proceeding  pending  or  threatened  for the total or
partial  condemnation  of  any  Mortgaged  Property,  nor is  such a  proceeding
currently  occurring,  and each Mortgaged  Property is undamaged by waste, fire,
water, flood, earthquake or earth movement;

      (xxx) All of the  improvements  which were  included  for the  purposes of
determining the Appraised Value of any Mortgaged  Property lie wholly within the
boundaries and building  restriction  lines of such Mortgaged  Property,  and no
improvements  on adjoining  properties  encroach upon such  Mortgaged  Property,
unless any such  improvements  and are stated in the title insurance  policy and
affirmatively insured;

      (xxxi) No improvement  located on or being part of any Mortgaged  Property
is in violation of any  applicable  zoning law or regulation.  All  inspections,
licenses  and  certificates  required to be made or issued  with  respect to all
occupied  portions of each  Mortgaged  Property and, with respect to the use and
occupancy of the same,  including but not limited to  certificates  of occupancy
and  fire  underwriting  certificates,  have  been  made or  obtained  from  the
appropriate  authorities and such Mortgaged  Property is lawfully occupied under
the applicable law;

      (xxxii)  With respect to each  Mortgage  constituting  a deed of trust,  a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become  payable by the  Purchaser to the trustee  under the
deed of trust,  except in connection  with a trustee's sale after default by the
related Mortgagor;

      (xxxiii) Each Mortgage contains customary and enforceable provisions which
render  the  rights  and  remedies  of  the  holder  thereof  adequate  for  the
realization  against  the  related  Mortgaged  Property  of the  benefits of the
security, including (A) in the case of a Mortgage designated as a deed of trust,
by  trustee's  sale  and (B)  otherwise  by  judicial  foreclosure.  There is no
homestead  or other  exemption  available to the related  Mortgagor  which would
materially  interfere with the right to sell the related Mortgaged Property at a
trustee's sale or the right to foreclose the related Mortgage. The Mortgagor has
not notified the Seller and the Seller has no knowledge of any relief  requested
or allowed to the  Mortgagor  under the Soldiers and Sailors Civil Relief Act of
1940;

<PAGE>

      (xxxiv) There is no default,  breach,  violation or event of  acceleration
existing  under any  Mortgage or the related  Mortgage  Note and no event which,
with the passage of time or with notice and the  expiration of any grace or cure
period, would constitute a default,  breach, violation or event of acceleration;
and the  Seller  has not  waived  any  default,  breach,  violation  or event of
acceleration.  With  respect to each  Mortgage  Loan which is  indicated to be a
Second Lien Mortgage Loan (as reflected on the related  Mortgage Loan  Schedule)
(i) the  Mortgage  Note is in full force and  effect,  (ii) there is no default,
breach,  violation or event of  acceleration  existing  under such Mortgage Note
mortgage or the related mortgage note, (iii) no event which, with the passage of
time or with  notice  and the  expiration  of any  grace or cure  period,  would
constitute a default, breach, violation or event of acceleration thereunder, and
either (A) the Mortgage Note mortgage  contains a provision  which allows or (B)
applicable  law requires,  the mortgagee  under the second lien Mortgage Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the Mortgage Note mortgage;

      (xxxv) No  instrument of release or waiver has been executed in connection
with any Mortgage Loan, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement which has been approved by the
primary mortgage guaranty  insurer,  if any, and which has been delivered to the
Purchaser;

      (xxxvi) Each Mortgage  Loan was  originated  based upon a full  appraisal,
which included an interior  inspection of the subject  property and was made and
signed,  prior to the approval of the Mortgage Loan application,  by a qualified
appraiser,  duly  appointed by the  originator,  who had no interest,  direct or
indirect in the Mortgaged  Property or in any loan made on the security thereof,
whose  compensation  is not  affected  by the  approval  or  disapproval  of the
Mortgage Loan.  Each appraisal of the Mortgage Loan was made in accordance  with
the relevant  provisions of the Financial  Institutions  Reform,  Recovery,  and
Enforcement Act of 1989;

      (xxxvii) The Mortgage Loans were not selected for inclusion in the related
Mortgage  Loan Package by the Seller on any basis  intended to adversely  affect
the Purchaser;

      (xxxviii)  The  Seller  has any  actual  knowledge  that  there  exist any
hazardous  substances,  hazardous  wastes  or solid  wastes,  as such  terms are
defined in the Comprehensive  Environmental  Response Compensation and Liability
Act, the Resource Conservation and Recovery Act of 1976, or other federal, state
or local environmental legislation on any Mortgaged Property;

      (xxxix)  Seller was  properly  licensed or  otherwise  authorized,  to the
extent  required by applicable law, to originate or purchase each Mortgage Loan;
and the consummation of the transactions herein contemplated, including, without
limitation,  the receipt of the ownership of the Mortgage Loans by the Purchaser
will not involve the violation of such laws;

      (xl) With respect to each Mortgaged Property subject to a ground lease (i)
the current  ground lessor has been  identified  and all ground rents which have
previously  become  due and owing have been  paid;  (ii) the  ground  lease term
extends,  or is  automatically  renewable,  for at least five  years  beyond the
maturity date of the related Mortgage Loan; (iii) the ground lease has

<PAGE>

been duly  executed  and  recorded;  (iv) the amount of the ground  rent and any
increases therein are clearly  identified in the lease and are for predetermined
amounts at  predetermined  times; (v) the ground rent payment is included in the
borrower's  monthly payment as an expense item; (vi) the Purchaser has the right
to cure defaults on the ground lease;  and (vii) the terms and conditions of the
leasehold do not prevent the free and absolute  marketability  of the  Mortgaged
Property;

      (xli) All taxes,  governmental  assessments,  insurance  premiums,  water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been  established
in an amount  sufficient  to pay for every  such item which  remains  unpaid and
which has been assessed but is not yet due and payable;

      (xlii) As of the Closing  Date,  neither  Seller has  received a notice of
default of any Mortgage  Loan secured by any  Mortgaged  Property  which has not
been cured by a party other than such Seller;

      (xliii)  All of the  Adjustable  Rate  Mortgage  Loans are in a first lien
position;

      (xliv) The Seller shall,  at its own expense,  cause each Mortgage Loan to
be covered by a Tax Service Contract which is assignable to the Purchaser or its
designee;  provided  however,  that if the  Seller  fails to  purchase  such Tax
Service  Contract,  the Seller shall be required to reimburse  the Purchaser for
all costs and expenses incurred by the Purchaser in connection with the purchase
of any such Tax Service Contract;

      (xlv) Each Mortgage Loan was  originated by an affiliate of Seller and was
conveyed  to  Seller  pursuant  to a  legal  sale,  and if so  requested  by the
Purchaser,  is covered  by an  opinion  of  counsel  to that  effect in form and
substance acceptable to the Purchaser;

      (xlvi) In the event  that the  Mortgage  Loan had a  principal  balance at
origination  equal to or greater than (a) $300,000 with respect to each Mortgage
Loan as to which the related  Mortgaged  Property is located in California,  and
(b) $250,000 in all other cases, the Mortgage File contains a drive-by appraisal
performed  not more than 30 days prior to the Closing Date which  confirms  that
the LTV of the Mortgage  Loan  satisfies  the  Underwriting  Guidelines  for the
applicable loan program;

      (xlvii)  Except to the extent that the Mortgage Loan is an AmGen  Mortgage
Loan,  the Mortgage  Loan has not been  previously  financed or purchased by any
third party.  Following the purchase of such Mortgage Loan, the aggregate unpaid
principal  balance  of the AmGen  Mortgage  Loans  shall not  exceed  10% of the
aggregate  unpaid  principal  balance  of all of the  Portfolio  Mortgage  Loans
purchased hereunder;

      (xlviii) No Mortgage Loan was made in connection with (a) the construction
or  rehabilitation  of a Mortgaged  Property;  (b)  facilitating the trade-in or
exchange of a Mortgaged

<PAGE>

Property; (c) facilitating the sale of an REO property or (d) the refinancing of
a delinquent  mortgage loan originated or acquired by Seller which was more than
60 days delinquent;

      (xlix) No Fixed Rate  Mortgage  Loan has an LTV  greater  than 100% and no
Adjustable Rate Mortgage Loan has an LTV greater than 90%;

      (l) All parties which have had any interest in the Mortgage Loan,  whether
as  mortgagee,  assignee,  pledgee or otherwise,  are (or,  during the period in
which they held and disposed of such interest,  were) in compliance with any and
all applicable  "doing  business" and licensing  requirements of the laws of the
state wherein the Mortgaged Property is located;

      (li) The Mortgage Loan was originated (within the meaning of the Secondary
Mortgage Market  Enhancement Act of 1984) by a savings and loan  association,  a
savings  bank,  a  commercial  bank or  similar  banking  institution  which  is
supervised  and  examined  by a federal or state  authority,  or by a  mortgagee
approved as such by the Secretary of HUD;

      (lii) The origination and collection  practices used by the Seller and any
other  originator  with respect to each  Mortgage Note and Mortgage have been in
all respects legal,  proper,  prudent and customary in the mortgage  origination
and  servicing  industry.  The Mortgage Loan has been serviced by the Seller and
any  predecessor  servicer in  accordance  with the terms of the Mortgage  Note.
[With respect to escrow deposits and Escrow  Payments,  if any, (other than with
respect to each  Mortgage  Loan which is indicated to be a Second Lien  Mortgage
Loan and for which the mortgagee  under the Mortgage  Note is collecting  Escrow
Payments),  all such payments are in the possession of, or under the control of,
the Seller and there exist no  deficiencies  in  connection  therewith for which
customary  arrangements  for  repayment  thereof  have not been made.] No escrow
deposits  or Escrow  Payments or other  charges or payments  due the Seller have
been  capitalized  under any Mortgage or the related  Mortgage  Note and no such
escrow  deposits or Escrow Payments are being held by the Seller for any work on
a Mortgaged Property which has not been completed;

      (liii)  The  Mortgage  Loan  was   underwritten  in  accordance  with  the
Underwriting Guidelines in effect at the time the Mortgage Loan was originated;

<PAGE>

      (liv) No error, omission, misrepresentation,  negligence, fraud or similar
occurrence  with  respect to a Mortgage  Loan has taken place on the part of any
person,  including without limitation the Mortgagor,  any appraiser, any builder
or developer,  or any other party  involved in the  origination  of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage Loan;

      (lv) The  Assignment of Mortgage is in  recordable  form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;

      (lvi) No Mortgage Loan which is a Cash-out  Refinancing  was originated in
the State of Texas;

      (lvii) With respect to each Mortgage  Loan which is a Second Lien,  (i) if
the related  Mortgage  Note  provides  for  negative  amortization,  the LTV was
calculated  at the maximum  principal  balance of such  Mortgage Note that could
result upon application of such negative  amortization  feature, and (ii) either
no consent for the Mortgage  Loan is required by the holder of the Mortgage Note
or such consent has been obtained and is contained in the Mortgage File; and

      (lviii)  With  respect  to each  Mortgage  Loan  which is  subject  to the
provisions  of HOEPA,  the Mortgage  Loan is  identified as such on the Mortgage
Loan  Schedule,  and the  related  Mortgage  File  contains  a  notice  from the
originator  and a copy of a notice  to each  entity  which  was a  purchaser  or
assignee  of the  Mortgage  Loan  satisfying  the  provisions  of HOEPA  and the
regulations issued thereunder to the effect that the Mortgage Loan is subject to
special truth-in-lending rules.

<PAGE>

                                                                    EXHIBIT V(A)
                         Representations and Warranties
                         Regarding Empire Mortgage Loans

(a) The Borrower represents and warrants to the Lender that:

            (1)  It  has  been  duly  organized  and is  validly  existing  as a
corporation under the laws of its state of incorporation.

            (2) It is duly  qualified  in  each  state  in  which  it  transacts
business  and is not in  default  of such  state's  applicable  laws,  rules and
regulations.

            (3) It has the requisite  power and authority and legal right to own
and  grant  a lien  on  all  of its  right,  title  and  interest  in and to the
Collateral and to execute and deliver,  engage in the transactions  contemplated
by, and perform and observe the terms and  conditions  of, this  Agreement,  the
Secured Note and the Custodial Agreement.

            (4)  It is  solvent  and  is  not in  default  under  any  mortgage,
borrowing agreement or other instrument or agreement  pertaining to indebtedness
for borrowed  money,  and the execution and delivery by it of this Agreement and
the  Custodial  Agreement  and the  execution by it of the Secured Note will not
result in any violation of any such mortgage, instrument or agreement.

            (5) All of its audited and unaudited financial  statements,  budgets
and certificates or any certificates of its officers furnished to the Lender are
true  and  complete  and do not  omit  to  disclose  any  material  liabilities,
contingent  or otherwise,  or other facts  relevant to its  condition.  All such
audited and unaudited financial statements have been prepared in accordance with
GAAP.

            (6) This  Agreement,  the Secured Note and the  Custodial  Agreement
have each been duly authorized and executed by it and each is valid, binding and
enforceable against it in accordance with its terms, and the execution, delivery
and  performance  by it of this  Agreement and the  Custodial  Agreement and the
execution by it of the Secured Note do not conflict  with, or will not result in
a breach  of, any term or  provision  of its  certificate  of  incorporation  or
by-laws or any material agreement or instrument to which it is bound (including,
without  limitation,  its  license  from  HUD as an  authorized  originator  and
servicer of Title I Loans) or any law, rule, regulation,  order, judgment, writ,
injunction  or  decree   applicable  to  it  of  any  court,   regulatory  body,
administrative agency or governmental body having jurisdiction over it.

            (7) No consent, approval, authorization or order of, registration or
filing with, or notice to any governmental  authority or court is required under
applicable law in connection with the execution,  delivery and performance by it
of this Agreement, the Custodial Agreement and the Secured Note.


                                    Exh V(A)-1
<PAGE>

            (8) There is no action,  proceeding or investigation  pending or, to
the best knowledge of it, threatened against it before any court, administrative
agency or other  tribunal (A) asserting the  invalidity of this  Agreement,  the
Custodial Agreement or the Secured Note, (B) seeking to prevent the consummation
of any  of the  transactions  contemplated  by  this  Agreement,  the  Custodial
Agreement  or the Secured  Note,  or (C) which might  materially  and  adversely
affect the validity of the Home  Improvement  Loans or the  performance by it of
its obligations under, or the validity or enforceability of, this Agreement, the
Custodial Agreement or the Secured Note.

            (9)  Since the date of this  Agreement,  there has been no change in
the business,  operations,  financial  condition,  properties or prospects of it
which  would  have a material  adverse  affect on its  ability  to  perform  its
obligations under this Agreement, the Custodial Agreement or the Secured Note.

(b)  With  respect  to  each  Title  I Loan  delivered  by the  Borrower  to the
Custodian, the Borrower represents and warrants to the Lender that:

            (1) Such Title I Loan and all  accompanying  documents  are complete
and authentic and all signatures thereon are genuine.

            (2) Such Title I Loan arose from a bona fide dealer or direct  loan,
as defined in the Title I Regulations,  complying with all applicable  state and
Federal laws and  regulations,  to persons having legal capacity to contract and
is not subject to any defense, set-off or counterclaim

            (3) All amounts  represented to be payable on such Title I Loan are,
in fact, payable in accordance with the provisions of such Title I Loan.

            (4) No default has occurred in any provisions of such Title I Loan.

            (5) The  terms  of the  Note  and the  Mortgage,  if a  Mortgage  is
required by the Title I Regulations, relating to such Title I Loan have not been
impaired,  waived,  altered  or  modified  in any  respect,  except  by  written
instruments  reflected in the documents  delivered to the Custodian  pursuant to
Section 2 of the Custodial Agreement,  and no provision of such Note or Mortgage
has been "whited out" or erased unless such  modification  has been initialed by
each of the parties to such Title I Loan. No instrument of waiver, alteration or
modification  has been executed,  and the Obligor has not been released from the
related  Mortgage,  if any, in whole or in part,  except in  connection  with an
assumption  agreement,  which assumption  agreement is part of the mortgage file
and the terms of which are reflected in the documents delivered to the Custodian
pursuant to Section 2 of the Custodial  Agreement,  and the Borrower shall allow
no assumption of any Mortgage.

            (6)  Any  property  subject  to  any  security   interest  given  in
connection with such Title I Loan is not subject to any encumbrance other than a
stated mortgage or mortgages.


                                    Exh V(A)-2
<PAGE>

            (7) It has good and  indefeasible  title to,  and was the sole owner
of, such Title I Loan subject to no liens, charges,  mortgages,  participations,
encumbrances or rights of others other than liens released  simultaneously  with
such pledge.

            (8) Such Title I Loan  conforms  to the  description  thereof as set
forth on the related Title I Loan Schedule.

            (9) All payments required to be made up to the date 30 days prior to
the date such  Title I Loan is pledged  hereunder  (the  "Pledge  Date") on such
Title I Loan under the terms of the Note have been made.  The  Borrower  has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the Obligor, directly or indirectly,  for the payment of
any amount required by such Title I Loan.

            (10) The Note and the  Mortgage,  if any,  relating  to such Title I
Loan are not  subject to any  litigation,  including,  without  limitation,  any
bankruptcy or insolvency proceeding, set-off, counterclaim or defense, including
the defense of usury, nor will the operation of any of the terms of the Note and
the Mortgage, if any, or the exercise of any right thereunder, render either the
Note or the Mortgage, if any, unenforceable,  in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including the defense
of usury, and no such right of rescission,  set-off, counterclaim or defense has
been asserted with respect thereto.

            (11) Any and all  requirements  of any  federal,  state or local law
applicable  to such  Title I Loan have been  complied  with  including,  without
limitation, all consumer laws.

            (12) The  Mortgage,  if any,  relating  to such Title I Loan has not
been  satisfied,  cancelled or  subordinated,  in whole,  or rescinded,  and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part,  nor has any  instrument  been  executed  that would effect any such
release, cancellation, subordination or rescission.

            (13) The Mortgage, if any, relating to such Title I Loan is a valid,
subsisting and enforceable  lien on the Mortgaged  Property,  including the land
and all buildings on the Mortgaged Property.

            (14) The Note and the  related  Mortgage,  if any,  relating to such
Title I Loan are genuine and each is the legal,  valid and binding obligation of
the  maker  thereof,  enforceable  in  accordance  with  its  terms,  except  as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights in general and by general principles of
equity.

            (15) All parties to the Note and the Mortgage,  if any,  relating to
such Title I Loan had legal  capacity at the time to enter into the Title I Loan
and to execute and deliver the Note and the Mortgage,  if a mortgage is required
by the Title I  Regulations,  and the Note and the  Mortgage,  if any, have been
duly and properly executed by such parties.


                                    Exh V(A)-3
<PAGE>

            (16) As of the Pledge  Date,  the proceeds of such Title I Loan have
been fully disbursed and there is no requirement for future advances thereunder,
and any and all  requirements  set forth in the Title I Loan documents have been
complied with.

            (17) If a  mortgage  is  required  by the Title I  Regulations  with
respect to such Title I Loan, it has possession of a title document with respect
to such Title I Loan reflecting  that title to the Mortgaged  Property is vested
at least 50% in the Obligor under such Title I Loan.

            (18) To the  best of its  knowledge,  there is no  default,  breach,
violation or event of acceleration  existing under the Mortgage,  if any, or the
Note relating to such Title I Loan and there is no event which, with the passage
of time or with notice and/or the expiration of any grace or cure period,  would
constitute a default, breach, violation or event of acceleration, and it has not
waived any default, breach, violation or event of acceleration.

            (19) If a  mortgage  is  required  by the Title I  Regulations  with
respect  to such  Title I  Loan,  to the  best  of its  knowledge,  there  is no
proceeding  pending  for  the  total  or  partial  condemnation  of the  related
Mortgaged Property.

            (20)  The  related  Mortgage,   if  any,   contains   customary  and
enforceable  provisions  such as to render the rights and remedies of the holder
thereof  adequate  for the  realization  against the  Mortgaged  Property of the
benefits  of the  security  provided  thereby,  including,  (i) in the case of a
Mortgage  designated as a deed of trust,  by trustee's sale, and (ii) otherwise,
by judicial foreclosure.

            (21) Such  Title I Loan is a FHA Title I property  improvement  loan
(as  defined in 24 C.F.R.  Parts 201 and 202)  underwritten  by the  Borrower in
accordance with FHA requirements for the Title I loan program as set forth in 24
C.F.R.  Parts 201 and 202, and the Borrower has  submitted  such Title I Loan to
FHA for inclusion in the Title I program.

            (22) Such Title I Loan is a fixed  rate  mortgage  loan;  the stated
fixed rate of interest on such Title I Loan is at least equal the Interest  Rate
plus 300 basis points;  the Note shall mature within not less than 24 months nor
more than 20 years and 32 days; the Note is payable in monthly  installments  of
principal and interest, with interest payable in arrears, and requires a monthly
payment which is sufficient to amortize the original  principal balance over the
original term and to pay interest at the related  annual  interest rate; and the
Note does not provide for any extension of the original term.

            (23) If a  mortgage  is  required  by the Title I  Regulations  with
respect to such Title I Loan, the related Note is not, and has not been, secured
by any collateral except the lien of the corresponding Mortgage.

            (24) If a  mortgage  is  required  by the Title I  Regulations  with
respect to such Title I Loan and if the Mortgage  constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated  and  currently  so serves and is named in the  Mortgage,  or a valid
substitution   of  trustee  has  been   recorded  or  may  be  recorded  and  no
extraordinary fees or expenses are, or will become, payable by the Lender to the
trustee


                                    Exh V(A)-4
<PAGE>

under the deed of trust,  except in connection with default  proceedings
and a trustee's sale after default by the Obligor.

            (25)  The  Borrower  has  no  knowledge  of  any   circumstances  or
conditions  not reflected in the  representations  set forth  herein,  or in the
documents  delivered  to the  Custodian  pursuant to Section 2 of the  Custodial
Agreement, or, if a mortgage is required by the Title I Regulations with respect
to such Title I Loan,  in the mortgage  file with respect to the  Mortgage,  the
Mortgaged  Property or the  Obligor  which in its opinion  could  reasonably  be
expected to materially and adversely affect the value of the Mortgaged Property,
or the  marketability  of such Title I Loan or cause such Title I Loan to become
delinquent or otherwise in default.

            (26)  Such  Title  I  Loan  is  serviced  by  the  Borrower  or by a
subservicer pursuant to the terms and conditions of a subservicing  agreement to
which the Lender has consented in writing.

            (27)  All  disclosures   required  by  the  Real  Estate  Settlement
Procedures  Act, by Regulation X promulgated  thereunder  and by Regulation Z of
the Board of Governors of the Federal Reserve System promulgated pursuant to the
statute commonly known as the  Truth-in-Lending  Act and the Notice of the Right
of Rescission  required by said statute and  regulation  have been properly made
and given with respect to such Title I Loan.

            (28) Such  Title I Loan is in  respect  of a home  improvement  loan
(including improvements to existing manufactured or mobile homes that qualify as
real  property)  and is not a loan in respect of the  purchase  of  manufactured
homes or mobile  homes or the land on which  such  manufactured  homes or mobile
homes will be placed.

            (29)  Such  Title I Loan  is not  more  than  29 days  contractually
delinquent.

            (30) The proceeds of such Title I Loan have been or, with respect to
Direct Loans, will be used for improvements on the Obligor's  Mortgaged Property
in compliance with the Title I Regulations.

(c)   With respect to every  Conventional Home Improvement Loan delivered to the
      Custodian, the Borrower represents and warrants to the Lender that:

            (1) Such  Conventional  Home  Improvement  Loan and all accompanying
documents are complete and authentic and all signatures thereon are genuine.

            (2) Such  Conventional  Home Improvement Loan arose from a bona fide
loan,  complying with all applicable state and Federal laws and regulations,  to
persons  having  legal  capacity to contract  and is not subject to any defense,
set-off or counterclaim.

            (3) All amounts  represented to be payable on such Conventional Home
Improvement Loan are, in fact, payable in accordance with the provisions of such
Conventional Home Improvement Loan.


                                    Exh V(A)-5
<PAGE>

            (4) No default has occurred in any  provisions of such  Conventional
Home Improvement Loan.

            (5) The  terms  of the  Note  and the  Mortgage,  if a  Mortgage  is
required by the Conventional Home Improvement Loan Underwriting Guidelines, have
not been impaired, waived, altered or modified in any respect, except by written
instruments  reflected in the documents  delivered to the Custodian  pursuant to
Section 2 of the Custodial Agreement,  and no provision of such Note or Mortgage
has been "whited out" or erased unless such  modification  has been initialed by
each of the parties to such Conventional Home Improvement Loan. No instrument of
waiver,  alteration or modification  has been executed,  and the Obligor has not
been released from the related Mortgage,  if any, in whole or in part, except in
connection with an assumption  agreement,  which assumption agreement is part of
the  mortgage  file and the  terms  of  which  are  reflected  in the  documents
delivered to the Custodian pursuant to Section 2 of the Custodial Agreement, and
the Borrower shall allow no assumption of any Mortgage.

            (6)  Any  property  subject  to  any  security   interest  given  in
connection with such  Conventional  Home  Improvement Loan is not subject to any
encumbrance other than a stated mortgage or mortgages.

            (7) It has good and  indefeasible  title to,  and was the sole owner
of,  such  Conventional  Home  Improvement  Loan  subject to no liens,  charges,
mortgages,  participations,  encumbrances  or rights of others  other than liens
released  simultaneously  with such pledge.  description thereof as set forth on
the related Conventional Home Improvement Loan Schedule.

            (9) All payments required to be made up to the date 30 days prior to
the date such  Conventional  Home  Improvement  Loan is pledged  hereunder  (the
"Pledge Date") on such Conventional Home Improvement Loan under the terms of the
Note have been made. The Borrower has not advanced funds, or induced,  solicited
or knowingly  received any advance of funds from a party other than the Obligor,
directly  or  indirectly,  for  the  payment  of any  amount  required  by  such
Conventional Home Improvement Loan.

            (10)  The  Note  and  the  Mortgage,   if  any,   relating  to  such
Conventional Home Improvement Loan are not subject to any litigation, including,
without   limitation,   any  bankruptcy  or  insolvency   proceeding,   set-off,
counterclaim or defense,  including the defense of usury, nor will the operation
of any of the terms of the Note and the Mortgage, if any, or the exercise of any
right thereunder, render either the Note or the Mortgage, if any, unenforceable,
in  whole  or  in  part,  or  subject  to  any  right  of  rescission,  set-off,
counterclaim  or defense,  including the defense of usury,  and no such right of
rescission,  set-off,  counterclaim  or defense has been  asserted  with respect
thereto.

            (11) Any and all  requirements  of any  federal,  state or local law
applicable to such  Conventional  Home  Improvement Loan have been complied with
including, without limitation, all consumer laws.


                                    Exh V(A)-6
<PAGE>

            (12)  The  Mortgage,  if any,  relating  to such  Conventional  Home
Improvement Loan has not been satisfied, cancelled or subordinated, in whole, or
rescinded, and the Mortgaged Property has not been released from the lien of the
Mortgage,  in whole or in part, nor has any instrument  been executed that would
effect any such release, cancellation, subordination or rescission.

            (13)  The  Mortgage,  if any,  relating  to such  Conventional  Home
Improvement  Loan is a valid,  subsisting and enforceable  lien on the Mortgaged
Property, including the land and all buildings on the Mortgaged Property.

            (14) The Note and the  related  Mortgage,  if any,  relating to such
Conventional Home Improvement Loan are genuine and each is the legal,  valid and
binding  obligation of the maker  thereof,  enforceable  in accordance  with its
terms,  except as  enforceability  may be  limited  by  bankruptcy,  insolvency,
reorganization or other similar laws affecting  creditors' rights in general and
by general principles of equity.

            (15) All parties to the Note and the Mortgage,  if any,  relating to
such  Conventional Home Improvement Loan had legal capacity at the time to enter
into the Conventional  Home Improvement Loan and to execute and deliver the Note
and the Mortgage, if a mortgage is required by the Conventional Home Improvement
Loan Underwriting  Guidelines,  and the Note and the Mortgage, if any, have been
duly and properly executed by such parties.

            (16) As of the Pledge Date, the proceeds of such  Conventional  Home
Improvement  Loan have been  fully  disbursed  and there is no  requirement  for
future  advances  thereunder,  and any and all  requirements  set  forth  in the
Conventional Home Improvement Loan documents have been complied with.

            (17) If a mortgage is required by the Conventional  Home Improvement
Loan Underwriting  Guidelines with respect to such Conventional Home Improvement
Loan, it has  possession of a title  document with respect to such  Conventional
Home Improvement  Loan reflecting that title to the Mortgaged  Property is fully
vested in the Obligor under such Conventional Home Improvement Loan.

            (18) To the  best of its  knowledge,  there is no  default,  breach,
violation or event of acceleration  existing under the Mortgage,  if any, or the
Note relating to such  Conventional  Home Improvement Loan and there is no event
which,  with the passage of time or with  notice  and/or the  expiration  of any
grace or cure period, would constitute a default,  breach, violation or event of
acceleration,  and it has not waived any default,  breach, violation or event of
acceleration.

            (19) If a mortgage is required by the Conventional  Home Improvement
Loan Underwriting  Guidelines with respect to such Conventional Home Improvement
Loan, to the best of its knowledge, there is no proceeding pending for the total
or partial condemnation of the related Mortgaged Property.


                                    Exh V(A)-7
<PAGE>

            (20)  The  related  Mortgage,   if  any,   contains   customary  and
enforceable  provisions  such as to render the rights and remedies of the holder
thereof  adequate  for the  realization  against the  Mortgaged  Property of the
benefits  of the  security  provided  thereby,  including,  (i) in the case of a
Mortgage  designated as a deed of trust,  by trustee's sale, and (ii) otherwise,
by judicial foreclosure.

            (21) Such  Conventional  Home Improvement Loan is a home improvement
loan  underwritten  by the Borrower in  accordance  with the  Conventional  Home
Improvement Loan Underwriting Guidelines.

            (22)  Such  Conventional  Home  Improvement  Loan  is a  fixed  rate
mortgage  loan;  the stated  fixed rate of  interest on such  Conventional  Home
Improvement Loan is at least equal the Interest Rate plus 300 basis points;  the
Note shall  mature  within not less than 24 months nor more than 20 years and 32
days;  the Note is payable in monthly  installments  of principal  and interest,
with  interest  payable in  arrears,  and  requires a monthly  payment  which is
sufficient to amortize the original principal balance over the original term and
to pay  interest  at the related  annual  interest  rate;  and the Note does not
provide for any extension of the original term.

            (23) If a mortgage is required by the Conventional  Home Improvement
Loan Underwriting  Guidelines with respect to such Conventional Home Improvement
Loan,  the  related  Note is not,  and has not been,  secured by any  collateral
except the lien of the corresponding Mortgage.

            (24) If a mortgage is required by the Conventional  Home Improvement
Loan Underwriting  Guidelines with respect to such Conventional Home Improvement
Loan and if the Mortgage constitutes a deed of trust, a trustee,  duly qualified
under  applicable  law to serve  as  such,  has  been  properly  designated  and
currently so serves and is named in the  Mortgage,  or a valid  substitution  of
trustee  has been  recorded  or may be  recorded  and no  extraordinary  fees or
expenses  are, or will  become,  payable by the Lender to the trustee  under the
deed of trust,  except in connection  with default  proceedings  and a trustee's
sale after default by the Obligor.

            (25)  The  Borrower  has  no  knowledge  of  any   circumstances  or
conditions  not reflected in the  representations  set forth  herein,  or in the
documents  delivered  to the  Custodian  pursuant to Section 2 of the  Custodial
Agreement,  or, if a mortgage is required by the  Conventional  Home Improvement
Loan Underwriting  Guidelines with respect to such Conventional Home Improvement
Loan, in the mortgage file with respect to the Mortgage,  the Mortgaged Property
or the Obligor which in its opinion  could  reasonably be expected to materially
and adversely affect the value of the Mortgaged  Property,  or the marketability
of such  Conventional  Home  Improvement  Loan or cause such  Conventional  Home
Improvement Loan to become delinquent or otherwise in default.

            (26) Such  Conventional  Home  Improvement  Loan is  serviced by the
Borrower  or  by a  subservicer  pursuant  to  the  terms  and  conditions  of a
subservicing agreement to which the Lender has consented in writing.


                                    Exh V(A)-8
<PAGE>

            (27)  All  disclosures   required  by  the  Real  Estate  Settlement
Procedures  Act, by Regulation X promulgated  thereunder  and by Regulation Z of
the Board of Governors of the Federal Reserve System promulgated pursuant to the
statute commonly known as the  Truth-in-Lending  Act and the Notice of the Right
of Rescission  required by said statute and  regulation  have been properly made
and given with respect to such Conventional Home Improvement Loan.

            (28) Such Conventional Home Improvement Loan is in respect of a home
improvement  loan  (including  improvements  to existing  manufactured or mobile
homes  that  qualify  as  real  property)  and is not a loan in  respect  of the
purchase  of  manufactured  homes or  mobile  homes  or the  land on which  such
manufactured homes or mobile homes will be placed.

            (29) Such  Conventional  Home  Improvement  Loan is not more than 29
days contractually delinquent.

            (30) The proceeds of such  Conventional  Home  Improvement Loan have
been or, with  respect to Direct  Loans,  will be used for  improvements  on the
Obligor's Mortgaged Property.


                                    Exh V(A)-9
<PAGE>

                                                                      EXHIBIT VI

                           SELLER/AFFILIATE AGREEMENT

                   GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
                               600 Steamboat Road
                          Greenwich, Connecticut 06830

                                                            As of August 9, 1999

ContiFinancial Corporation
277 Park Avenue
New York, New York  10172

Attention:

Gentlemen:

            Reference is made to (i) the Master Repurchase  Agreement  Governing
Purchases and Sales of Assets ("Master Repurchase Agreement") dated as of August
9, 1999,  between  Greenwich  Capital  Financial  Products,  Inc.  ("Buyer") and
ContiFinancial   Corporation   ("Seller").   This  letter   agreement   ("Letter
Agreement")  confirms the agreement among Seller and  ContiMortgage  Corporation
each in its capacity as servicer ("Subservicer") and Buyer as to the matters set
forth  below.  Capitalized  terms  used  herein but not  defined  shall have the
meaning ascribed to such terms in the Master Repurchase Agreement.

1.    The Subservicer hereby represents and warrants to the Buyer that as of the
      date of execution of this Letter  Agreement and at each Purchase Date, the
      representations and warranties on Exhibit A hereto are true and correct.

2.    The Subservicer hereby acknowledges and agrees that the Buyer is the owner
      of the  Mortgage  Loans and all of the  servicing  rights  thereto and, in
      connection therewith, the Subservicer has no rights in the Mortgage Loans,
      including  the  servicing  rights  thereto,  with the  exception  of those
      limited  servicing  rights  granted to it by Buyer pursuant to this Letter
      Agreement.

3.    (a) The Subservicer is hereby  appointed as servicer of the Mortgage Loans
      pursuant to the terms of this Letter  Agreement,  which  servicing  rights
      shall be  immediately  terminable  by Buyer  upon the  earlier  of (i) the
      termination  of the Interim  Servicing  Period,  (ii) the occurrence of an
      Event of  Default  under  the  Repurchase  Agreement,  whether  or not the
      Subservicer  is in any way  implicated  in such Event of Default,  (iii) a
      Subservicer  Termination  Event  (as such  term is  defined  in  Exhibit B
      hereto), or (iv) 30 days prior written notice.

4.    (b) Upon such  termination,  the Subservicer will promptly arrange for the
      transfer of servicing  (including all funds and Servicing Records held) of
      the  specified  Mortgage


                                    Exh VI.1
<PAGE>

      Loans to the designee of the Buyer in accordance  with customary  mortgage
      banking standards for such transfers.

5.    The  Subservicer  shall service the Mortgage  Loans serviced by it for the
      benefit  of the Buyer and  their  successors  and  assigns  (as  owner) in
      accordance with the terms of the Master Repurchase Agreement and Custodial
      Agreement,  the  terms of which  are  incorporated  herein,  and  Accepted
      Servicing  Practices.  "Accepted  Servicing  Practices"  shall  mean those
      servicing  practices set forth in the Interim Servicing  Addendum attached
      as Exhibit XI to the Master Repurchase Agreement,  which Interim Servicing
      Addendum  is  incorporated  herein by  reference.  Buyer is aware that the
      Subservicer  may be  entitled  to a  servicing  fee payable by the Seller.
      Subservicer  acknowledges that Buyer is not liable to Subservicer for such
      or any other fees or expenses.

6.    If requested by either (a) Buyer at any time following an Event of Default
      of Seller under the Master Repurchase  Agreement or (b) a person or entity
      ("Subsequent Owner"), (at its sole option) which has acquired ownership of
      the related Mortgage Loans,  through or from Buyer, the Subservicer  shall
      promptly  enter  into a  market-standard  whole loan  servicing  agreement
      substantially in the form typically entered into by affiliates of New York
      investment  banks as owners of whole  loans with  respect to the  Mortgage
      Loans then serviced by it.

7.    Subservicer hereby indemnifies and holds harmless Buyer and its successors
      assigns  from and  against any losses,  liabilities,  damages,  judgments,
      costs  (including  attorney  fees) and expenses  incurred by Buyer or such
      successors or assigns in any way related to a breach by Subservicer of any
      covenant, representation or warranty of Subservicer herein.

8.    This letter Agreement is not assignable by Subservicer; may be assigned in
      whole or in part by Buyer;  and shall inure to the benefit of  Subservicer
      and Buyer and their respective successors and assigns.

9.    This Letter Agreement shall not be changed except by a written  instrument
      signed by each of the  parties,  shall be  governed  by and  construed  in
      accordance  with  the  internal  laws of the  State  of New  York  without
      reference to  principles  of conflicts of laws,  and shall be binding upon
      and inure to the benefit of the parties  and their  respective  successors
      and assigns,  provided, however that neither this Letter Agreement nor any
      rights in respect  of the  servicing  of the  Mortgage  Loans  (including,
      without  limitation,  the right to possession  of any  Servicing  Records)
      shall be assignable by  Subservicer  to any Person other than an affiliate
      of the  Subservicer  without  the prior  written  consent  of  Buyer,  and
      Subservicer  shall give Buyer prior written notice of any assignment to an
      affiliate.  The  Subservicer,  at  its  sole  cost,  may  subcontract  its
      obligations  hereunder or portions  thereof provided it remains liable for
      all  obligations  hereunder  but shall  continue  either (a) to retain all
      Servicing  Records and  documentation  necessary  to service the  Mortgage
      Loans hereunder,  or (b) to maintain authority over such Servicing Records
      and documentation in cases where transferring possession of such Servicing
      Records  and


                                    Exh VI.2
<PAGE>

      documentation  is necessary to do business with outside  counsel,  leasing
      agents and other similar third party contractors,  unless, in either case,
      Buyer otherwise agrees.


                                             Very truly yours,

                                             GREENWICH CAPITAL FINANCIAL
                                             PRODUCTS, INC.


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

ACCEPTED AND AGREED TO:

CONTIFINANCIAL CORPORATION


By:
   ----------------------------
   Name:
   Title:


CONTIMORTGAGE CORPORATION


By:
   ----------------------------
   Name:
   Title:


                                    Exh VI.3
<PAGE>


                                    EXHIBIT A

                   REPRESENTATIONS AND WARRANTIES OF SERVICER

1.   The  Subservicer is duly organized,  validly  existing and in good standing
     under  the  laws of the  state  of its  organization  and is  qualified  to
     transact  business in and is in good standing  under the laws of each state
     in which it is necessary for it to be so qualified in order to carry on its
     business as now being conducted and has all licenses  necessary to carry on
     its business as now being conducted  expect where the failure to so qualify
     or have  such  license  would  not have a  material  adverse  effect on the
     Subservicer's ability to enter into this Letter Agreement and to consummate
     the  transactions  contemplated  hereby,  on the  Mortgage  Loans or on the
     ability of  Subservicer or its assigns to enforce the Mortgage  Loans;  the
     Subservicer has full corporate power and authority to execute,  deliver and
     perform under this Letter Agreement, and to consummate the transactions set
     forth herein,  this Letter  Agreement has been fully executed and delivered
     by the Subservicer and constitutes the valid and legally binding obligation
     of the Subservicer  enforceable  against the Subservicer in accordance with
     its respective  terms,  except that (i) the  enforceability  thereof may be
     limited  by  bankruptcy,  insolvency,  moratorium,  receivership  and other
     similar laws relating to creditors' rights generally and (ii) the remedy of
     specific performance and injunctive and other forms of equitable relief may
     be subject to equitable  defenses  and such  remedies may be subject to the
     discretion of the court which any proceeding therefor may be brought;

2.   The Subservicer is not required to obtain the consent of any other party or
     obtain the consent,  license (except those licenses already obtained by the
     Subservicer  prior  to the  date of this  Letter  Agreement),  approval  or
     authorization  of,  or make  any  registration  or  declaration  with,  any
     governmental authority,  bureau or agency in connection with the execution,
     delivery, performance, validity or enforceability of this Letter Agreement.

3.   The consummation of the transactions  contemplated by this Letter Agreement
     will not result in the breach of any term or provision  of the  certificate
     of  incorporation  or by-laws of the Subservicer or result in the violation
     of any law,  rule,  regulation,  order,  judgment  or  decree  to which the
     Subservicer or its property or the Mortgage Loans are subject;

4.   The  Subservicer  is not a party to,  bound by or in breach or violation of
     any  indenture  or other  agreement  or  instrument,  or  subject  to or in
     violation  of any statute,  order or  regulation  of any court,  regulatory
     body,  administrative  agency or governmental body having jurisdiction over
     it, which materially and adversely affects, or may in the future materially
     and  adversely  affect,  the  ability of the  Subservicer  to  perform  its
     obligations under this Letter Agreement or the interest of the Buyer in any
     material respect; and

5.   There are no actions,  suits proceedings or  investigations  pending or, to
     the Subservicer's knowledge, threatened against the Subservicer, before any
     court,  regulatory  body,   administrative  agency  or  other  tribunal  or
     governmental  instrumentality  (A) asserting the  invalidity of this Letter
     Agreement,   (B)  seeking  to  prevent  the  consummation  of  any  of  the
     transactions  contemplated  by  this  letter  Agreement,  (C)  seeking  any
     determination  or ruling that might  materially  and  adversely  affect the
     performance by the Subservicer of its obligations under, or the validity or
     enforceability of, this Letter Agreement, or (D) that could have a material
     adverse effect on the Mortgage Loans.

6.   The Subservicer's  fidelity bond and errors and omissions insurance policy,
     a copy of which was  furnished to Buyer,  is in full force and effect,  and
     Subservicer  shall give Buyer at least 30 days' prior written notice of any
     change in such status.

                                    EXH. A-1
<PAGE>


                                    EXHIBIT B

                           SERVICER TERMINATION EVENT:


"Subservicer Termination Event" means the occurrence of any of the following:

1.   Any failure by  Subservicer  to make any  material  deposit into an account
     required to be made  hereunder  and the  continuance  of such failure for a
     period of one (1)  Business  Day after  Subservicer  has become  aware,  or
     should have become aware, that such deposit was required;

2.   Failure on Subservicer's part to observe or perform in any material respect
     any covenant or agreement in this Letter Agreement, which failure continues
     unremedied  for fifteen (15) days after the date on which written notice of
     such failure,  requiring the same to be remedied,  shall have been given to
     Subservicer by Custodian or Buyer or to Subservicer  and Custodian by Buyer
     or, if such remedy  cannot  reasonably  be cured within  fifteen (15) days,
     failure  on the part of the  Subservicer  to  commence  or  pursue a remedy
     within such  fifteen  days,  or failure of the  Subservicer  to  reasonably
     pursue such remedy thereafter;

3.   Any  representation  or  warranty  made  by the  Servicer  in  this  Letter
     Agreement  or any related  agreement is incorrect or untrue in any material
     respect (to the extent that any such  representation  or warranty  does not
     incorporate a materiality limitation in its terms);

4.   Any  assignment by Subservicer  of its duties or rights  hereunder,  or any
     attempt  to make such an  assignment  except as  permitted  by this  Letter
     Agreement;

5.   Any failure by Subservicer to maintain its rating, if any, as a servicer or
     originator of mortgage loans or land contracts;

6.   Any independent certified public accountant shall have issued an opinion to
     the  effect  that  the  Subservicer's  servicing  practices  have  not been
     conducted in compliance  with the Uniform Single Audit Program for Mortgage
     Bankers and that there are material exceptions;

7.   A court or other governmental authority having jurisdiction in the premises
     shall have  entered a decree or order for relief in respect of  Subservicer
     in an involuntary case under any applicable bankruptcy, insolvency or other
     similar law now or hereafter in effect, or shall have appointed a receiver,
     liquidator,   assignee,   custodian,   trustee,  sequestrator  (or  similar
     official)  of  Subservicer,  as  the  case  may  be,  for  any  substantial
     liquidation  of its  affairs,  and  such  order  remains  undischarged  and
     unstayed for at least 60 days;

8.   Subservicer  shall have  commenced  a voluntary  case under any  applicable
     bankruptcy,  insolvency or other similar law now or hereafter in effect, or
     shall have  consented to the entry of an order for relief in an involuntary
     case under any such law, or shall have  consented to the  appointment of or
     taking possession by a receiver,  liquidator,  assignee, trustee, custodian
     or  sequestrator  (or other  similar  official) of  Subservicer  or for any
     substantial part of its property, or shall have made any general assignment
     for the benefit of its  creditors,  or shall have failed to, or admitted in
     writing its  inability  to, pay its debts as they become due, or shall have
     taken any corporate action in furtherance of the foregoing.


                                    EXH. B-1
<PAGE>

                                                                     EXHIBIT VII

                       Assignment and Conveyance Agreement

            This  is  an  Assignment  and  Conveyance   Agreement   ("Conveyance
Agreement") made this 9th day of August, 1999, among Greenwich Capital Financial
Products,  Inc.,  ContiFinancial  Corporation  (the "Seller") and  ContiMortgage
Corporation (the "Servicer").  The Buyer and the Seller wish to enter, from time
to time, into transactions  (each, a "Transaction")  pursuant to which the Buyer
shall  agree to purchase  Assets  (defined  in the Master  Repurchase  Agreement
referred  to  below)   originated  by   ContiMortgage   Corporation,   ContiWest
Corporation or ContiTrade Services,  L.L.C. (each as applicable,  the "Company")
and  thereafter  purchased  by the Seller  pursuant to the  Agreement  for Sale,
Purchase and Servicing of Assets by and between Seller and ContiTrade  Services,
L.L.C.  dated as of March 1, 1998, the Master  Agreement for Sale,  Purchase and
Servicing of Mortgages by and between Seller and ContiWest  Corporation dated as
of September 18, 1998, and the Master Agreement for Sale, Purchase and Servicing
of  Mortgages  by and  between  Seller  and  Servicer,  as  seller,  dated as of
September  18,  1998  (each  as  applicable,   the  "Acquisition  and  Servicing
Agreement"),  between the Seller and each Company, as applicable and serviced by
the Servicer  pursuant to the applicable  Acquisition  and Servicing  Agreement,
such Assets  purchased by the Buyer,  "Purchased  Assets"),  with a simultaneous
agreement by the Seller to repurchase  such  Purchased  Assets on the Repurchase
Date,  in  accordance  with the terms and  conditions  of the Master  Repurchase
Agreement  Governing  Purchases  and Sales of  Assets  (the  "Master  Repurchase
Agreement"),  dated as of August 9, 1999, between the Buyer and the Seller and a
request  for  purchase  (the  "Purchase  Request")  by the  Seller  (as to  each
Transaction,  the related Purchase Request,  the related  Transaction Notice (as
defined below) and the Master Repurchase  Agreement are referred to collectively
herein as the "Repurchase Agreement"). The custody of the Purchased Assets shall
be maintained  by  Manufacturers  and Traders  Trust  Company (the  "Custodian")
pursuant to that certain  Custodial  Agreement  dated as of August 9, 1999 among
Buyer,  Seller and Custodian.  All terms not otherwise defined herein shall have
the meanings set forth in the Master Repurchase Agreement.

            In  consideration  of the mutual promises  contained  herein and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby  acknowledged,  the  parties  hereto  agree  that  the  Purchased  Assets
identified on the schedule attached hereto shall be subject to the terms of this
Conveyance Agreement.

                                   WARRANTIES

            1. The Company and the Seller  warrant and  represent  that attached
hereto as Exhibit One is a true, accurate and complete copy of each Purchase and
Servicing Agreement which agreements are in full force and effect as of the date
hereof and have not been waived, amended or modified in any respect nor have any
notices of termination been given thereunder.

                                   ASSIGNMENT

            2. The Seller hereby  assigns to the Buyer all of its right,  title,
and interest in, to, and under the  Acquisition  and Servicing  Agreement to the
extent of the Purchased Assets.  Notwithstanding  the Seller's assignment herein
of all of its right,  title and interest,  in, to, and under the Acquisition and
Servicing  Agreement to the extent of the Purchased Assets, the Seller shall not
be relieved of its obligations under the Acquisition and Servicing Agreement (as
incorporated  hereunder  and made a part hereof) to the extent of the  Purchased
Assets and shall be the sole obligor to the Servicer  thereunder with respect to
the Purchased Assets.

            3. From and after the date  hereof and until the Seller  repurchases
the Purchased  Assets from the Buyer pursuant to the Repurchase  Agreement,  the
Buyer hereby  authorizes  and directs the Servicer to remit all Income from, and
all proceeds of, the Purchased Assets to the Seller,  and to otherwise deal with
the Seller in all respects pursuant to the applicable  Acquisition and Servicing
Agreement (each as incorporated  hereunder and made a part hereof), in each case
until  otherwise  notified by the Buyer.  The Buyer shall so notify the Servicer
only in the event that the Buyer  determines that the Seller is in default under
the Master Repurchase  Agreement or the related agreements.  The receipt of such
Income and  proceeds  by the Seller  shall not create nor imply any  interest or
right  whatsoever of the Seller in or to the Purchased  Assets or such Income or
proceeds.  The Seller shall have no right to terminate  the Servicer as Servicer
of the  Purchased  Assets  or amend the  applicable  Acquisition  and  Servicing
Agreement  without the prior written  consent of the Buyer (which  consent shall
not be unreasonably withheld).

                                  GOVERNING LAW

            4. THIS  CONVEYANCE  AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE  LAWS OF THE  STATE OF NEW  YORK  WITHOUT  REGARD  TO ANY  CONFLICTS  OF LAW
PROVISIONS,  AND THE OBLIGATIONS,  RIGHTS AND REMEDIES OF THE PARTIES  HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT
TO THE EXTENT PREEMPTED BY FEDERAL LAW.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have executed this Conveyance
Agreement the day and year first above written.

                                         GREENWICH CAPITAL FINANCIAL
                                         PRODUCTS, INC.


                                         By:
                                             --------------------------------
                                             Name:
                                             Title:


                                         CONTIFINANCIAL CORPORATION


                                         By:
                                             --------------------------------
                                             its Member


                                         By:
                                             --------------------------------
                                             Name:
                                             Title:


                                         ACKNOWLEDGED AND AGREED TO BY:
                                         CONTIMORTGAGE CORPORATION


                                         By:
                                             --------------------------------
                                             Name:
                                             Title:



<PAGE>



                          Schedule 1 to Assignment and

                              Conveyance Agreement


                                 Asset Schedule

<PAGE>


                          Exhibit One to Assignment and
                              Conveyance Agreement

                        Purchase and Servicing Agreements

<PAGE>

                                                                    EXHIBIT VIII
                               Opinion of Counsel


                                     (date)

Greenwich Capital Financial Products, Inc.
address

Dear Sirs and Mesdames:

            We  have  acted  as  counsel  to   ContiFinancial,   a   [_________]
corporation  (the "Seller"),  with respect to certain matters in connection with
that  certain  Master  Repurchase  Agreement  Governing  Purchases  and Sales of
Assets, dated as of August 9, 1999 (the "Agreement"),  by and between the Seller
and Greenwich Capital Financial Products, Inc. (the "Buyer"), provided for under
the Transaction Documents described below, whereby Seller may sell to Buyer, and
Buyer will purchase from, and agree to retransfer to, Seller, upon certain terms
and  conditions  set forth in the  Agreement,  Asset  [originated or acquired by
Seller].  Capitalized  terms used in this Opinion not otherwise  defined  herein
have the same meanings set forth in the Agreement.

            In [our] [my] capacity as counsel to Seller,  [we] [I] have examined
the following documents as executed in connection with the Agreement:

            1.    Master Repurchase  Agreement  Governing Purchases and Sales of
                  Assets,  dated as of  _______________,  199_ (defined above as
                  the "Agreement");

            2.    Custodial Agreement dated _______________,  199_ between Buyer
                  and the related Custodian;

            3.    Uniform Commercial Code ("UCC") Financing Statements listed on
                  Schedule  1   (collectively,   the  "Financing   Statements"),
                  attached to this  letter,  naming the Seller as debtor and the
                  Buyer as  secured  party and  describing  the  Collateral  (as
                  defined in the Agreement) as to which  security  interests may
                  be perfected  by filing under the UCC of the States  listed on
                  Schedule 1 (the "Filing Collateral"),  which I understand will
                  be filed in the  filing  offices  listed  on  Schedule  1 (the
                  "Filing Offices");

            4.    Power of  Attorney  from Seller to Buyer (the form of which is
                  attached to the Agreement as Exhibit III);

            5.    Servicing  Agreement  dated  _______________,   199_,  between
                  Seller and Servicer; and

            6.    UCC Search  Reports  listed on  Schedule  2,  attached to this
                  letter, as to UCC Financing Statements (collectively, the "UCC
                  Search Report");

            7.    Articles of Incorporation of [ ] , certified by....

            8.    Certificate of Good Standing for Seller issued by the

            9.    Bylaws and Minute Book of Seller

            10.   Such other  documents,  records  and papers as we have  deemed
                  necessary and relevant as a basis for this opinion.

            The documents listed in paragraphs 1-6 are collectively  referred to
as the  "Transaction  Documents."  The  documents  list in  paragraphs  8-11 are
collectively  referred to as the  "Organizational  Documents." All the documents
listed in paragraph 1-11 are collectively referred to as the "Documents."

            [We] [I] have assumed the authenticity of all documents submitted to
us/me as originals,  the  genuineness of all  signatures,  the legal capacity of
natural persons and the conformity to the originals of all documents.

            Based  upon the  foregoing  and upon such  investigation  as we have
deemed necessary, it is [our] [my] opinion that:

            1. The Seller is a [________]  corporation  duly organized,  validly
existing and in good standing under the laws of [__________] and is qualified to
transact business in, and is in good standing under, the laws of the state[s] of
[ states ].

            2. The Seller has the corporate  power and authority to carry on its
business as presently conducted,  to own and operate the property and assets now
being  operated  by it,  to  engage  in  the  transactions  contemplated  by the
Transaction  Documents and all requisite  corporate  power,  authority and legal
right to  execute,  perform and deliver  Transaction  Documents  and observe the
terms and conditions of such instruments. The Seller has all requisite corporate
power sell and pledge assets,  to borrow and to grant a security interest in the
Collateral  pursuant to the  Agreement,  and to perform  all of its  obligations
under the Agreement.

            3. The  execution and delivery of the  Transaction  Documents by the
Seller, and the performance of the obligations  contemplate  therein,  including
the sale of  Purchased  Assets by the Seller  and the  pledge of the  Collateral
under the  Agreement,  have been duly and validly  authorized  by all  necessary
corporate action on the part of the Seller.  Each of Transaction  Documents have
been  executed  and  delivered  by the Seller and are legal,  valid and  binding
agreements  enforceable in accordance  with their  respective  terms against the
Seller, subject to bankruptcy laws and other similar laws of general application
affecting  rights of creditors  and subject to the  application  of the rules of
equity,  including those  respecting the  availability of specific  performance,
none of which will  materially  interfere  with the  realization of the benefits
provided  thereunder  or with the Buyer's  security  interest  in the  Purchased
Assets.

            4. No  approval,  consent,  authorization,  order of,  notice to, or
filing or  registration  with or other act by or in respect of any  Governmental
Authority or any other Person is required or  necessary in  connection  with the
Transactions  contemplated  by this  Agreement  or the  granting  of a  security
interest thereunder, or with the execution, delivery,  performance,  validity or
enforceability  of this  Agreement  or any  Facility  Document.  No  approval of
holders of capital stock of Seller other than such as have been obtained and are
in effect are required under applicable law to consummate the Agreement,  and no
approvals are required pursuant to a shareholders agreement or other Contractual
Obligation which is binding on Seller in order to consummate the Agreement.

            5. Each of the  Transaction  Documents to which Seller is a party is
the valid and  binding  obligation  of  Seller,  enforceable  against  Seller in
accordance  with  its  respective  terms,  except  as may  be  limited  by:  (i)
bankruptcy, insolvency, reorganization,  moratorium and other laws affecting the
rights  of  creditors  generally  of  the  collection  of  debtor's  obligations
generally,  and  (ii)  general  principles  of  equity  (regardless  of  whether
considered in a proceeding in equity or at law).

            6. The execution, delivery and performance by the Seller of, and the
consummation of the transactions  contemplated by, the Transaction  Documents do
not and will not (a)  violate or conflict  with any  provision  of the  Seller's
Articles of Incorporation or by-laws, (b) violate,  conflict with or require the
authorization,  consent,  approval or action of any  governmental  or regulatory
agency or authority  under any applicable  law, rule or regulation or ordinance,
(c) violate or conflict with any order, writ,  injunction or decree of any court
or  Governmental  Authority or agency or any arbitral  award  applicable  to the
Seller of which I/we have  knowledge  (after due inquiry) or (d) conflict  with,
result in a breach of, constitute a default under, require any consent under, or
result in the acceleration or required  prepayment of any Indebtedness  pursuant
to the terms of, mortgage,  indenture,  contract,  agreement, lease, instrument,
restriction,  judgment, ruling, injunction,  decree or other obligation or court
order of which I/we have knowledge  (after due inquiry) to which the Seller is a
party or by which it is bound or to which it or any of its  properties or assets
is subject,  or (except for the Liens created pursuant to the Agreement)  result
in the  creation  or  imposition  of any Lien,  charge or  encumbrance  upon any
Property of the Seller pursuant to the terms of any such agreement or instrument
to which the Seller is a party or by which any of its properties is bound.

            7.  There  is  no  action,  suit,  proceeding  or  investigation  or
litigation  before any court,  public  board or body  pending or, to the best of
[our] [my] knowledge, after due inquiry, threatened against the Seller which, in
[our] [my] judgment,  either in any one instance or in the  aggregate,  would be
reasonably  likely to result in any material  adverse change in the  properties,
business or financial  condition,  or prospects of the Seller or in any material
impairment  of the  right or  ability  of the  Seller  to carry on its  business
substantially  as now conducted or in any material  liability on the part of the
Seller or which would draw into question the validity of  Transaction  Documents
or the  Assets  or of any  action  taken or to be taken in  connection  with the
transactions contemplated thereby, or which would be reasonably likely to impair
materially  the  ability  of the  Seller  to  perform  under  the  terms  of the
Transaction Documents or the Assets.

            8. The  Agreement is effective to create,  in favor of the Buyer,  a
valid security interest under the UCC in all of the right, title and interest of
the  Seller  in, to and under the  Collateral  as  collateral  security  for all
obligations  of the payment or  performance  of Seller  under or pursuant to the
Transaction  Documents,  which  security  interests,  upon  filing  of  the  UCC
Financing  Statements  will be  perfected  under the UCC,  except  that (a) such
security interests will continue in Collateral after its sale, exchange or other
disposition  only to the extent  provided in Section  9-306 of the UCC,  (b) the
security  interests in Collateral in which the Seller  acquires rights after the
commencement of a case under the Bankruptcy Code in respect of the Seller may be
limited by Section 552 of the Bankruptcy Code.

            9. When the Mortgage Notes are delivered to the Custodian,  endorsed
in blank by a duly  authorized  officer of the  Seller,  the  security  interest
referred to in paragraph 8 above in the Mortgage  Notes will  constitute a fully
perfected first priority security  interest in all right,  title and interest of
the Seller therein, in the Mortgage Note.

            10. (a) Upon the filing of financing statements on Form UCC-1 naming
the Buyer as "Secured  Party" and the Seller as  "Debtor",  and  describing  the
Collateral,  in the  jurisdictions  and recording  offices  listed on Schedule 1
attached hereto,  the security interests referred to in paragraph 9 above are in
the  appropriate  form for filing with the states  listed on Schedule 1 and will
constitute fully perfected  security interests under the UCC in all right, title
and  interest  of the  Seller  in, to and under  such  Collateral,  which can be
perfected by filing under the UCC.

            (b) The UCC Search Report sets forth the proper  filing  offices and
the proper  debtors  necessary to identify those Persons who have on file in the
jurisdictions  listed on Schedule 1  financing  statements  covering  the Filing
Collateral  as of the dates and times  specified  on  Schedule 2. Except for the
matters listed on Schedule 2, the UCC Search Report identifies no Person who has
filed  in  any  Filing  Office  a  financing  statement  describing  the  Filing
Collateral prior to the effective dates of the UCC Search Report.

            [11. The Assignments of Mortgage are in recordable form,  except for
the  insertion  of the name of the  assignee,  and upon the name of the assignee
being  inserted,  are acceptable for recording under the laws of the state where
each related Mortgaged Property is located.]

            12. The Seller is duly registered as a [____________]  in each state
in which Assets were  originated to the extent such  registration is required by
applicable law, and has obtained all other licenses and  governmental  approvals
in each  jurisdiction to the extent that the failure to obtain such licenses and
approvals would render any Asset unenforceable or would materially and adversely
affect the ability of the Seller to perform any of its obligations under, or the
enforceability of, the Asset Documents.

            [13. Assuming that all other elements necessary to render a Mortgage
Loan legal,  valid,  binding and enforceable were present in connection with the
execution,  delivery and performance of each Mortgage Loan (including completion
of the  entire  Mortgage  Loan  fully,  accurately  and in  compliance  with all
applicable  laws, rules and regulations) and assuming further that no action was
taken in  connection  with  the  execution,  delivery  and  performance  of each
Mortgage Loan  (including in connection  with the sale of the related  Mortgaged
Property) that would give rise to a defense to the legality,  validity,  binding
effect and  enforceability  of such Mortgage Loan,  nothing in the forms of such
Mortgage  Loans,  as attached  hereto as Exhibit A, would  render such  Mortgage
Loans other than legal, valid, binding and enforceable.]

            [14. Assuming their validity,  binding effect and  enforceability in
all other  respects  (including  completion  of the entire  Mortgage Loan fully,
accurately and in compliance with all applicable laws,  rules and  regulations),
the forms of  Mortgage  Loans  attached  hereto as  Exhibit A are in  sufficient
compliance with ________ law and Federal  consumer  protection laws so as not to
be rendered void or voidable at the election of the Mortgagor thereunder.]


                                                  Very truly yours,

<PAGE>


                        Seller's Underwriting Guidelines


                                   EXHIBIT IX
<PAGE>


                                                                   EXHIBIT IX(A)


                      Underwriting Guidelines Modifications

1.    No loans to  facilitate  REO or to rewrite loans  delinquent  more than 60
      days.

2.    Homes listed for sale are not eligible for refinancing transactions.

3.    Property conditions must be average or better as reported by the appraiser
      or as observable from photos in file.

4.    No mixed use after 8/31/99.

5.    Retention   Loans  (as  defined  in  the  Purchase   Facility)  must  meet
      Underwriting  Guidelines (as modified) except that the appraisal may be up
      to 18 months old.

6.    Purchase  money  transactions  require  verification  of  downpayment  and
      verification of source.

7.    No escrow holdbacks for completion or repair of property.

8.    If the proposed  mortgagor owns the property  under a land  contract,  the
      appraised  value used to compute the LTV for the proposed  loan may not be
      higher than the mortgagor's land contract  purchase price unless it can be
      demonstrated (via utility or tax invoices or otherwise) that the mortgagor
      has owned the property for at least 12 months.

9.    If credit is to be given for  mortgagor  payments  under a lease option or
      land contract,  the payments must be  independently  verified via a source
      other  than the  lessor  or the  seller  under  the land  contract  (e.g.,
      cancelled checks).


                                   EXH. IX(A)-1
<PAGE>


                                                                       EXHIBIT X


                                Asset Tape Fields

<PAGE>


                                                                      EXHIBIT XI


                           Interim Servicing Addendum

            Reference is hereby made to the Purchase Facility for a statement of
the terms  thereof.  All terms used in this  Exhibit XI which are defined in the
Purchase  Facility and which are not otherwise  defined in this Agreement  shall
have the same meanings herein as set forth therein.

            Subsection 11.01 Interim Servicer.

            The  Interim  Servicer,  as  independent  contract  servicer,  shall
interim  service and  administer  the  Mortgage  Loans in  accordance  with this
Agreement  during  the  Interim  Servicing  Period and shall have full power and
authority,  acting  alone,  to do or  cause  to be done  any and all  things  in
connection  with such interim  servicing  and  administration  which the Interim
Servicer may deem necessary or desirable and  consistent  with the terms of this
Agreement.

            Consistent  with the terms of this Agreement,  the Interim  Servicer
may  waive,  modify  or vary any term of any  Mortgage  Loan or  consent  to the
postponement  of strict  compliance  with any such term or in any  manner  grant
indulgence to any Mortgagor if in the Interim Servicer's  reasonable and prudent
determination  such waiver,  modification,  postponement  or  indulgence  is not
materially adverse to the Purchaser;  provided, however, that unless the Interim
Servicer has obtained the prior written  consent of the  Purchaser,  the Interim
Servicer  shall not permit any  modification  with respect to any Mortgage  Loan
that would  change the  Mortgage  Interest  Rate,  defer or forgive  the payment
thereof  or of any  principal  or  interest  payments,  reduce  the  outstanding
principal  amount  (except for actual  payments of principal),  make  additional
advances  of  additional  principal  or extend the final  maturity  date on such
Mortgage Loan.  Without  limiting the  generality of the foregoing,  the Interim
Servicer shall continue, and is hereby authorized and empowered,  to execute and
deliver on behalf of itself, and the Purchaser,  all instruments of satisfaction
or  cancellation,  or of  partial  or full  release,  discharge  and  all  other
comparable  instruments,  with respect to the Mortgage Loans and with respect to
the Mortgaged  Property.  If reasonably  required by the Interim  Servicer,  the
Purchaser shall furnish the Interim  Servicer with any powers of attorney at the
Purchaser's  option and other  documents  necessary or appropriate to enable the
Interim Servicer to carry out its interim  servicing and  administrative  duties
under this Agreement.

            In interim  servicing  and  administering  the Mortgage  Loans,  the
Interim Servicer shall employ  procedures  including  collection  procedures and
exercise the same care that it  customarily  employs and  exercises in servicing
and  administering  mortgage  loans for its own account and mortgage loans which
are securitized by Purchaser in a rated transaction, giving due consideration to
accepted  mortgage  servicing  practices of prudent lending  institutions  (such
practices,  "Accepted  Servicing  Practices").  If  Interim  Servicer  elects to
utilize  a  subservicer  to  perform  any or all of  Interim  Servicer's  duties
hereunder,  Interim  Servicer  shall  remain  liable as though  such duties were
performed directly by Interim Servicer and Interim Servicer shall be responsible
for the payment of any and all fees of any such subservicer.

            Subsection 11.02 Collection of Mortgage Loan Payments.

<PAGE>

            Continuously  from the date hereof until the  principal and interest
on all  Mortgage  Loans are paid in full,  the Interim  Servicer  shall  proceed
diligently  to collect all payments due under each  Mortgage  Loan when the same
shall become due and payable and shall, to the extent such  procedures  shall be
consistent with this Agreement,  follow such collection procedures as it follows
with respect to mortgage loans comparable to the Mortgage Loans and held for its
own  account.   Further,  the  Interim  Servicer  shall  take  special  care  in
ascertaining  and  estimating  annual ground rents,  taxes,  assessments,  water
rates,  fire and  hazard  insurance  premiums  and all other  charges  that,  as
provided  in the  Mortgage,  will  become  due and  payable  to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.

            Subsection 11.03 Realization Upon Defaulted Mortgage Loans.

            (a) The Interim Servicer shall use its best efforts, consistent with
the procedures  that the Interim  Servicer would use in servicing  loans for its
own account, to foreclose upon or otherwise  comparably convert the ownership of
such  Mortgaged  Properties as come into and continue in default and as to which
no satisfactory  arrangements can be made for collection of delinquent  payments
pursuant to Subsection 11.01. The Interim Servicer shall use its best efforts to
realize  upon  defaulted  Mortgage  Loans in such a manner as will  maximize the
receipt of principal and interest by the Purchaser,  taking into account,  among
other things, the timing of foreclosure proceedings. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage,  the  Interim  Servicer  shall not be  required  to expend its own funds
toward the  restoration  of such property in excess of $2,000 unless it consults
with the Purchaser with respect to a course of action to be taken and determines
in its  discretion  (i) that such  restoration  will  increase  the  proceeds of
liquidation of the related Mortgage Loan to the Purchaser after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by the
Interim Servicer  through  Insurance  Proceeds or Liquidation  Proceeds from the
related  Mortgaged  Property,  as contemplated in Subsection 11.05. In the event
that any payment due under any  Mortgage  Loan is not paid when the same becomes
due and  payable,  or in the  event the  Mortgagor  fails to  perform  any other
covenant or obligation under the Mortgage Loan and such failure continues beyond
any applicable  grace period,  the Interim Servicer shall take such action as it
shall deem to be in the best  interest of the  Purchaser.  In the event that any
payment due under any Mortgage  Loan remains  delinquent  for a period of ninety
(90) days or more,  the Interim  Servicer shall notify the Purchaser and receive
instruction as to whether to commence foreclosure proceedings in accordance with
Accepted Servicing Practices.  The Interim Servicer shall be responsible for all
costs and expenses  incurred by it in any such proceedings;  provided,  however,
that it shall be entitled to  reimbursement  thereof from the related  Mortgaged
Property, as contemplated in Subsection 11.05.

            (b)  Notwithstanding  the foregoing  provisions  of this  Subsection
11.03,  with respect to any Mortgage  Loan as to which the Interim  Servicer has
received actual notice of, or has actual knowledge of, the presence of any toxic
or hazardous  substance on the related  Mortgaged  Property the Interim Servicer
shall not either (i) obtain title to such  Mortgaged  Property as a result of or
in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or
take any other action,  with respect to, such Mortgaged Property if, as a result
of any such action,  the Purchaser would be considered to hold title to, to be a
mortgagee-in-possession  of,  or to be an owner or  operator  of such  Mortgaged
Property  within  the  meaning  of  the  Comprehensive  Environmental  Response,
Compensation  and  Liability  Act of 1980,  as amended from time to time, or any
comparable law, unless the Interim  Servicer has immediately  consulted with the
Purchaser  with  respect  to a course of action to be taken in  accordance  with
Accepted Servicing Practices.

<PAGE>

            The cost of the  environmental  audit  report  contemplated  by this
Subsection  11.03  shall be advanced  by the  Interim  Servicer,  subject to the
Interim Servicer's right to be reimbursed therefor from the Custodial Account as
contemplated in Subsection 11.05.

            If the Interim Servicer  determines,  as described above, that it is
in the best  economic  interest  of the  Purchaser  to take such  actions as are
necessary to bring any such Mortgaged  Property into  compliance with applicable
environmental  laws,  or to take such  action with  respect to the  containment,
clean-up or remediation of hazardous substances,  hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the  Interim  Servicer  shall  take  such  action  as it deems to be in the best
economic   interest  of  the  Purchaser.   The  cost  of  any  such  compliance,
containment,  cleanup or remediation  shall be advanced by the Interim Servicer,
subject to the  Interim  Servicer's  right to be  reimbursed  therefor  from the
Custodial Account as contemplated in Subsection 11.05.

            (c)  Proceeds   received  in  connection  with  any  Final  Recovery
Determination,  as well as any recovery  resulting from a partial  collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following  order of priority:  first, to reimburse the Interim
Servicer for any related unreimbursed Servicing Advances; second, to accrued and
unpaid  interest  on the  Mortgage  Loan,  to the  date  of the  Final  Recovery
Determination; and third, as a recovery of principal of the Mortgage Loan.

            Subsection 11.04  Establishment of Custodial  Accounts;  Deposits in
Custodial Accounts.

            The Interim  Servicer shall  segregate and hold all funds  collected
and received  pursuant to each  Mortgage Loan separate and apart from any of its
own funds and general assets.

            The Interim  Servicer shall deposit in the Custodial  Account within
24 hours of receipt,  and retain therein the following  payments and collections
received by it  subsequent  to the Cut-off  Date, or received by it prior to the
Cut-off Date but allocable to a period subsequent thereto, other than in respect
of principal  and  interest on the  Mortgage  Loans due on or before the Cut-off
Date:

            (i) all  payments  on account of  principal  on the  Mortgage  Loans
including any Principal Prepayments and any prepayment penalties or premiums;

            (ii) all payments on account of interest on the Mortgage Loans;

            (iii) all Liquidation Proceeds;

            (iv)  all  Insurance  Proceeds  including  amounts  required  to  be
deposited  pursuant to  Subsections  11.10 and 11.11,  other than proceeds to be
held in the  Escrow  Account  and  applied to the  restoration  or repair of the
Mortgaged  Property or released to the Mortgagor in accordance  with the Interim
Servicer's normal servicing procedures, the loan documents or applicable law;

<PAGE>

            (v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the  Mortgagor  in  accordance  with the Interim  Servicer's
normal servicing procedures, the loan documents or applicable law;

            (vi) all proceeds of any Mortgage  Loan  repurchased  in  accordance
with  Subsections  7.03 and 7.04 and all amounts required to be deposited by the
Seller in connection with shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Subsection 7.03;

            (vii) any amounts  required to be deposited by the Interim  Servicer
pursuant to Subsection  11.11 in connection  with the  deductible  clause in any
blanket  hazard  insurance  policy.  Such deposit shall be made from the Interim
Servicer's own funds, without reimbursement therefor;

            (viii) any amounts  required to be deposited by the Interim Servicer
in connection with any REO Property pursuant to Subsection 11.13; and

            (ix) any amounts  required to be deposited in the Custodial  Account
pursuant to Subsections 11.19 or 11.20.

The  foregoing  requirements  for  deposit  in the  Custodial  Account  shall be
exclusive,  it being understood and agreed that, without limiting the generality
of the  foregoing,  payments in the nature of late payment  charges,  assumption
fees, to the extent permitted by Subsection 11.01, and the Interim Servicing Fee
as permitted by Section 11.21,  need not be deposited by the Interim Servicer in
the Custodial Account.  Such Custodial Account shall be an Eligible Account. Any
interest  or  earnings  on  funds  deposited  in the  Custodial  Account  by the
depository institution shall accrue to the benefit of the Purchaser. The Interim
Servicer  shall give notice to the  Purchaser of the  location of the  Custodial
Account when established and prior to any change thereof.

            Subsection 11.05 Permitted Withdrawals From the Custodial Account.

            The Purchaser,  as owner of the Custodial Account, shall be entitled
to  withdraw  any and all funds  deposited  in the  Custodial  Account  as owner
thereto.  All  withdrawals  from  the  Custodial  Account  shall  be made by the
Purchaser and the Interim Servicer shall have no withdrawal  rights with respect
thereto.

            Simultaneously  with the  delivery  of the  Remittance  Report,  the
Interim  Servicer  shall  deliver  an  invoice  to  the  Purchaser,  along  with
reasonable documentation, requesting payment for the following:

<PAGE>

            (i) to pay the Interim Servicer for unreimbursed Servicing Advances,
the Interim  Servicer's  right to payment  pursuant to this  subclause  (i) with
respect to any  Mortgage  Loan being  limited to related  Liquidation  Proceeds,
Condemnation  Proceeds,  Insurance  Proceeds  and such  other  amounts as may be
collected by the Interim  Servicer from the  Mortgagor or otherwise  relating to
the Mortgage Loan, it being understood that, in the case of such  reimbursement,
the  Interim  Servicer's  right  thereto  shall be prior  to the  rights  of the
Purchaser,  except that,  where the Interim Servicer is required to repurchase a
Mortgage Loan, pursuant to Subsection 7.03, the Interim Servicer's right to such
payment shall be  subsequent  to the payment to the Purchaser of the  Repurchase
Price pursuant to Subsection  7.03 and all other amounts  required to be paid to
the Purchaser with respect to such Mortgage Loans;

            (ii) to pay the Interim  Servicer with respect to each Mortgage Loan
that has been  repurchased  pursuant to  Subsection  7.03 all  amounts  received
thereon and not distributed as of the date on which the related Repurchase Price
is determined; and

            (iii) to pay, or to reimburse  the Interim  Servicer for advances in
respect of,  expenses  incurred in connection with any Mortgage Loan pursuant to
Subsection  11.03(b),  but only to the extent of amounts  received in respect of
the Mortgage Loans to which such expense is attributable.

            Absent a good faith dispute on the amount set forth on such invoice,
the Purchaser shall remit to the Interim  Servicer the amount  specified in such
invoice within five (5) Business Days of receipt thereof by the Purchaser.

            In the  event  that any  amount  is  mistakenly  deposited  into the
Custodial  Account by the Interim  Servicer,  the Purchaser  shall withdraw such
amount  from the  Custodial  Account  and remit it to the  Interim  Servicer  as
quickly  as  possible,  and if  possible  on the  date  the  Purchaser  receives
notification from the Interim Servicer of such mistaken deposit.

            Subsection  11.06  Establishment  of Escrow  Accounts;  Deposits  in
Escrow Accounts.

            The Interim  Servicer shall  segregate and hold all funds  collected
and received  pursuant to each Mortgage Loan which  constitute  Escrow  Payments
separate  and  apart  from any of its own  funds and  general  assets  and shall
establish and maintain one or more Escrow Accounts,  in the form of time deposit
or demand  accounts.  The creation of any Escrow  Account  shall be evidenced by
Escrow Account Letter Agreement in the form of Exhibit 8.

            The Interim Servicer shall deposit in the Escrow Account or Accounts
within  24 hours  of  receipt,  and  retain  therein,  (i) all  Escrow  Payments
collected on account of the Mortgage Loans,  for the purpose of effecting timely
payment of any such items as  required  under the terms of this  Agreement,  and
(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property. The Interim Servicer shall make withdrawals therefrom
only to effect such payments as are required under this Agreement,  and for such
other purposes as shall be as set forth or in accordance with Subsection  11.08.
The Interim  Servicer  shall be entitled  to retain any  interest  paid on funds
deposited  in the  Escrow  Account  by the  depository  institution  other  than
interest on escrowed  funds  required by law to be paid to the Mortgagor and, to
the extent required by law, the Interim  Servicer shall pay interest on escrowed
funds to the Mortgagor  notwithstanding  that the Escrow Account is non-interest
bearing or that interest paid thereon is insufficient for such purposes.

            Subsection 11.07 Permitted Withdrawals From Escrow Account.

<PAGE>

            Withdrawals  from  the  Escrow  Account  may be made by the  Interim
Servicer (i) to effect  timely  payments of ground  rents,  taxes,  assessments,
water rates,  hazard insurance  premiums and comparable items, (ii) to reimburse
the Interim Servicer for any Servicing Advance made by the Interim Servicer with
respect to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which  represent late payments or  collections of Escrow  Payments
thereunder,  (iii) to refund to the  Mortgagor any funds as may be determined to
be overages,  (iv) for transfer to the Custodial  Account in accordance with the
terms of this  Agreement,  (v) for  application  to restoration or repair of the
Mortgaged Property,  (vi) to pay to the Interim Servicer, or to the Mortgagor to
the extent  required by law,  any  interest  paid on the funds  deposited in the
Escrow  Account,  or (vii) to clear and  terminate  the  Escrow  Account  on the
termination of this Agreement.

            Subsection 11.08 Payment of Taxes, Insurance and Other Charges.

            With  respect to each  Mortgage  Loan,  the Interim  Servicer  shall
maintain  accurate  records  reflecting  the  status  of  ground  rents,  taxes,
assessments,  water rates and other  charges which are or may become a lien upon
the Mortgaged  Property and the status of fire and hazard insurance coverage and
shall  obtain,  from time to time,  all bills for the  payment of such  charges,
including  insurance  renewal premiums and shall effect payment thereof prior to
the  applicable  penalty  or  termination  date  and at a time  appropriate  for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and  accumulated
by the Interim  Servicer in amounts  sufficient  for such  purposes,  as allowed
under the terms of the  Mortgage  and  applicable  law.  To the extent  that the
Mortgage  does not  provide for Escrow  Payments,  the  Interim  Servicer  shall
determine  that any such  payments  are made by the  Mortgagor  at the time they
first  become due. The Interim  Servicer  assumes  full  responsibility  for the
timely  payment of all such bills and shall effect  timely  payments of all such
bills  irrespective  of the Mortgagor's  faithful  performance in the payment of
same or the making of the Escrow  Payments and shall make  advances from its own
funds to effect such payments.

            Upon the termination of the Interim Servicing Period or the transfer
of servicing  with respect to any Mortgage  Loan,  the successor  servicer shall
reimburse  the  Interim  Servicer  for amounts  the  Interim  Servicer  actually
expended as interim  servicer  pursuant to this  Agreement for which the Interim
Servicer  would have  otherwise  been entitled to be reimbursed  and which would
otherwise have been recovered by the Interim Servicer pursuant to this Agreement
but for the appointment of the successor servicer.

            Subsection 11.09 Transfer of Accounts.

            The Interim  Servicer  may  transfer  the  Custodial  Account or the
Escrow Account to a different  depository  institution  from time to time.  Such
transfer shall be made only upon  obtaining the consent of the Purchaser,  which
consent shall not be unreasonably  withheld.  In any case, the Custodial Account
and Escrow Account shall be Eligible Accounts.

            Subsection 11.10 Maintenance of Hazard Insurance.

<PAGE>

            The Interim  Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard  insurance  with  extended  coverage as is customary in the
area where the  Mortgaged  Property  is  located in an amount  which is at least
equal to the  lesser of (i) the amount  necessary  to fully  compensate  for any
damage  or loss to the  improvements  which  are a part  of such  property  on a
replacement cost basis or (ii) the outstanding principal balance of the Mortgage
Loan,  in each case in an amount not less than such  amount as is  necessary  to
prevent the Mortgagor  and/or the Mortgagee  from becoming a co-insurer.  If the
Mortgaged  Property is in an area  identified on a Flood Hazard  Boundary Map or
Flood  Insurance  Rate Map issued by the Flood  Emergency  Management  Agency as
having special flood hazards and such flood  insurance has been made  available,
the  Interim  Servicer  will cause to be  maintained  a flood  insurance  policy
meeting the  requirements  of the current  guidelines  of the Federal  Insurance
Administration  with a  generally  acceptable  insurance  carrier,  in an amount
representing  coverage not less than the lesser of (i) the outstanding principal
balance of the Mortgage  Loan or (ii) the maximum  amount of insurance  which is
available  under the National Flood  Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended.  The Interim Servicer also shall maintain on
any REO Property,  fire and hazard insurance with extended coverage in an amount
which is at least equal to the lesser of (i) the maximum  insurable value of the
improvements  which  are a part  of  such  property  and  (ii)  either  (A)  the
outstanding principal balance of the related Mortgage Loan at the time it became
an REO Property plus accrued interest at the Mortgage  Interest Rate and related
Servicing  Advances  with respect to each First Lien  Mortgage  Loan or (B) with
respect to each Second Lien Mortgage Loan, the sum of the outstanding  principal
balance of the First Lien Mortgage Loan and the outstanding principal balance of
the Second Lien  Mortgage  Loan plus accrued  interest at the Mortgage  Interest
Rate and related  Servicing  Advances,  liability  insurance  and, to the extent
required and  available  under the National  Flood  Insurance Act of 1968 or the
Flood Disaster Protection Act of 1973, as amended,  flood insurance in an amount
as provided above.  Pursuant to Subsection  11.04, any amounts  collected by the
Interim  Servicer  under any such policies other than amounts to be deposited in
the Escrow  Account and applied to the  restoration  or repair of the  Mortgaged
Property or REO Property,  or released to the  Mortgagor in accordance  with the
Interim  Servicer's  normal  servicing  procedures,  shall be  deposited  in the
Custodial Account.  Any cost incurred by the Interim Servicer in maintaining any
such insurance  shall not, for the purpose of calculating  distributions  to the
Purchaser,  be added to the unpaid  principal  balance of the  related  Mortgage
Loan,  notwithstanding  that the terms of such  Mortgage  Loan so permit.  It is
understood and agreed that no earthquake or other  additional  insurance need be
required by the Interim  Servicer of the  Mortgagor  or  maintained  on property
acquired in respect of the Mortgage Loan, other than pursuant to such applicable
laws and  regulations as shall at any time be in force and as shall require such
additional  insurance.  All  such  policies  shall  be  endorsed  with  standard
mortgagee clauses with loss payable to the Interim Servicer,  or upon request to
the  Purchaser,  and shall provide for at least thirty days prior written notice
of any cancellation, reduction in the amount of, or material change in, coverage
to the Interim  Servicer.  The Interim  Servicer  shall not  interfere  with the
Mortgagor's  freedom  of choice in  selecting  either his  insurance  carrier or
agent,  provided,  however,  that the Interim Servicer shall not accept any such
insurance  policies from insurance  companies  unless such  companies  currently
reflect a General Policy Rating of A:VI or better in Best's Key Rating Guide and
are  licensed to do business in the state  wherein the  property  subject to the
policy is located.

            Subsection  11.11  Maintenance  of  Mortgage  Impairment   Insurance
Policy.

<PAGE>

            In the event that the Interim  Servicer  shall obtain and maintain a
mortgage  impairment  or blanket  policy  issued by an  insurer  that has a Best
rating of A:VI insuring  against  hazard  losses on all of Mortgaged  Properties
securing the Mortgage Loans,  then, to the extent such policy provides  coverage
in an amount  equal to the amount  required  pursuant  to  Subsection  11.10 and
otherwise  complies with all other requirements of Subsection 11.10, the Interim
Servicer shall  conclusively  be deemed to have satisfied its obligations as set
forth in Subsection  11.10, it being  understood and agreed that such policy may
contain a deductible  clause,  in which case the Interim  Servicer shall, in the
event  that  there  shall  not have been  maintained  on the  related  Mortgaged
Property or REO Property a policy  complying with  Subsection  11.10,  and there
shall have been one or more losses which would have been covered by such policy,
deposit in the  Custodial  Account the amount not  otherwise  payable  under the
blanket  policy  because  of such  deductible  clause.  In  connection  with its
activities as servicer of the Mortgage  Loans,  the Interim  Servicer  agrees to
prepare and present,  on behalf of the Purchaser,  claims under any such blanket
policy in a timely  fashion in  accordance  with the terms of such policy.  Upon
request of the  Purchaser,  the Interim  Servicer shall cause to be delivered to
the  Purchaser  a certified  true copy of such  policy and a statement  from the
insurer  thereunder  that  such  policy  shall  in no  event  be  terminated  or
materially modified without thirty days prior written notice to the Purchaser.

            Subsection 11.12 Fidelity Bond, Errors and Omissions Insurance.

            The Interim Servicer shall maintain,  at its own expense,  a blanket
fidelity bond and an errors and omissions  insurance policy, with broad coverage
with  responsible  companies that would meet the  requirements  of Fannie Mae or
Freddie Mac on all officers,  employees or other persons  acting in any capacity
with regard to the Mortgage Loans to handle funds,  money,  documents and papers
relating to the  Mortgage  Loans.  The  fidelity  bond and errors and  omissions
insurance shall be in the form of the Mortgage  Banker's  Blanket Bond and shall
protect and insure the  Interim  Servicer  against  losses,  including  forgery,
theft,  embezzlement,  fraud,  errors and omissions  and negligent  acts of such
persons.  Such fidelity bond shall also protect and insure the Interim  Servicer
against losses in connection with the failure to maintain any insurance policies
required  pursuant  to this  Agreement  and the  release  or  satisfaction  of a
Mortgage  Loan  without  having  obtained  payment  in full of the  indebtedness
secured  thereby.  No provision of this Subsection  11.12 requiring the fidelity
bond and errors and omissions  insurance  shall  diminish or relieve the Interim
Servicer from its duties and  obligations  as set forth in this  Agreement.  The
minimum  coverage  under any such bond and  insurance  policy  shall be at least
equal to the  corresponding  amounts  required  by Fannie  Mae in the Fannie Mae
Servicing  Guide or by Freddie Mac in the Freddie  Mac  Interim  Servicers'  and
Servicers'  Guide.  Upon request of the  Purchaser,  the Interim  Servicer shall
cause to be  delivered  to the  Purchaser a certified  true copy of the fidelity
bond and insurance  policy and a statement  from the surety and the insurer that
such  fidelity  bond or  insurance  policy  shall in no event be  terminated  or
materially modified without thirty days' prior written notice to the Purchaser.

            Subsection 11.13 Title, Management and Disposition of REO Property.

            In the event that title to the  Mortgaged  Property  is  acquired in
foreclosure or by deed in lieu of  foreclosure,  the deed or certificate of sale
shall be taken in the name of the person designated by the Purchaser,  or in the
event such person is not  authorized or permitted to hold title to real property
in the state where the REO Property is located,  or would be adversely  affected
under the "doing  business" or tax laws of such state by so holding  title,  the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be  consistent  with an  opinion  of counsel  obtained  by the  Interim
Servicer  from an attorney  duly licensed to practice law in the state where the
REO Property is located. Any Person or Persons holding such title other than the
Purchaser shall  acknowledge in writing that such title is being held as nominee
for the benefit of the Purchaser.

<PAGE>

            The  Interim  Servicer  shall  either  itself  or  through  an agent
selected by the Interim Servicer, manage, conserve, protect and operate each REO
Property (and may temporarily rent the same) in the same manner that it manages,
conserves,  protects and operates other foreclosed property for its own account,
and in the same manner  that  similar  property in the same  locality as the REO
Property is managed.  The Interim  Servicer  shall cause each REO Property to be
inspected  promptly upon the  acquisition  of title thereto and shall cause each
REO Property to be inspected at least annually thereafter.  The Interim Servicer
shall make or cause to be made a written  report of each such  inspection.  Such
reports  shall be  retained in the  Mortgage  File and copies  thereof  shall be
forwarded by the Interim  Servicer to the Purchaser.  The Interim Servicer shall
use its best  efforts to dispose of the REO  Property  as soon as  possible  and
shall sell such REO  Property in any event  within one year after title has been
taken to such REO Property,  unless the Interim Servicer  determines,  and gives
appropriate  notice to the Purchaser,  that a longer period is necessary for the
orderly  liquidation  of such REO Property.  If a period longer than one year is
necessary  to sell any REO  property,  (i) the  Interim  Servicer  shall  report
monthly to the  Purchaser  as to the  progress  being  made in selling  such REO
Property  and (ii) if, with the  written  consent of the  Purchaser,  a purchase
money  mortgage  is taken in  connection  with such sale,  such  purchase  money
mortgage shall name the Interim Servicer as mortgagee,  and a separate servicing
agreement  between the Interim  Servicer and the Purchaser shall be entered into
with respect to such purchase money mortgage.

            The Interim Servicer shall deposit or cause to be deposited,  within
twenty  four (24)  hours of  receipt,  in the  Custodial  Account  all  revenues
received  with  respect to the  related REO  Property  and shall  advance  funds
necessary  for the  proper  operation,  management  and  maintenance  of the REO
Property,  including the cost of maintaining  any hazard  insurance  pursuant to
Subsection  11.10 hereof and the fees of any managing  agent acting on behalf of
the Interim Servicer. The Purchaser shall reimburse any such advance pursuant to
Subsection  11.05. The Interim  Servicer shall  separately  account for each REO
Property and any amounts received with respect thereto.

            The Interim Servicer shall furnish to the Purchaser on the fifteenth
calendar day of each month or the next following  Business Day if such fifteenth
day is not a Business Day, an operating statement for each REO Property covering
the  operation  of each REO  Property for the  previous  month.  Such  operating
statement shall be accompanied by such other  information as the Purchaser shall
reasonably request.

            Each REO Disposition shall be carried out by the Interim Servicer at
such price and upon such terms and  conditions as the Interim  Servicer deems to
be in the best interest of the Purchaser only with the prior written  consent of
the  Purchaser.  If as of the date title to any REO Property was acquired by the
Interim Servicer there were  outstanding  unreimbursed  Servicing  Advances with
respect to the REO Property,  the Interim  Servicer,  upon an REO Disposition of
such  REO  Property,   shall  be  entitled  to  reimbursement  for  any  related
unreimbursed  Servicing  Advances from proceeds received in connection with such
REO Disposition. The proceeds from the REO Disposition shall be deposited in the
Custodial  Account  within twenty four hours of receipt and the Purchaser  shall
thereafter  reimburse  such  unreimbursed  Servicing  Advances  to  the  Interim
Servicer.

            Subsection 11.14 [Reserved]

<PAGE>

            Subsection 11.15 Remittance Reports.

            No later than the  fifteenth  calendar day of each month or the next
following  Business  Day if such 15th  calendar  day is not a Business  Day, the
Interim  Servicer  shall  furnish to the Purchaser or its designee in electronic
form,  and by hard  copy,  the  monthly  data  for the  prior  month in form and
substance acceptable to the Purchaser, together with such other information with
respect  to the  Mortgage  Loans as the  Purchaser  may  reasonably  require  to
allocate  distributions made pursuant to this Agreement and provide  appropriate
statements with respect to such  distributions.

            Subsection 11.16 Statements to the Purchaser.

            Upon request of the Purchaser,  and not later than the fifteenth day
of each month,  the  Interim  Servicer  shall  forward to the  Purchaser  or its
designee a statement  prepared by the Interim  Servicer setting forth the status
of the  Custodial  Account as of the close of business on such date and showing,
for the period covered by such statement,  the aggregate amount of deposits into
the Custodial Account of each category of deposit specified in Subsection 11.04.

            Subsection 11.17 Real Estate Owned Reports.

            Together with the statement  furnished pursuant to Subsection 11.02,
with respect to any REO  Property,  the Interim  Servicer  shall  furnish to the
Purchaser a statement covering the Interim Servicer's efforts in connection with
the sale of such REO Property and any rental of such REO Property  incidental to
the sale thereof for the previous month,  together with the operating statement.
Such statement  shall be accompanied by such other  information as the Purchaser
shall reasonably request.

            Subsection 11.18 Liquidation Reports.

            Upon  the  foreclosure  sale  of  any  Mortgaged   Property  or  the
acquisition  thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure,
the Interim  Servicer  shall submit to the Purchaser a  liquidation  report with
respect to such Mortgaged Property.

            Subsection 11.19 Assumption Agreements.

<PAGE>

            The Interim  Servicer  shall,  to the extent it has knowledge of any
conveyance or prospective  conveyance by any Mortgagor of the Mortgaged Property
(whether by absolute  conveyance or by contract of sale,  and whether or not the
Mortgagor  remains or is to remain  liable  under the  Mortgage  Note and/or the
Mortgage),  exercise its rights to accelerate the maturity of such Mortgage Loan
under any "due-on-sale" clause applicable thereto;  provided,  however, that the
Interim  Servicer  shall not exercise any such rights if  prohibited by law from
doing  so. If the  Interim  Servicer  reasonably  believes  it is  unable  under
applicable law to enforce such "due-on-sale"  clause, the Interim Servicer shall
enter  into an  assumption  agreement  with the  person  to whom  the  Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which such
person  becomes  liable under the Mortgage Note and, to the extent  permitted by
applicable state law, the Mortgagor remains liable thereon.  Where an assumption
is allowed pursuant to this Subsection 11.01, the Interim Servicer is authorized
to enter into a substitution of liability  agreement with the person to whom the
Mortgaged  Property has been conveyed or is proposed to be conveyed  pursuant to
which the  original  Mortgagor  is released  from  liability  and such Person is
substituted as Mortgagor and becomes liable under the related Mortgage Note. Any
such  substitution  of  liability  agreement  shall be in lieu of an  assumption
agreement.

            In connection with any such assumption or substitution of liability,
the Interim Servicer shall follow the  underwriting  practices and procedures of
prudent mortgage lenders in the state in which the related Mortgaged Property is
located and  Accepted  Servicing  Practices.  With respect to an  assumption  or
substitution  of liability,  Mortgage  Interest  Rate, the amount of the Monthly
Payment,  and the final  maturity date of such Mortgage Note may not be changed.
The Interim  Servicer shall notify the Purchaser that any such  substitution  of
liability  or  assumption  agreement  has been  completed by  forwarding  to the
Purchaser  the original of any such  substitution  of  liability  or  assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes,  be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof.

            Notwithstanding  the foregoing  paragraphs of this Subsection or any
other provision of this Agreement,  the Interim  Servicer shall not be deemed to
be in default,  breach or any other  violation of its  obligations  hereunder by
reason  of  any  assumption  of a  Mortgage  Loan  by  operation  of  law or any
assumption  which the Interim Servicer may be restricted by law from preventing,
for any reason  whatsoever.  For  purposes of this  Subsection  11.19,  the term
"assumption" is deemed to also include a sale of the Mortgaged  Property subject
to the Mortgage that is not  accompanied  by an assumption  or  substitution  of
liability agreement.

            Subsection  11.20  Satisfaction of Mortgages and Release of Mortgage
Files.

            Upon the payment in full of any Mortgage Loan, or the receipt by the
Interim  Servicer of a  notification  that payment in full will be escrowed in a
manner  customary for such purposes the Interim  Servicer will act in accordance
with  Accepted  Servicing  Practices.  In  addition,  upon  the  request  of the
Purchaser at any time,  the Interim  Servicer  shall notify the Purchaser of any
Mortgage Loans which have been paid in full or as to which the Interim  Servicer
has received  notification  that a payoff in full will be made.  Upon request by
the Interim Servicer, the Purchaser, shall promptly release the related mortgage
documents to the Interim  Servicer and the Interim  Servicer  shall  prepare and
process any satisfaction or release.  No expense incurred in connection with any
instrument of satisfaction  or deed of  reconveyance  shall be chargeable to the
Custodial Account or the Purchaser.

            In the event the Interim  Servicer  satisfies or releases a Mortgage
without  having  obtained  payment  in full of the  indebtedness  secured by the
Mortgage or should it otherwise prejudice any right the Purchaser may have under
the mortgage instruments, the Interim Servicer, upon written demand, shall remit
to the Purchaser the then outstanding  principal balance of the related Mortgage
Loan by deposit  thereof in the Custodial  Account.  The Interim  Servicer shall
maintain the fidelity bond insuring the Interim Servicer against any loss it may
sustain with respect to any Mortgage Loan not  satisfied in accordance  with the
procedures set forth herein.

<PAGE>

            From  time  to  time  and  as  appropriate   for  the  servicing  or
foreclosure  of the  Mortgage  Loan the  Purchaser  shall,  upon  request of the
Interim Servicer and delivery to the Purchaser of a servicing  receipt signed by
a Servicing Officer,  release the requested portion of the Mortgage File held by
the Purchaser to the Interim Servicer. Such servicing receipt shall obligate the
Interim Servicer to return the related Mortgage  documents to the Purchaser when
the need therefor by the Interim Servicer no longer exists,  unless the Mortgage
Loan has been liquidated and the Liquidation  Proceeds  relating to the Mortgage
Loan have been  deposited in the Custodial  Account or the Mortgage File or such
document  has been  delivered to an  attorney,  or to a public  trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially  or  non-judicially,  and the Interim  Servicer has  delivered to the
Purchaser a  certificate  of a Servicing  Officer  certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated,  the servicing
receipt shall be released by the Purchaser to the Interim Servicer.

            Subsection 11.21 Servicing Compensation.

            As compensation  for its services  hereunder,  the Interim  Servicer
shall be entitled to retain from  interest  payments on the  Mortgage  Loans the
amounts  provided for as the Interim  Servicing Fee for such calendar month. The
Interim  Servicer  shall  be  required  to pay all  expenses  incurred  by it in
connection with its servicing  activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for.

            Subsection 11.22 Notification of Adjustments.

            On each  Adjustment  Date, the Interim  Servicer shall make interest
rate  adjustments  for each Adjustable Rate Mortgage Loan in compliance with the
requirements  of the related  Mortgage and Mortgage Note.  The Interim  Servicer
shall  execute and deliver the notices  required by each  Mortgage  and Mortgage
Note  regarding  interest  rate  adjustments.  The Interim  Servicer  also shall
provide  timely  notification  to the  Purchaser  of  all  applicable  data  and
information  regarding such interest rate adjustments and the Interim Servicer's
methods of implementing  such interest rate  adjustments.  Upon the discovery by
the Interim  Servicer or the Purchaser  that the Interim  Servicer has failed to
adjust a Mortgage  Interest Rate or a Monthly  Payment  pursuant to the terms of
the related Mortgage Note and Mortgage,  the Interim Servicer shall  immediately
deposit in the  Custodial  Account from its own funds the amount of any interest
loss caused thereby without reimbursement therefor.

            Subsection 11.23 Statement as to Compliance.

<PAGE>

            The Interim Servicer will deliver to the Purchaser not later than 90
days following the end of each fiscal year of the Interim Servicer,  which as of
the  Closing  Date ends on the last day in December in each  calendar  year,  an
Officers'  Certificate stating, as to each signatory thereof,  that (i) a review
of the  activities  of the Interim  Servicer  during the  preceding  year and of
performance under this Agreement has been made under such officers'  supervision
and (ii) to the best of such  officers'  knowledge,  based on such  review,  the
Interim  Servicer has  fulfilled  all of its  obligations  under this  Agreement
throughout  such year, or, if there has been a default in the fulfillment of any
such  obligation,  specifying  each such  default  known to such officer and the
nature and status  thereof.  Copies of such  statement  shall be provided by the
Purchaser to any Person  identified as a  prospective  purchaser of the Mortgage
Loans.

            Subsection 11.24 Independent Public Accountants' Servicing Report.

            Not later than 90 days  following the end of each fiscal year of the
Interim  Servicer,  the Interim  Servicer  at its expense  shall cause a firm of
independent  public  accountants  (which may also render  other  services to the
Interim  Servicer)  which is a member of the  American  Institute  of  Certified
Public  Accountants  to furnish a statement to the  Purchaser or its designee to
the effect that such firm has examined certain documents and records relating to
the servicing of the Mortgage  Loans under this  Agreement or of mortgage  loans
under pooling and servicing  agreements  (including  the Mortgage Loans and this
Agreement) substantially similar one to another (such statement to have attached
thereto a schedule  setting forth the pooling and servicing  agreements  covered
thereby) and that, on the basis of such examination  conducted  substantially in
compliance  with the Uniform Single  Attestation  Program for Mortgage  Bankers,
such firm confirms that such  servicing  has been  conducted in compliance  with
such pooling and servicing agreements except for such significant  exceptions or
errors in  records  that,  in the  opinion  of such  firm,  the  Uniform  Single
Attestation  Program for Mortgage Bankers requires it to report.  Copies of such
statement  shall be  provided by the  Purchaser  to any Person  identified  as a
prospective purchaser of the Mortgage Loans.

            Subsection 11.25 Access to Certain Documentation.

            The  Interim   Servicer  shall  provide  to  the  Office  of  Thrift
Supervision,  the FDIC and any  other  federal  or state  banking  or  insurance
regulatory  authority that may exercise  authority over the Purchaser  access to
the documentation  regarding the Mortgage Loans serviced by the Interim Servicer
required by  applicable  laws and  regulations.  Such  access  shall be afforded
without  charge,  but only upon  reasonable  request and during normal  business
hours at the  offices  of the  Interim  Servicer.  In  addition,  access  to the
documentation will be provided to the Purchaser and any Person identified to the
Interim Servicer by the Purchaser without charge, upon reasonable request during
normal business hours at the offices of the Interim Servicer.

            Subsection  11.26  Reports  and  Returns  to  be  Filed  by  Interim
Servicer.

            The Interim  Servicer  shall comply with Code rules and  regulations
and other  applicable  laws and prepare and report  information,  statements  or
other filings required to be delivered to any  governmental  taxing authority or
to any  Purchaser  pursuant to any  applicable  law with respect to the Mortgage
Loans and the  transactions  contemplated  hereby in  accordance  with  Accepted
Servicing  Practices.  In  addition,  the  Interim  Servicer  shall  provide the
Purchaser  with such  information  concerning the Mortgage Loans as is necessary
for the Purchaser to prepare its federal  income tax return as any Purchaser may
reasonably request from time to time.

<PAGE>


            In  accordance  with  Accepted  Servicing  Practices,   the  Interim
Servicer shall file information  reports with respect to the receipt of mortgage
interest  received  in  a  trade  or  business,   reports  of  foreclosures  and
abandonments  of any  Mortgaged  Property and  information  returns  relating to
cancellation of indebtedness income with respect to any Mortgaged Property.