Exhibit 10.2



               MORTGAGE WAREHOUSING CREDIT AND SECURITY AGREEMENT

                          Dated as of December 24, 2001

                                      Among

                                PW FUNDING INC.,

                       CAMBRIDGE HEALTHCARE FUNDING INC.,
                                       and

                        LARSON FINANCIAL RESOURCES, INC.,
                                    Borrowers



                               FLEET NATIONAL BANK
                                      Agent


                                       and


                   THE LENDERS NAMED HEREIN FROM TIME TO TIME
                (INCLUDING FLEET NATIONAL BANK IN SUCH CAPACITY)
                                     Lenders






                               Up to $100,000,000


<PAGE>




               MORTGAGE WAREHOUSING CREDIT AND SECURITY AGREEMENT
               --------------------------------------------------


        THIS  MORTGAGE  WAREHOUSING  CREDIT AND  SECURITY  AGREEMENT is made and
entered into as of the _____ day of  __________,  2001,  by and among PW FUNDING
INC., a Delaware  corporation  ("PWF"),  CAMBRIDGE  HEALTHCARE  FUNDING  INC., a
Delaware corporation ("Cambridge"),  and LARSON FINANCIAL RESOURCES, INC., a New
Jersey  corporation  ("Larson"),  (hereinafter,  PW,  Cambridge  and  Larson are
referred to singly as a "Borrower" and collectively as the  "Borrowers"),  FLEET
NATIONAL  BANK as a  Lender  (as  hereinafter  defined)  and as  agent  (in such
capacity, the "Agent") for itself and the other Lenders, and such Lenders.

        FOR GOOD AND  VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of
which are hereby acknowledged, the parties agree as follows:

1.      BACKGROUND.

        1.1 Defined Terms.  Capitalized  terms used in this Agreement  which are
not otherwise defined herein are defined either in Exhibit A, or in another Loan
Document, as provided in Exhibit A.

        1.2  Establishment  of Facility.  The Borrowers  have requested that the
Lenders establish this secured mortgage  warehousing  facility (the "Facility"),
the proceeds of the  Warehousing  Advances made under which shall be used by the
respective  Borrowers to fund Eligible Loans. The Borrowers shall be jointly and
severally  liable for all  Obligations  hereunder,  regardless of which Borrower
requested any particular  Warehousing Advance or provided any particular item of
Collateral hereunder.

        1.3 Guarantor.  Each Guarantor shall guaranty the Obligations subject to
the terms and conditions of their respective Guaranties.

        1.4  General.  Unless  otherwise  specified in the Loan  Documents:  (i)
references in a Loan Document to "Sections,"  "Exhibits," and "Schedules" are to
sections,  exhibits, and schedules in and to such Loan Document, (ii) references
in a Loan Document to any document,  instrument,  or agreement (a) shall include
all exhibits,  schedules,  and other attachments  thereto, (b) shall include all
documents, instruments, or agreements issued or executed in replacement thereof,
to the extent permitted hereby, and (c) shall mean such document, instrument, or
agreement,  or  replacement or predecessor  thereto,  as amended,  supplemented,
restated, or otherwise modified from time to time to the extent permitted hereby
and in effect at any given  time,  (iii)  wherever  from the  context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine,  feminine,  or neuter
gender shall include the masculine,  the feminine,  and the neuter,  (iv) unless
explicitly  set forth to the  contrary,  a reference to a  "Subsidiary"  means a
Subsidiary of a Borrower or a Subsidiary of such Subsidiary,  and a reference to
an "Affiliate"  means a reference to an Affiliate of a Borrower,  (v) titles and
captions of  Sections,  subsections,  and clauses in any Loan  Document  are for
convenience  only,  and  neither  limit  nor  amplify  the  provisions  of  this
Agreement,   (vi)  unless  otherwise  indicated,  all  references  to  time  are
references  to  Boston,  Massachusetts,  time,  (vii)  all  references  to money
(including  the  symbol  "$")  are to  lawful  currency  of the  United  States,
references to "including" mean including  without limiting the generality of any
description preceding that word, (viii)



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the rule of construction that references to general items that follow references
to specific  items are limited to the same type or character  of those  specific
items is not  applicable in the Loan  Documents,  (ix)  references to any Person
include that Person's heirs,  personal  representatives,  successors,  trustees,
receivers,  and permitted  assigns,  and (x) references to any Legal Requirement
include every  amendment or supplement to it, rule and regulation  adopted under
it, and successor or replacement for it,.

        1.5 Accounting  Principles.  All accounting and financial  terms used in
the Loan Documents and the compliance with each financial covenant therein shall
be determined in accordance  with GAAP, and all accounting  principles  shall be
applied on a consistent  basis so that the  accounting  principles  in a current
period are  comparable  in all  material  respects to those  applied  during the
preceding  comparable period. The Borrowers shall notify the Agent of any change
in GAAP from that in effect on the date hereof which would in any way effect the
operation  of any  covenant in any Loan  Documents  (including  covenants  which
relate to Persons  other  than the  Borrowers,  such as PWF and the  Guarantors)
whereupon,  the Agent and the Borrowers  shall  attempt for a reasonable  period
(not to exceed ten (10) Business Days unless the Agent and the Borrower agree to
extend such time period) to agree upon  appropriate  amendments  to the affected
covenants to eliminate such effect and to produce  equivalent  results,  failing
which,  for purposes of  calculating  such financial  covenants,  GAAP will mean
generally accepted  accounting  principles on the date just prior to the date on
which any such change in GAAP became effective.


2. LOAN PROVISIONS.

        2.1 The Facility.

                2.1.1 Subject to the terms and conditions of this Agreement, the
        Lenders agree to make Warehousing Advances to Borrowers from the Closing
        Date to the Business Day immediately preceding the Maturity Date, during
        which period each Borrower may borrow,  repay and reborrow in accordance
        with the  provisions  of this  Agreement.  The  aggregate  amount of all
        Warehousing  Advances  outstanding  from  time  to  time  hereunder  may
        hereinafter  collectively  be referred  to as the "Loan." The  aggregate
        principal  amount of the Loan outstanding at any one time may not exceed
        Warehousing  Commitment  Amount.  While a  Default  or Event of  Default
        exists,  the  Lenders  may  refuse  to make any  additional  Warehousing
        Advances to Borrowers.  All  Warehousing  Advances  under this Agreement
        constitute a single indebtedness,  and all of the Collateral is security
        for  the  Notes  and  for  the  performance  of all of the  Obligations.
        Warehousing Advances will be made either to PWF, Cambridge or Larson, as
        requested  by any of PWF,  Cambridge  or  Larson,  but each  Warehousing
        Advance,  whether made to PWF, Cambridge or Larson,  will be deemed made
        to or for the  benefit  of all of  them,  and all of them,  jointly  and
        severally,  are obligated to repay any Warehousing  Advances made to any
        of them.  With respect to its obligation to repay  Warehousing  Advances
        made to another Borrower, each Borrower agrees to the terms set forth in
        Exhibit D.

                2.1.2  Maximum  Amount  of  Facility.  Subject  to the terms and
        conditions  below,  the maximum  amount of the Facility shall not exceed
        the Warehousing  Commitment Amount.  Any



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        Warehousing Advances under the Facility shall be made by the Lenders pro
        rata in accordance with each Lender's Commitment Percentage.

                2.1.3 Limitations on Advances In addition to the limitations set
        forth on Exhibit E or  elsewhere  in this  Agreement,  each  Warehousing
        Advance to fund a Multifamily  Property or a Health Care Facility  shall
        be limited to the lesser of (x) the  Mortgage  Note  Amount,  or (y) the
        Committed Purchase Price amount.

                2.1.4 Outstanding  Balance of the Loan. In the event at any time
        the outstanding  principal  balance of the Loan should exceed the lesser
        of  (x)  the  Warehousing   Commitment   Amount  or  (y)  the  aggregate
        Warehousing  Collateral  Value  of  all  Eligible  Loans  against  which
        Warehousing  Advances are then  outstanding,  the Borrowers  shall repay
        such  excess  amount  on  demand  to the  Agent so that the  outstanding
        principal  balance of the Facility is in  compliance  with the terms and
        provisions hereof.

        2.2 Term of Loan. The Loan shall mature and become due and payable,  and
shall be repaid  (together with all accrued and unpaid interest  thereon) by the
Borrowers in full, on the Maturity Date.

        2.3 Warehousing Advances.

                2.3.1 To obtain a Warehousing  Advance under this  Agreement,  a
        Borrower must deliver to Agent, not later than 1 Business Day before the
        Business Day on which such Borrower desires the Warehousing  Advance,  a
        completed  and signed  request for a Warehousing  Advance  ("Warehousing
        Advance Request"), on the then current form approved by Agent.

                2.3.2 Subject to the delivery of a Warehousing  Advance Request,
        and the  satisfaction  of the  conditions  set forth in Sections 5.1 and
        5.2, a Borrower may obtain a Warehousing  Advance  under this  Agreement
        upon compliance with the procedures set forth in this Section and in the
        applicable  Exhibit  B,  including  delivery  to Agent  of all  required
        Collateral  Documents.  Agent's  current  forms of  Warehousing  Advance
        Request are set forth in Exhibit C. Upon not less than 3 Business  Days'
        prior Notice to the Borrowers,  Agent may modify its form of Warehousing
        Advance  Request and any other  Exhibit  referred to in this  Section to
        conform to current legal  requirements or Agent or any Lender  practices
        and,  as so  modified,  those  Exhibits  will be  deemed  a part of this
        Agreement.

        2.4 Interest Rate and Payment Terms. All Warehousing Advances made under
the Facility  shall be payable as to interest and principal in  accordance  with
the provisions of this Agreement and the Notes. This Agreement also provides for
interest at a Default Rate,  Late Charges and  prepayment  rights and fees.  All
payments for the account of Lenders shall be applied to the respective  accounts
of the Lenders in accordance with each Lender's Commitment Percentage. The Agent
will  disburse  such  payments to the Lenders on the date of receipt  thereof if
received prior to 10:00 a.m. on such date and, if not, on the next Business Day.
Any and all interest rate selection and conversion  provisions in this Agreement
are to be  administered  by the Agent and to be allocated on a pro rata basis to
the Note held by each Lender based upon such Lender's Commitment Percentage.



                                      -4-
<PAGE>



                2.4.1 Interest Rate.  Principal  amounts  outstanding  under the
        Loan shall bear  interest  at the  following  rates,  at the  respective
        Borrower's selection, subject to the conditions and limitations provided
        for in this Agreement: (i) Variable Rate or (ii) LIBOR Rate.

                2.4.2 Selection To Be Made. A Borrower  requesting a Warehousing
        Advance shall select,  and  thereafter  may change the selection of, the
        applicable  interest rate, from the alternatives  otherwise provided for
        in this Agreement,  by giving Agent a Notice of Rate  Selection:  (i) at
        the time of the  request  for such  Warehousing  Advance,  (ii) at least
        three (3) Business  Days prior to the end of the then  current  Interest
        Period  applicable  to an  outstanding  LIBOR  Advance,  or (iii) on any
        Business Day on which a Borrower desires to convert an outstanding LIBOR
        Rate Advance to a Variable Rate Advance.

                2.4.3  Notice.  In  connection  with a request for a Warehousing
        Advance,  the  requesting  Borrower shall give to the Agent a "Notice of
        Rate  Selection"  which shall be a written  notice,  given by telecopier
        (with authorized signature), or by telephone if immediately confirmed by
        such  a  written  notice,  from  an  Authorized  Representative  of  the
        Borrowers which: (i) shall be irrevocable; (ii) is received by Agent not
        later than 10:00 o'clock A.M.: (a) if a LIBOR Rate is selected, at least
        three (3)  Business  Days prior to the first  Business  Day  immediately
        preceding the Interest  Period to which such selection is to apply,  (b)
        if a Variable Rate is selected,  on the first day of the Interest Period
        to which it applies; and (iii) as to each selected interest rate option,
        sets forth the aggregate principal amount(s) to which such interest rate
        option(s)  shall apply and the  Interest  Period(s)  applicable  to each
        LIBOR Advance.

                2.4.4 If No Notice.  If a Borrower  fails to select an  interest
        rate option in  accordance  with the  foregoing  prior to a  Warehousing
        Advance,  or prior to the last day of the applicable  Interest Period of
        an outstanding  LIBOR  Advance,  or if a LIBOR Advance is not available,
        any new  Warehousing  Advance made shall be deemed to be a Variable Rate
        Advance,  and on the  last day of the  applicable  Interest  Period  all
        outstanding  principal  amounts  of such  Warehousing  Advance  shall be
        deemed converted to a Variable Rate Advance.

                2.4.5 Telephonic Notice.  Without in any way limiting Borrowers'
        obligation to confirm in writing any  telephonic  notice,  Agent may act
        without  liability upon the basis of telephonic notice believed by Agent
        in  good  faith  to be from a  Borrower  prior  to  receipt  of  written
        confirmation.  In each case each  Borrower  hereby  waives  the right to
        dispute  Agent's record of the terms of such  telephonic  Notice of Rate
        Selection.

                2.4.6  Limits  On  Options.  Each  LIBOR  Advance  shall be in a
        minimum amount of $250,000.00.

                2.4.7 Payment and Calculation of Interest.

                        (i) All  interest  shall  be:  (a)  payable  in  arrears
                commencing  January  __,  2002 and on the same day of each month
                thereafter  until the  principal  together with all interest and
                other  charges  payable  with respect to the Loan shall be fully
                paid;  and (b) calculated on the basis of a 360 day year and the
                actual number of days elapsed. If any



                                      -5-
<PAGE>


                Warehousing  Advances shall  constitute  Variable Rate Advances,
                then each change in the Prime Rate shall  simultaneously  change
                the Variable Rate payable under this  Agreement.  Changes in the
                rate of  interest  resulting  from the changes in the Prime Rate
                shall take place  immediately  without prior notice or demand of
                any kind.  Interest at the LIBOR Rate shall be computed from and
                including the first day of the  applicable  Interest  Period to,
                but excluding, the last day thereof.

                        (ii)  If,  for  any  reason,  (1) a  Borrower  repays  a
                Warehousing  Advance  on the  same  day  that it was made by the
                Lenders  or  (2) a  Borrower  instructs  Agent  not  to  make  a
                previously requested  Warehousing Advance after the Lenders have
                reserved  funds or made other  arrangements  necessary to enable
                such Lenders to fund that Warehousing  Advance,  Borrower agrees
                to pay,  in  addition  to those  amounts  required  pursuant  to
                Sections   2.4.15  and   2.4.16   below,   to  each   Lender  an
                administrative   fee  equal  to  1  day  of   interest  on  that
                Warehousing   Advance   at  a  rate   of   1-1/2%   per   annum.
                Administrative  fees are due and  payable in the same  manner as
                interest is due and payable under this Agreement.

                2.4.8 Principal.  The outstanding  principal balance of the Loan
        shall be repaid as follows:

                        (i) Each Warehousing Advance (or any portion thereof, if
                such  Warehousing  Advance  was used to fund  multiple  Eligible
                Loans)  shall be  repaid  upon the  earlier  to occur of (x) the
                payment of the  Committed  Purchase  Price from an Investor with
                respect  to any  Eligible  Loan or (y) that date  which is sixty
                (60)  days  from the  date of the  funding  of such  Warehousing
                Advance.

                        (ii) Upon  telephonic  Notice to any  Borrower by Agent,
                Borrowers must pay to Agent, and each Borrower  authorizes Agent
                to charge the respective Borrower's Operating Account maintained
                with the Agent for,  the amount of any  outstanding  Warehousing
                Advance  against a  specific  Pledged  Asset  upon the  earliest
                occurrence of any of the following events:

                                (a) On the date a  Warehousing  Advance was made
                        if the Pledged Loan that was to have been funded by that
                        Warehousing Advance is not closed and funded.

                                (b) Three (3)  Business  Days  elapses  from the
                        date a  Warehousing  Advance was made  against a Pledged
                        Loan,  without  receipt  of  the  Collateral   Documents
                        relating to that Pledged  Loan  required to be delivered
                        on  that  date,  or  such  Collateral  Documents,   upon
                        examination by Agent,  are found not to be in compliance
                        with the  requirements  of this Agreement or the related
                        Purchase Commitment.



                                      -6-
<PAGE>



                                (c) Ten (10)  Business  Days elapse  without the
                        return of a Collateral  Document delivered by Agent to a
                        Borrower   under  a  Trust  Receipt  for  correction  or
                        completion.

                                (d) On the  date  on  which  a  Pledged  Loan is
                        determined  to have  been  originated  based on  untrue,
                        incomplete or inaccurate  information or otherwise to be
                        subject  to  fraud,  whether  or not  any  Borrower  had
                        knowledge  of  the   misrepresentation,   incomplete  or
                        incorrect  information or fraud, or on the date on which
                        any Borrower  knows,  or has reason to know, or receives
                        Notice   from   Agent,   that   one  or   more   of  the
                        representations  and  warranties  set forth in Article 8
                        were inaccurate or incomplete in any material respect on
                        any date when made or deemed made.

                                (e) On the date the Pledged Loan or a Lien prior
                        to the Pledged Loan is defaulted  and remains in default
                        for a period of 60 days or more.

                                (f)  On  the  mandatory  delivery  date  of  the
                        related Purchase Commitment if the specific Pledged Loan
                        has not been  delivered  under the  Purchase  Commitment
                        prior to such  mandatory  delivery  date, or on the date
                        the   related   Purchase   Commitment   expires   or  is
                        terminated.

                                (g) Three  (3)  Business  Days  after the date a
                        Pledged  Loan is  rejected  for  purchase by an Investor
                        unless another  Purchase  Commitment is provided  within
                        that 3 Business Day period.

                                (h)  Upon  the  sale,   other   disposition   or
                        prepayment  of any Pledged  Asset or, with  respect to a
                        Pledged Loan included in an Eligible Mortgage Pool, upon
                        the  sale or other  disposition  of the  related  Agency
                        Security.

                        (iii) In addition to the payments  required  pursuant to
                Sections 2.4.8 (ii), if the principal amount of any Pledged Loan
                is prepaid in whole or in part  while a  Warehousing  Advance is
                outstanding  against the  Pledged  Loan,  Borrowers  must pay to
                Agent,  without  the  necessity  of prior  demand or Notice from
                Agent,  the amount of the prepayment,  to be applied against the
                Warehousing Advance.

                        (iv) The  proceeds of the sale or other  disposition  of
                Pledged Assets must be paid directly by the Investor to the Cash
                Collateral Account.  Each Borrower must give Notice to Agent (by
                telephone or  electronic  mail,  and if by  telephone,  followed
                promptly  by  written  notice) of the  Pledged  Assets for which
                proceeds  have been  received.  Upon receipt of such  Borrower's
                Notice,  Agent will apply any proceeds  deposited  into the Cash
                Collateral  Account to the  payment of the  Warehousing  Advance
                related to the Pledged Assets  identified by any Borrower in its
                Notice, and those Pledged Assets will be considered to have been
                redeemed from pledge.  Agent is entitled to rely upon Borrower's
                affirmation  that  deposits  in  the  Cash  Collateral   Account
                represent  payments  from  Investors  for  the  purchase  of the
                Pledged Assets specified by Borrower in its Notice. If



                                      -7-
<PAGE>


                the payment from an Investor for the purchase of Pledged  Assets
                is less than the  outstanding  Warehousing  Advance  against the
                Pledged  Assets  identified  by  Borrower  in  its  Notice  (the
                "Deficiency"),  the Borrower shall immediately  deposit into the
                Cash  Collateral  Account  the  amount  of  such  Deficiency  in
                collected  funds,  and the Borrower  authorizes  Agent to charge
                Borrower's Cash Collateral  Account for the amount  deposited by
                Buyer to be applied against such Warehousing Advance. As long as
                no Default or Event of Default exists, Agent will transfer in to
                the respective  Borrower's  Operating Account any excess payment
                from an Investor for Pledged Assets.

                (v) Agent reserves the right to revalue any Pledged Loan that is
        not covered by a Purchase  Commitment  from  Fannie Mae or Freddie  Mae.
        Agent  reserves  the right to  revalue  any  Pledged  Loan that is to be
        exchanged for an Agency  Security if that Agency Security is not covered
        by a  Purchase  Commitment.  Borrowers  must pay to Agent,  without  the
        necessity  of prior  demand or Notice  from Agent,  any amount  required
        after  any such  revaluation  to  reduce  the  principal  amount  of the
        Warehousing  Advance outstanding against the revalued Pledged Loan to an
        amount equal to the Advance Rate for the  applicable  Eligible Loan type
        multiplied by the Fair Market Value of the Mortgage Loan.

                (vi) As provided for in Section 2.4.10.

                2.4.9 Prepayment. The Loan or any portion thereof may be prepaid
        in full or in part at any time by 2:00 p.m. on, with respect to Variable
        Rate  Advances  the  business  Day  before,  and with  respect  to LIBOR
        Advances,  the  third  Business  Day  before  the date of such  payment,
        subject to the make-whole provisions set forth in Section 2.4.15.

                2.4.10 Maturity.  Upon acceleration of the Loan, if the Loan has
        been  accelerated  by the Agent (or the Facility has been  automatically
        terminated)  upon an Event of  Default,  or at the  Maturity  Date,  all
        accrued and unpaid  interest,  principal  and other fees and charges due
        with  respect  to the Loan  shall be due and  payable  in full,  and the
        principal  balance  and such  other  fees and  charges,  but not  unpaid
        interest,  shall  continue to bear interest at the Default Rate until so
        paid.

                2.4.11  Method of  Payment;  Date of  Credit.  All  payments  of
        interest, principal and fees shall be made in lawful money of the United
        States in immediately  available funds,  without  counterclaim or setoff
        and free and clear of, and without any deduction or withholding for, any
        taxes or other  payments:  (a) by direct  charge to the Cash  Collateral
        Account of the respective Borrowers, with respect to interest, or (b) by
        wire transfer to Agent.  Payments  shall be credited on the Business Day
        on which  immediately  available  funds are received prior to 2:00 P.M.;
        payments  received  after 2:00 P.M. shall be credited to the Loan on the
        next Business Day.  Payments which are by check,  which Agent may at its
        option  accept or  reject,  or which are not in the form of  immediately
        available  funds  shall not be  credited  to the Loan  until  such funds
        become immediately  available to Agent, and, with respect to payments by
        check,  such credit shall be provisional  until the item is finally paid
        by the payor bank. All payments shall be applied first to the payment of
        all fees,  expenses,  and other  amounts due to the  Lenders  (excluding
        principal and interest),  then to accrued  interest,  and the balance on
        account of  outstanding  principal,  provided,  however,  that after the
        occurrence and during the continuation of an



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        Event of Default,  payments  will be applied to the  Obligations  as the
        Agent determines, subject to the provisions of section 11.2.4.

                2.4.12 Billings.  Agent may submit monthly  billings  reflecting
        payments  due;  however,  any changes in the  interest  rate which occur
        between  the date of billing  and the due date may be  reflected  in the
        billing for a subsequent month. Neither the failure of Agent to submit a
        billing nor any error in any such billing  shall excuse  Borrowers  from
        the  obligation  to  make  full  payment  of  all   Borrowers'   payment
        obligations when due.

                2.4.13  Default  Rate.  Agent shall have the option of imposing,
        and Borrowers shall pay upon billing therefor, an interest rate which is
        four percent (4%) per annum above the Variable  Rate  ("Default  Rate"):
        (a)  following  any  Event of  Default,  unless  and  until the Event of
        Default is waived by Agent or cured,  and (b) after the  Maturity  Date,
        and the Borrowers' right to select pricing options shall cease.

                2.4.14 Late Charges. Borrowers shall pay, upon billing therefor,
        a "Late  Charge" equal to five percent (5%) of the amount of any payment
        of principal, other than principal due at the Maturity Date (or the date
        on which the Agent  accelerates  the time for  payment of the Loan after
        the occurrence of an Event of Default), interest, or fees, which are not
        paid within ten (10) days of the due date thereof. Late Charges are: (a)
        payable in addition to, and not in limitation  of, the Default Rate, (b)
        intended to  compensate  Agent and the Lenders  for  administrative  and
        processing  costs incident to late payments,  (c) not interest,  and (d)
        not subject to refund or rebate or credit against any other amount due.

                2.4.15  Prepayment;  Yield  Maintenance.  Except for prepayments
        under Section  2.4.8,  the Borrower may prepay a LIBOR Advance only upon
        at least three (3) Business  days prior  written  notice to Agent (which
        notice shall be  irrevocable).  The Borrower shall pay to the Agent, for
        the ratable benefit of the Lenders,  upon request of Agent,  such amount
        or amounts as shall be sufficient (in the  reasonable  opinion of Agent)
        to  compensate  Agent or any  Lender  for any  loss,  cost,  or  expense
        incurred  as a result  of:  (i) any  payment  or  prepayment,  under any
        circumstances  whatsoever,  whether voluntary or involuntary,  of all or
        any portion of a LIBOR  Advance on a date other than the last day of the
        Interest  Period for such LIBOR Advance;  (ii) the  conversion,  for any
        reason whatsoever,  whether voluntary or involuntary (including, without
        limitation, as a result of the acceleration of the Obligations),  of any
        LIBOR Advance,  to a Variable Rate Advance on a date other than the last
        day of the applicable interest Period,  (iii) any failure by Borrower to
        borrow a LIBOR  Advance  on the date  specified  by  Borrower's  written
        notice;  (iv) any failure by Borrower to pay a LIBOR Advance on the date
        for payment specified in Borrower's written notice.  Without duplication
        of the foregoing,  Borrower shall pay to Agent,  for the ratable benefit
        of the  Lenders,  a "yield  maintenance  fee" in an amount  computed  as
        follows:  The current rate for United States Treasury  securities (bills
        on a discounted  basis shall be converted to a bond  equivalent)  with a
        maturity  date  closest  to the term  chosen  pursuant  to a  applicable
        Interest Period as to which the prepayment is made,  shall be subtracted
        from the LIBOR Rate in effect at the time of  prepayment.  If the result
        is zero or a negative number,  there shall be no yield  maintenance fee.
        If the result is a positive number, then the resulting  percentage shall
        be multiplied by the amount of the principal balance being prepaid.  The
        resulting amount shall be divided by 360 and multiplied by the number of
        days remaining in the term chosen  pursuant to the Interest Period as to
        which the  prepayment  is made.  Said amount shall be reduced to present
        value  calculated by using the  above-referenced  United



                                      -9-
<PAGE>



        States Treasury  securities rate and the number of days remaining in the
        term chosen  pursuant to the Interest  Period as to which the prepayment
        is made. The resulting amount shall be the yield  maintenance fee due to
        Agent,  for the ratable  benefit of the Lenders,  upon  prepayment  of a
        LIBOR Advance.

        2.5 Loan Fees.

                2.5.1 Loan Fees.  Borrowers shall pay a commitment fee as agreed
        to among the Borrowers and the Agent in accordance  with the  provisions
        of the Fee Letter.

                2.5.2 Agent's Fees. Borrowers shall pay to the Agent for its own
        account an administrative fee and such other fees as may be provided for
        in the Fee Letter.

                2.5.3  Facility  Fee.  Borrowers  agree to pay a facility fee to
        Agent on behalf of the Lenders on the average daily  unborrowed  portion
        of the  Facility  from the  Agreement  Date to the  Maturity  Date  (the
        "Facility  Fee"),  calculated as set forth below. The Facility Fee shall
        be payable in arrears on the first Business Day of each calendar quarter
        for the immediately preceding calendar quarter or portion thereof and on
        the Maturity Date,  and shall be calculated by  multiplying  the average
        daily unborrowed portion of the Facility for such immediately  preceding
        calendar  quarter or portion thereof by 0.025% percent,  and multiplying
        that product by a fraction, the numerator of which is the number of days
        during such calendar quarter that the Facility remained outstanding, and
        the  denominator  of which is the number of days  during  such  calendar
        quarter.  The Borrowers  shall not be entitled to any credit,  rebate or
        repayment of the Facility Fee  notwithstanding  any  termination of this
        Agreement or suspension or  termination  of the Agent's and any Lender's
        respective obligation to make Warehousing Advances hereunder.

        2.6  Acceleration.  The Agent may, and upon the request of the Requisite
Lenders shall, terminate the Commitments,  and accelerate the Loan, following an
Event of Default, provided, however, upon the occurrence of any Event of Default
described  in  Sections  9.1.6 or 9.1.7,  the  Commitments  shall  automatically
terminate  and all  such  amounts  shall  become  immediately  due  and  payable
automatically  and without any  requirement of notice from any of the Lenders or
the Agent. Upon such an acceleration, all principal, accrued interest and costs,
fees,  and  expenses  shall be due and payable  together  with  interest on such
principal at the Default Rate and any applicable make whole provisions.

        2.7 Additional Provisions Related to Interest Rate Selection.

                2.7.1  Increased  Costs.  If, due to any one or more of: (i) the
introduction  of any  applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the definition of LIBOR Rate) in the  interpretation or application by any
authority charged with the  interpretation or application  thereof of any law or
regulation;  or (ii) the  compliance  with any  guideline  or  request  from any
governmental central bank or other governmental authority (whether or not having
the  force of law),  there  shall be an  increase  in the cost to any  Lender of
agreeing to make or making,  funding or maintaining  LIBOR Advances,  including,
without  limitation,  changes which affect or would affect the amount of capital
or reserves  required or expected to be maintained by any Lender with respect to
all or any portion of the Loan, or any



                                      -10-
<PAGE>



        corporation  controlling any Lender, on account thereof,  then Borrowers
        from  time to time  shall,  upon  written  demand  by  Agent,  pay  such
        additional amounts as are sufficient to indemnify any Lender against the
        increased cost. A certificate as to the amount of the increased cost and
        the reason  therefor  submitted to Borrowers by Agent, in the absence of
        manifest error, shall be conclusive and binding for all purposes.

                2.7.2  Illegality.  Notwithstanding  any other provision of this
        Agreement,  if the introduction of or change in or in the interpretation
        of any law, treaty, statute,  regulation or interpretation thereof shall
        make it unlawful,  or any central  bank or  government  authority  shall
        assert by directive,  guideline or otherwise,  that it is unlawful,  for
        any Lender to make or maintain  LIBOR Advances or to continue to fund or
        maintain  LIBOR  Advances  then, on written notice thereof and demand by
        Agent to Borrowers,  (a) the  obligation of Agent to make LIBOR Advances
        and to convert or continue  any  Warehousing  Advance as LIBOR  Advances
        shall   terminate  and  (b)   Borrowers   shall  convert  all  principal
        outstanding under this Agreement into Variable Rate Advances.

                2.7.3  Additional  LIBOR  Conditions.  The  maintenance  of  any
        Warehousing  Advance at the effective LIBOR Rate shall be subject to the
        following additional terms and conditions:

                        (i)  Availability.  If, before or after any Borrower has
                selected to take or  maintain a LIBOR  Advance,  Agent  notifies
                such Borrower that

                                (a)  dollar  deposits  in the amount and for the
                        maturity requested are not available to the Agent in the
                        London  interbank  market at the rate  specified  in the
                        definition of LIBOR Rate set forth above, or

                                (b)  reasonable  means do not exist for Agent to
                        determine  the LIBOR Rate for the amounts  and  maturity
                        requested,

               then the principal which would have been a LIBOR Advance shall be
               a Variable Rate Advance.

                        (ii) Payments Net of Taxes. All payments and prepayments
                of principal and interest under this Agreement shall be made net
                of  any  taxes  and  costs   resulting  from  having   principal
                outstanding  at or  computed  with  reference,  to a LIBOR Rate.
                Without  limiting the  generality of the  preceding  obligation,
                illustrations  of  such  taxes  and  costs  are  taxes,  or  the
                withholding  of  amounts  for taxes,  of any  nature  whatsoever
                including income,  excise,  interest  equalization  taxes (other
                than United States or state income taxes) as well as all levies,
                imposts,  duties  or fees  whether  now in  existence  or as the
                result of a change in or  promulgation  of any treaty,  statute,
                regulation,   or   interpretation   thereof  or  any  directive,
                guideline or  otherwise  by a central  bank or fiscal  authority
                (whether  or not  having  the  force of law) or a change  in the
                basis  of,  or the time of  payment  of,  such  taxes  and other
                amounts resulting therefrom.

3.      SECURITY FOR THE FACILITY.



                                      -11-
<PAGE>



        3.1 Grant of Security  Interest.  As security  for the  Facility and the
payment  of the  Loan and for the  performance  of all of the  Borrowers'  other
Obligations,  each Borrower grants a security interest to Agent, for the ratable
benefit of the Lenders,  in all of such Borrower's right,  title and interest in
and to the following described property ("Collateral"):

                3.1.1 All  amounts  advanced by Lenders to or for the account of
        Borrowers  under  this  Agreement  to fund a  Mortgage  Loan  until that
        Mortgage Loan is closed and those funds disbursed.

                3.1.2 All  Mortgage  Loans,  including  all  Mortgage  Notes and
        Mortgages   evidencing  or  securing  those  Mortgage  Loans,  that  are
        delivered  or caused to be  delivered  to Agent for the  benefit  of the
        Lenders (including  delivery to a third party on behalf of Agent),  come
        into the  possession,  custody or  control  of Agent for the  purpose of
        pledge or in respect of which  Lenders have made a  Warehousing  Advance
        under this Agreement (collectively, "Pledged Loans").

                3.1.3 All  Mortgage-backed  Securities that are created in whole
        or in part on the basis of Pledged  Loans or are  delivered or caused to
        be delivered to Agent for the benefit of the Lenders,  or are  otherwise
        in the  possession  of  Agent,  or its  agent,  bailee or  custodian  as
        assignee,  or pledged to Agent for the  benefit of the  Lenders,  or for
        such  purpose  are  registered  by  book-entry  in  the  name  of  Agent
        (including  delivery to or  registration in the name of a third party on
        behalf  of  Agent)  under  this  Agreement  or in  respect  of  which  a
        Warehousing  Advance  has been  made by  Lenders  under  this  Agreement
        (collectively, "Pledged Securities").

                3.1.4 All  commitments  issued by FHA to insure or guarantee any
        Mortgage Loans included in the Pledged Loans;  all Purchase  Commitments
        held by any Borrower  covering  Pledged  Loans or Pledged  Securities or
        proposed  permanent  Pledged  Loans,  and all proceeds  from the sale of
        Pledged  Loans or Pledged  Securities  to  Investors  pursuant  to those
        Purchase  Commitments;  and  all  personal  property,  contract  rights,
        servicing and servicing fees and income or other  proceeds,  amounts and
        payments payable to Borrower  whether as compensation or  reimbursement,
        accounts or general  intangibles of whatsoever  kind relating to Pledged
        Loans, Pledged Securities, FHA Commitments and the Purchase Commitments,
        and all other  documents or  instruments  relating to Pledged  Loans and
        Pledged Securities,  including any interest of any Borrower in any fire,
        casualty or hazard insurance  policies and any awards made by any public
        body or decreed by any court of competent  jurisdiction  for a taking or
        for  degradation of value in any eminent  domain  proceeding as the same
        relate to Pledged Loans.

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

                3.1.6 All cash,  whether now existing or acquired after the date
        of this Agreement,  delivered to or otherwise in the possession of Agent
        or any  Lender,  or  their  respective  agents,  bailees  or  custodians
        (provided,  that with  respect to funds held by any of the  Borrowers in



                                      -12-
<PAGE>



        trust or escrow for any other Person with the Agent or any Lender,  only
        the  Borrowers'  interest in earnings on such funds shall be Collateral)
        or  designated  on the books and records of  Borrowers  as assigned  and
        pledged to Agent for the  benefit  of the  Lenders,  including  all cash
        deposited in the Cash Collateral Account.

                3.1.7 All Accounts or General  intangibles owned by any Borrower
        ("Receivables")  related to the Collateral  referenced in Sections 3.1.1
        through and including  3.1.3 for the payment of money against (1) FHA or
        a private  mortgage insurer under an FHA or private  insurer's  mortgage
        insurance  policy  insuring  payment of, or any other  Person  under any
        other  agreement  (excluding a Servicing  Contract)  relating to, all or
        part of a defaulted  Mortgage Loan  repurchased  by any Borrower from an
        investor or out of a pool of Mortgage  Loans  serviced by any  Borrower,
        (2) obligors and their accounts,  or any Investor,  insurer or guarantor
        covering,  or out of the proceeds of any sale of or foreclosure  sale in
        respect of, any Mortgage Loan being serviced by any Borrower,  in either
        case,  for the  reimbursement  of real estate taxes or  assessments,  or
        casualty  or  liability  insurance  premiums,  paid by any  Borrower  in
        connection with Mortgage Loans and (3) obligors and their  accounts,  or
        any other Investor,  insurer or guarantor under or in respect of, or out
        of the  proceeds  of any sale or  foreclosure  sale in  respect  of, any
        Mortgage  Loans  serviced by any Borrower for repayment of advances made
        by any Borrower to cover shortages in principal and interest payments.

                3.1.8  All  Hedging   Arrangements  related  to  the  Collateral
        referenced  in Section  3.1.1  through  and  including  3.1.3  ("Pledged
        Hedging  Arrangements")  and any  Borrower's  accounts  in  which  those
        Hedging  Arrangements are held ("Pledged Hedging  Accounts"),  including
        all rights to payment arising under the Pledged Hedging Arrangements and
        the Pledged Hedging  Accounts,  except that Agent's security interest in
        the Pledged Hedging Arrangements and Pledged Hedging Accounts is limited
        to benefits, including rights to payment, related to the Collateral.

                3.1.9  All  cash  and  non-cash   proceeds  of  the  Collateral,
        including all  dividends,  distributions  and other rights in connection
        with, and all additions to,  modifications of and replacements  for, the
        Collateral,  and all products and proceeds of the  Collateral,  together
        with whatever is receivable or received when the  Collateral or proceeds
        of Collateral are sold,  collected,  exchanged or otherwise disposed of,
        whether such  disposition  is voluntary or  involuntary,  including  all
        rights to  payment  with  respect  to any cause of action  affecting  or
        relating to the Collateral or proceeds of Collateral.

        3.2 Authenticated  Record.  This Agreement  constitutes an authenticated
record which authorizes the Agent to file such financing statements as the Agent
determines as appropriate to perfect or protect the security  interests  created
by this Agreement.

        3.3 [Intentionally Omitted]

        3.4 Release of Security Interest in Pledged Loans and Pledged Securities



                                      -13-
<PAGE>

                3.4.1 Except as provided in Section 3.4.2, Pledged Loans will be
        released from Agent's security interest only against payment to Agent of
        the Release Amount in connection  with those Pledged  Loans.  If Pledged
        Loans are  transferred  to a pool custodian or an investor for inclusion
        in a Mortgage  Pool and Agent's  security  interest in the Pledged Loans
        included in the Mortgage Pool is not released before the issuance of the
        related Mortgage-backed  Security,  then that Mortgage-backed  Security,
        when issued, is a Pledged Security,  Agent's security interest continues
        in the Pledged Loans backing that Pledged Security and Agent is entitled
        to  possession  of the Pledged  Security in the manner  provided in this
        Agreement.

                3.4.2 If Pledged Loans are transferred to an Approved  Custodian
        and included in an Eligible Mortgage Pool,  Agent's security interest in
        the  Pledged  Loans  included  in the  Eligible  Mortgage  Pool  will be
        released  upon the delivery of the Agency  Security to Agent  (including
        delivery  to or  registration  in the name of a third party on behalf of
        Agent), and that Agency Security is a Pledged Security. Agent's security
        interest in that Pledged  Security will be released only against payment
        to Agent of the Release  Amount in  connection  with the Mortgage  Loans
        backing that Pledged Security.

                3.4.3 Agent has the exclusive right to possession of all Pledged
        Securities or, if Pledged  Securities  are issued in book-entry  form or
        issued in certificated form and delivered to a clearing  corporation (as
        such term is defined in the UCC) or its nominee,  Agent has the right to
        have the  Pledged  Securities  registered  in the  name of a  securities
        intermediary  (as  such  term  is  defined  in the  UCC)  in an  account
        containing only customer securities and credited to an account of Agent.
        Agent has no duty or  obligation  to deliver  Pledged  Securities  to an
        Investor or to credit  Pledged  Securities to the account of an Investor
        or the  Investor's  designee  except  against  payment for those Pledged
        Securities,  unless the Agent shall have entered into a master agreement
        with such Investor on terms and  conditions  satisfactory  to the Agent,
        and with respect to the Longwood  Loan,  provided  that a default by the
        borrower  under the Longwood Loan in delivering  the Pledged  Securities
        does not occur,  and provided that the Lenders shall not be obligated to
        make more than one (1) Warehouse Advance per month for the Longwood Loan
        without  the  consent  of the  Agent,  which  will  not be  unreasonably
        withheld.  Each Borrower  acknowledges  that Agent may enter into one or
        more standing  arrangements with securities  intermediaries with respect
        to  Pledged   Securities   issued  in  book  entry  form  or  issued  in
        certificated  form  and  delivered  to a  clearing  corporation  or  its
        designee,  under which the Pledged Securities are registered in the name
        of the securities  intermediary,  and each Borrower agrees, upon request
        of Agent, to execute and deliver to those securities intermediaries such
        Borrower's written concurrence in any such standing arrangements.

                3.4.4 If no Default or Event of Default  occurs,  Borrowers  may
        redeem a Pledged Loan or Pledged Security from Agent's security interest
        by  notifying  Agent of its  intention  to redeem  the  Pledged  Loan or
        Pledged  Security  from  pledge  and either  (1)  paying,  or causing an
        Investor  to pay,  to Agent the Release  Amount in  connection  with the
        Pledged Loan or the Pledged Loans backing that Pledged Security,  or (2)
        delivering  substitute  Collateral that, in addition to being acceptable
        to Agent in its sole  discretion  will, when included with the remaining
        Collateral,  result in a Warehousing  Collateral Value of all Collateral
        held by Agent that is at least equal to the aggregate outstanding Loan.



                                      -14-
<PAGE>

                3.4.5  After a Default  or Event of Default  occurs,  Agent may,
        with no liability  to  Borrowers or any Person,  continue to release its
        security  interest  in any  Pledged  Loan or  Pledged  Security  against
        payment of the Release  Amount in  connection  with that Pledged Loan or
        the Pledged Loans backing that Pledged Security.

                3.4.6 The amount  ("Release  Amount") to be paid by Borrowers to
        obtain the release of Agent's  security  interest in a Pledged Loan will
        be (1) until an Event of Default  occurs,  the  principal  amount of the
        Warehousing Advances outstanding against the Pledged Loan, and (2) while
        an Event of Default exists,  the full Committed Purchase Price therefor,
        or amount paid to Agent in a commercially reasonable disposition of that
        Pledged  Loan by the Agent in the  exercise  of its rights and  remedies
        under this Agreement.

        3.5 Collection and Servicing Rights

                3.5.1 If no Event of Default  exists,  Borrowers may service and
        receive and collect directly all sums payable to Borrowers in respect of
        the  Collateral  other  than  proceeds  of any  Purchase  Commitment  or
        proceeds of the sale of any Collateral  (which shall be paid directly to
        the Cash Collateral Account).

                3.5.2  After an  Event of  Default,  Agent or its  designee  are
        entitled to service and receive and collect all sums payable to Borrower
        in respect of the Collateral, and in such case (1) Agent or its designee
        in its  discretion  may, in its own name,  in the name of  Borrowers  or
        otherwise,  demand, sue for, collect or receive any money or property at
        any time payable or  receivable  on account of or in exchange for any of
        the Collateral,  but Agent has no obligation to do so, (2) each Borrower
        must,  if Agent  requests  it to do so, hold in trust for the benefit of
        Agent and immediately  pay to Agent at its office  designated by Notice,
        all amounts  received by such  Borrower upon or in respect of any of the
        Collateral,  advising  Agent as to the  source of such funds and (3) all
        amounts so received and collected by Agent will be held by it as part of
        the Collateral for the ratable benefit of the Lenders.

        3.6 Return of Collateral at End of Warehousing Commitment

                3.6.1 If (a) the  Warehousing  Commitment  has  expired  or been
        terminated,   and  (b)  no  Warehousing  Advances,   interest  or  other
        Obligations are outstanding and unpaid,  Agent will release its security
        interest and will deliver all  Collateral in its possession to Borrowers
        at  Borrowers'  expense.  Borrowers'  acknowledgment  or receipt for any
        Collateral  released or delivered to  Borrowers  under any  provision of
        this Agreement is a complete and full  acquittance for the Collateral so
        returned,  and Agent is discharged from any liability or  responsibility
        for that Collateral.

        3.7 Delivery of Collateral Documents

                3.7.1 Agent may deliver documents  relating to the Collateral to
        Borrowers for correction or completion under a Trust Receipt.



                                      -15-
<PAGE>

                3.7.2 If no Default or Event of Default exists, upon delivery by
        Borrowers to Agent of shipping  instructions  pursuant to the applicable
        Exhibit B,  Agent will  transmit  Pledged  Loans or Pledged  Securities,
        together with all related loan  documents and pool  documents in Agent's
        possession,  to the  applicable  Investor,  Approved  Custodian or other
        party acceptable to Agent in its sole discretion.

                3.7.3 If a  Default  or  Event of  Default  exists,  Agent  may,
        without liability to Borrowers or any other Person, continue to transmit
        Pledged  Loans or Pledged  Securities,  together  with all related  loan
        documents and pool  documents in Agent's  possession,  to the applicable
        Investor,  Approved  Custodian or other party acceptable to Agent in its
        sole discretion.

                3.7.4  Upon  receipt  of Notice  from  Borrowers  under  Section
        2.4.8(v),  and payment of the Release  Amount with  respect to a Pledged
        Loan  identified by a Borrower,  Agent will release to the Borrowers any
        Collateral  Documents  relating  to the  redeemed  Pledged  Loan  or the
        Pledged  Loans  backing  a  Pledged  Security  that  Agent  has  in  its
        possession  and that have not been  delivered to an Investor or Approved
        Custodian.

        3.8 Loan  Documents  and Security  Documents.  The Facility and the Loan
shall be made,  evidenced,  administered,  secured  and  governed  by all of the
terms,  conditions and provisions of the "Loan Documents",  each as the same may
be hereafter modified or amended,  consisting of: (i) this Loan Agreement;  (ii)
the Notes  made  payable by each  Borrower  in favor of each  Lender;  (iii) the
Guaranties;  (iv) the Assigned  Collateral  Documents;  (v) any other documents,
instruments,  or agreements executed to further evidence or secure the Loan; and
(vi) any  Hedging  Arrangements  as to which the Agent (or an  Affiliate  of the
Agent) is a counterparty.

        Each of the Loan Documents listed in items (i) through (iii), inclusive,
shall be dated of even date  herewith.  The Assigned  Collateral  Documents  are
sometimes collectively referred to herein as the "Security Documents".

4.      CONTINUING  AUTHORITY OF AUTHORIZED  REPRESENTATIVES.  Agent and each of
the Lenders are authorized to rely upon the continuing  authority of the Persons
hereafter  designated by the Borrowers  ("Authorized  Representatives")  to bind
Borrowers  with  respect  to all  matters  pertaining  to the  Loan and the Loan
Documents  including,  but not limited to, the selection of interest rates,  the
submission of requests for Warehousing  Advances,  and certificates  with regard
thereto.  Such  authorization  may be changed only upon written  notice to Agent
accompanied by evidence,  reasonably  satisfactory to Agent, of the authority of
the person giving such notice and such notice shall be effective not sooner than
five (5)  Business  Days  following  receipt  thereof by Agent.  The  Authorized
Representatives  as of the  Agreement  Date are listed on  Schedule 4. The Agent
shall have a right of approval, not to be unreasonably withheld or delayed, over
the identity of the Authorized Representatives so as to assure Agent and each of
the Lenders that each  Authorized  Representative  is a  responsible  and senior
official of Borrowers.

5.      CONDITIONS PRECEDENT.


                                      -16-
<PAGE>



        5.1 Establishment of Facility and Funding Initial  Warehousing  Advance.
It shall be a  condition  precedent  of Lenders'  obligation  to  establish  the
Facility  that each of the following  conditions  precedent be satisfied in full
(as determined by the Agent and the Requisite  Lenders in their discretion which
discretion  shall be  exercised in good faith),  unless  specifically  waived in
writing by the Agent and the Requisite Lenders at or prior to closing:

                5.1.1  Satisfactory  Loan Documents.  Each of the Loan Documents
        shall have been duly  executed and delivered by the  respective  parties
        thereto and,  shall be in full force and effect and shall be in form and
        substance satisfactory to each of the Lenders.

                5.1.2 No Material Change.  No material adverse change shall have
        occurred in the financial condition,  business, affairs or operations of
        any  Borrower  or the  Guarantors  since  the date of  their  respective
        financial statements most recently delivered to the Agent (September 30,
        2001).

                5.1.3  UCC and tax lien  Searches  UCC,  tax  lien and  judgment
        searches of the appropriate public records for each Borrower that do not
        disclose the existence of any prior Lien on the Collateral other than in
        favor of Agent or as  permitted  under this  Agreement,  or other than a
        Lien  in  favor  of any  Person,  which  Lien  shall  be  terminated  in
        accordance with the provisions of this Agreement.

                5.1.4 Warranties and  Representations  Accurate.  All warranties
        and  representations  made  by or on  behalf  of any  Borrower  and  the
        Guarantors to Agent or any of the Lenders pursuant to the Loan Documents
        shall be true and accurate in all  material  respects and shall not omit
        any material fact necessary to make the same not misleading.

                5.1.5  Financials.  Agent  and each of the  Lenders  shall  have
        received and approved financial  statements from Borrower complying with
        the standards set forth in Section 7.5.

                5.1.6  Validity  and  Sufficiency  of  Security  Documents.  UCC
        financing  statements  naming the  Borrowers as debtors and the Agent as
        secured party covering the Collateral  shall have been duly recorded and
        filed to the satisfaction of Agent and its counsel.

                5.1.7 No Other Liens. The Collateral shall not be subject to any
        Liens  or  encumbrances,  whether  inferior  or  superior  to  the  Loan
        Documents or the other Security Documents, except for a Lien in favor of
        any Person,  which shall be terminated in accordance with the provisions
        of this Agreement.

                5.1.8 Organizational Documents and Entity Agreements.  The Agent
        shall have received  from each Borrower and Guarantor a copy,  certified
        as of a recent  date by the  appropriate  officer  of the State in which
        such  Person is  organized  to be true and  complete,  of the  corporate
        charter and any other organization documents of such Person as in effect
        on such date of certification  (other than Larson  Financial  Resources,
        Inc.).   The  Borrowers  and  the  Guarantors   shall  furnish  evidence
        satisfactory  to the Agent that they are each duly qualified and in good
        standing in each  jurisdiction in which it owns or leases property or in
        which the conduct of its  business  requires  it to so  qualify,  except
        where the  failure



                                      -17-
<PAGE>



        to so  qualify  could  not  have  a  materially  adverse  effect  on the
        business,  assets,  or  financial  condition  of  the  Borrowers  or the
        Guarantors.  Notwithstanding,  the foregoing, the Agent acknowledges and
        agrees that  certificates of foreign  qualification for (i) PWF from the
        Secretary of State for the State of Illinois,  and (ii) Cambridge.  from
        the Secretary of State of the  Commonwealth  of  Massachusetts  shall be
        delivered  to the Agent in  accordance  with the  provisions  of Section
        7.13.

                5.1.9 Votes, Consents and Authorizations. All action on the part
        of the  Borrowers  and  Guarantors  necessary  for the valid  execution,
        delivery and  performance by (x) the Borrowers of this Agreement and the
        other Loan Documents to which it is or is to become a party, and (y) the
        Guarantors  of the Loan  Documents  to which they are or are to become a
        party,  shall have been duly and effectively taken, and evidence thereof
        satisfactory  to the Agent shall have been  provided  to the Agent.  The
        Agent shall have received from the Borrowers and Charter Mac Corporation
        true copies of their respective  by-laws and the resolutions  adopted by
        the their  respective  boards of directors  authorizing the transactions
        described  herein,  each certified by each of their  secretaries as of a
        recent date to be true and  complete,  and the Agent shall have received
        from Charter Municipal Acceptance Company true copies of its Declaration
        of  Trust  and  the  resolutions   adopted  by  its  Board  of  Trustees
        authorizing the  transactions  described  herein,  each certified by its
        Manager as of a recent date to be true and complete.

                5.1.10 Incumbency  Certificate;  Authorized  Signers.  The Agent
        shall have received from the Borrower an incumbency  certificate,  dated
        as of the Closing Date, signed by a duly authorized  officer each of the
        Borrowers and the  Guarantors and giving the name and bearing a specimen
        signature of each individual who shall be an Authorized  Representative:
        (a) to sign, in the name and on behalf of such Person,  each of the Loan
        Documents to which the such Person is or is to become a party;  (b) with
        respect to the Borrower,  to make requests for Warehouse  Advances;  and
        (c) to give notices and to take other action on behalf of the  Borrowers
        under the Loan Documents.

                5.1.11 Corporate Structure.  The Agent shall be satisfied in all
        respects with the legal  structure and  capitalization  of the Borrowers
        and all documentation relating thereto.

                5.1.12  Litigation.  There  shall be no  pending  or  threatened
        litigation  involving any of the Borrowers or the Guarantors  which,  in
        the judgment of the Agent,  could have a material adverse effect on such
        Person or the  ability of the  Borrowers  or the  Guarantors  to perform
        their  obligations  under the Loan  Documents to which they are a party,
        and no judgment,  order, injunction or other similar injunction or other
        similar  restraint  prohibiting  any  of the  transactions  contemplated
        hereby shall exist.

                5.1.13  Evidence of  Insurance.  The Agent  shall have  received
        evidence, in form, scope and substance and with such insurance carriers,
        satisfactory to the Agent, for all insurance policies required under any
        of the Loan Documents.

                5.1.14  Financial  Statements.  The Lenders  shall have received
        such financial  statements and other  information and projections as the
        Agent shall have  reasonably  requested,  and the  information  shall be
        satisfactory to the Lenders.




                                      -18-
<PAGE>



                5.1.15  Examination  of Books and  Assets.  The Agent shall have
        been  afforded the  opportunity  prior to closing,  to review the books,
        records,  leases,  contracts,  pension plans,  workers' compensation and
        retiree  health plans,  ERISA  matters,  product  liability  litigation,
        insurance coverage and properties of the Borrowers,  and to perform such
        other due  diligence  regarding  the  Borrowers  as the Agent shall have
        required,  the results of which review and due diligence shall have been
        reasonably satisfactory to the Agent and its counsel.

                5.1.16  Compliance  with Law. The Agent shall be satisfied  that
        (i) the  Borrowers  and the  Guarantors  have  obtained all material and
        appropriate authorizations and approvals of all governmental authorities
        (including,  without limitation, any approvals required by any of Fannie
        Mae,  FHA,  Freddie Mac,  GNMA,  HUD),  required for the due  execution,
        delivery and  performance by the Borrowers and the Guarantors of each of
        the  Loan  Documents  to which  they are or will be a party  and for the
        perfection  of or the  exercise  by the Agent  and each  Lender of their
        respective  rights and remedies under the Loan  Documents,  and (ii) the
        Facility as well as all other transactions contemplated hereby, shall be
        in material  compliance with, and the Borrowers and the Guarantors shall
        have obtained all material and appropriate  approvals pertaining to, all
        applicable  laws,  rules,  regulations  and orders,  including,  without
        limitation,  all  governmental,   environmental,  ERISA  retiree  health
        benefits, workers' compensation and other requirements,  regulations and
        laws and shall not contravene any charter,  by-law,  debt  instrument or
        other  material  Contractual  Obligation of Borrowers and Guarantors and
        their respective Subsidiaries.

                5.1.17  Legal and other  Opinions.  Each of the  Lenders and the
        Agent shall have  received an opinion  addressed  to the Lenders and the
        Agent  and  dated  as  of  the  Closing  Date,  in  form  and  substance
        satisfactory  to the  Lenders  and the  Agent  from the  Borrowers'  and
        Guarantors' counsel, Proskauer Rose LLP.

                5.1.18  Eligibility  Certificates.  Copies of the  certificates,
        documents or other written  instruments  that  evidence each  Borrower's
        eligibility  described  in  Section  8.1,  together  with  copies of all
        seller/servicer contracts to which each Borrower is a party, all in form
        and substance satisfactory to Agent.

                5.1.19  Payment  of Fees.  The  Borrower  shall have paid to the
        Agent all fees and expenses required pursuant to this Agreement, the Fee
        Letter and the other Loan Documents.

                5.1.20 No Default.  There shall not be any Default  under any of
        the Loan Documents.

                5.1.21 Agreements with other Lenders.

                        (i)  Larson,  the Agent and  Commerce  Bank  shall  have
                entered into an agreement in form and substance  satisfactory to
                the Agent pursuant to which, among other things, effective as of
                the  Closing  Date,  Larson  shall  cease to  request  loans and
                advances  and  Commerce  shall cease to make loans and  advances
                under  the  Commerce   Line,  and  all  amounts  due  and  owing
                thereunder shall be paid in full on or before March 30, 2002.



                                      -19-
<PAGE>

                        (ii) The Borrowers,  the Agent and  Residential  Funding
                Corporation  shall have  entered  into an  agreement in form and
                substance  satisfactory  to the Agent  pursuant to which,  among
                other things,  effective as of the Closing  Date,  the Borrowers
                shall  cease to  request  loans  and  advances  and  Residential
                Funding Corporation shall cease to make loans and advances under
                the RFC Line, and all amounts due and owing  thereunder shall be
                paid in full on or before March 30, 2002.

                5.1.22  Evidence  of  Insurance.  Copies  of  the  policies,  or
        certificates in lieu of policies,  evidencing the Borrowers'  compliance
        with the insurance requirements of Section 7.7.

                5.1.23 Additional  Documents.  The Borrowers shall have provided
        such  additional  instruments and documents to the Agent and the Lenders
        as the Agent and the Agent's counsel may have reasonably requested.

        5.2 Warehousing  Advances.  Each Warehousing Advance shall be subject to
the  condition  precedent  that all  conditions  to closing  the  Facility  were
satisfied or waived on the Closing Date and to the further  satisfaction of each
of the following conditions precedent,  unless specifically waived in writing by
Agent at or prior to the time of each such Warehousing Advance:

                5.2.1  Representations  True;  No Event of Default.  Each of the
        representations  and  warranties  and covenants of the Borrowers and the
        Guarantors contained in this Agreement or the other Loan Documents shall
        be true as of the date as of which they were made and shall also be true
        at and as of the time of the making of such  Warehousing  Advance,  with
        the same effect as if made at and as of that time  (except to the extent
        of changes  resulting from  transactions  contemplated  and permitted by
        this Agreement and the other Loan Documents and changes occurring in the
        ordinary  course of  business  that singly or in the  aggregate  are not
        materially adverse,  and except to the extent that such  representations
        and  warranties  relate  expressly to an earlier date) and no Default or
        Event of Default  shall have  occurred  and be  continuing.  Each of the
        Lenders shall have received a certificate  of the Borrower  signed by an
        authorized officer of the Borrower to such effect.

        Warehousing  Advance  Request.  Each  Borrower  requesting a Warehousing
        Advance must have delivered to Agent the Warehousing Advance Request and
        Collateral  Documents  called for  under,  and must have  satisfied  the
        procedures set forth in, Section 2 and the applicable Exhibits described
        in that Article.  All items  delivered to Agent must be  satisfactory to
        Agent in form and  content,  and Agent may reject any item that does not
        satisfy the  requirements  of this Agreement or of the related  Purchase
        Commitment.

        No  Legal  Impediment.  No  change  shall  have  occurred  in any law or
        regulations thereunder or interpretations thereof that in the reasonable
        opinion of any Lender would make it illegal for such Lender to make such
        Warehousing Advance.

        Governmental Regulation. Each Lender shall have received such statements
        in substance  and form  reasonably  satisfactory  to such Lender as such
        Lender shall require for the purpose of compliance  with any  applicable
        regulations of the Comptroller of the Currency or the Board of



                                      -20-
<PAGE>



        Governors of the Federal Reserve System.

        Proceedings  and  Documents.  All  proceedings  in  connection  with the
        transactions  contemplated by this  Agreement,  the other Loan Documents
        and  all  other   documents   incident   thereto   shall  be  reasonably
        satisfactory  in substance and in form to the Lenders and to the Agent's
        counsel,  and the  Lenders  and such  counsel  shall have  received  all
        information and such counterpart  originals or certified or other copies
        of such documents as the Agent may reasonably request.

                5.2.2 No Adverse Changes. There shall not have been any material
        adverse  change in the  financial  condition,  business,  affairs of the
        Borrowers or the Guarantors  since the date of this Loan Agreement which
        in Agent's good faith judgment may  jeopardize in a material  manner the
        ability of Borrowers or  Guarantors  to perform  fully their  respective
        obligations under each applicable Loan Document.

                5.2.3 Other Certificates. Agent shall have received and approved
        such other documents,  and certificates as Agent may reasonably request,
        in form and substance reasonably satisfactory to Agent.

6.      WARRANTIES AND REPRESENTATIONS. Each Borrower warrants and represents to
Agent and each of the  Lenders for the  express  purpose of inducing  Lenders to
enter into this Agreement,  to make each Warehousing  Advance,  and to otherwise
complete all of the transactions  contemplated  hereby,  that, as of the date of
the Agreement Date and upon the date of each Warehousing Advance as follows:

        6.1  Financial  Information.  True  and  complete  copies  of  financial
statements of Borrowers and the Guarantors have been delivered to Agent and each
of the Lenders  and the same fairly  present  the  financial  condition  of such
Person as of the date thereof and no material and adverse change has occurred in
such financial  condition  since the date thereof.  All financial  statements of
such Persons  hereafter  furnished to Agent or any of the Lenders  shall be true
and complete copies thereof and shall fairly present the financial  condition of
such Person as of the date thereof.

        6.2 No Violations.  The establishment of the Facility,  the obtaining of
the  Warehousing  Advances,  and the subsequent  payment and  performance of the
Obligations  evidenced and secured by the Loan Documents  shall not constitute a
violation of, or conflict with, any Legal Requirement, Contractual Obligation or
organizational  document to which Borrowers and/or  Guarantors are a party or by
which it or its property is or may be bound.

        6.3  No  Litigation.   There  are  no  actions,  suits,  proceedings  or
investigations  of any kind  pending  or,  to the  knowledge  of the  Borrowers,
threatened  against the Borrowers,  the Guarantors,  or any of their  respective
Subsidiaries before any court,  tribunal or administrative agency or board that,
if adversely determined,  would reasonably be expected to, either in any case or
in the aggregate,  materially adversely affect the properties, assets, financial
condition  or  business of such  Person or  materially  impair the right of such
Person to carry on business  substantially  as now conducted by it, or result in
any  substantial  liability not  adequately  covered by insurance,  or for which
adequate  reserves  are not  maintained  on the  balance  sheet  of such  Person
(considering  the  Borrowers  and  their  Subsidiaries  as



                                      -21-
<PAGE>



a single  Person for  purposes  of this  Section  6.3),  or which  question  the
validity of this  Agreement  or any of the other Loan  Documents,  or any action
taken or to be taken pursuant hereto or thereto.

        6.4  Franchises,   Patents,  Copyrights,  Etc.  The  Borrowers  and  the
Guarantors each possess all franchises,  patents, copyrights,  trademarks, trade
names,  licenses and permits,  and rights in respect of the foregoing,  adequate
for the conduct of its business  substantially  as now conducted,  without known
conflict with any rights of others.

        6.5 Good Title and No Liens. Borrower and Guarantor,  respectively,  are
the lawful owner of their  respective  Collateral and are and will be the lawful
owner of the  Collateral,  free and clear of all liens and  encumbrances  of any
nature  whatsoever,  other than (x) the liens of Residential  Funding,  Inc. and
Commerce Bank ,which shall be terminated  promptly  after the Closing Date,  and
(y) liens in favor of GNMA in connection with GNMA Mortgage Loans, provided such
liens relate to the subject Mortgage Loan.

        6.6 Use of  Proceeds.  The proceeds of the Loan shall be used solely and
exclusively for those matters set forth in Section 1.2.

        6.7 Entity Matters.

                6.7.1 Organization.

                        (i) PWF is a duly organized validly existing corporation
                in good standing under the laws of Delaware and,  except for the
                State of Illinois,  is duly qualified in the jurisdiction  where
                the  nature  of its  business  is  such  that  qualification  is
                required and where failure to be so qualified  would  materially
                adversely  affect its business or assets,  and has all requisite
                power and  authority  to  conduct  its  business  and to own its
                property, as now conducted or owned, and as contemplated by this
                Loan Agreement.

                        (ii)  Larson  is  a  duly  organized   validly  existing
                corporation in good standing under the laws of New Jersey and is
                duly  qualified  in the  jurisdiction  where  the  nature of its
                business  is such  that  qualification  is  required  and  where
                failure to be so qualified would materially adversely affect its
                business or assets, and has all requisite power and authority to
                conduct its business and to own its  property,  as now conducted
                or owned, and as contemplated by this Loan Agreement.

                        (iii)  Cambridge is a duly  organized  validly  existing
                corporation  in good  standing  under the laws of Delaware  and,
                except for the Commonwealth of Massachusetts,  is duly qualified
                in the  jurisdiction  where the nature of its  business  is such
                that  qualification  is  required  and  where  failure  to be so
                qualified  would  materially  adversely  affect its  business or
                assets, and has all requisite power and authority to conduct its
                business and to own its property, as now conducted or owned, and
                as contemplated by this Loan Agreement.

                6.7.2  Ownership,   Subsidiaries  and  Taxpayer   Identification
        Numbers.



                                      -22-
<PAGE>

                        (i) All of the stockholders of each of the Borrowers and
                a description  of the ownership  interests held by the same, and
                each of the  Borrowers'  Subsidiaries,  are  listed on  Schedule
                6.7.2  and no  additional  ownership  interests,  or  rights  or
                instruments convertible into such ownership interests, exist.

                        (ii)  The  taxpayer  identification  numbers  and  state
                organizational  numbers (if applicable) of the foregoing Persons
                are accurately stated on Schedule 6.7.2.

                        (iii)  The  Borrowers  and the  Guarantors  are each the
                owner, free and clear of all liens and  encumbrances,  of all of
                the  issued  and  outstanding  capital  stock  of each of  their
                respective Subsidiaries.  Except as set forth on Schedule 6.7.2,
                all shares of such stock have been validly  issued and are fully
                paid  and  nonassessable  and  no  rights  to  subscribe  to any
                additional shares have been granted,  and no options,  warrants,
                or  similar  rights  are  outstanding  except  as set  forth  on
                Schedule 6.7.2.

                6.7.3 Authorization.  The execution, delivery and performance of
        this  Agreement and the other Loan  Documents to which the Borrowers and
        the Guarantors are to become a party and the  transactions  contemplated
        hereby and thereby (i) are within the  authority  of such  Person,  (ii)
        have been duly authorized by all necessary corporate proceedings,  (iii)
        do not  conflict  with or result in any breach or  contravention  of any
        Legal  Requirement  to which such  Person is  subject  or any  judgment,
        order,  writ,  injunction,  license or permit applicable to such Person,
        and  (iv)  do  not  conflict   with  any   provision  of  such  Person's
        organization  documents  or other  charter  documents  or bylaws  of, or
        Contractual  Obligation,  except  where such  conflict  would not have a
        materially adverse effect on the business, assets or financial condition
        of such Person.

        6.8 Valid and  Binding.  Each of the Loan  Documents  constitute  legal,
valid and binding  obligations  of the  Borrowers and the  Guarantors  under the
respective  Loan  Document  to which  they are  party,  in  accordance  with the
respective terms thereof, subject to bankruptcy,  insolvency and similar laws of
general  application  affecting  the rights and remedies of creditors  and, with
respect to the availability of the remedies of specific enforcement,  subject to
the discretion of the court before which any proceeding therefor may be brought.

        6.9 Deferred Compensation and ERISA.  Borrowers do not have any pension,
profit  sharing,  stock  option,  insurance  or  other  arrangement  or plan for
employees covered by Title IV of the Employment Retirement Security Act of 1974,
as now or hereafter  amended  ("ERISA")  except as may be designated to Agent in
writing by Borrowers from time to time ("ERISA Plan") and no "Reportable  Event"
as defined in ERISA has occurred and is now continuing  with respect to any such
ERISA Plan.  The  granting of the Loan,  the  performance  by Borrowers of their
obligations  under  the  Loan  Documents,   and  Borrowers'  conducting  of  its
operations do not and will not violate any provisions of ERISA.

        6.10 No Materially Adverse Contracts,  Etc. None of the Borrowers or the
Guarantors nor any of their  respective  Subsidiaries is subject to any charter,
corporate or other legal restriction,  or any judgment,  decree,  order, rule or
regulation  that has or is expected in the future to have a  materially  adverse
effect on the business,  assets or financial  condition of such Person.  None of
the Borrowers or



                                      -23-
<PAGE>



the  Guarantors  nor any of  their  respective  Subsidiaries  is a party  to any
contract  or  agreement  that has or is  expected,  in the  judgment of the such
Person's officers, to have any materially adverse effect on the business of such
Person or such Person's Subsidiaries.

        6.11 Compliance With Other Instruments, Laws, Etc. None of the Borrowers
or the Guarantors nor any of their  respective  Subsidiaries  is in violation of
any provision of its charter or other organization  documents,  by-laws,  or any
Contractual Obligations or any Legal Requirements, in any of the foregoing cases
in a manner that could  result in the  imposition  of  substantial  penalties or
materially and adversely affect the financial condition,  properties or business
of such Person or such Person's Subsidiaries.

        6.12 Tax Status.  The Borrowers and the Guarantors and their  respective
Subsidiaries  (a) have made or filed all federal and state  income and all other
tax returns, reports and declarations required by any jurisdiction to which such
Person is subject, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being  contested in good faith and by appropriate  proceedings  and
(c) has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or  declarations  apply.  Except for taxes being contested as provided in clause
(b),  above,  there are no unpaid taxes in any material amount claimed to be due
by the taxing authority of any  jurisdiction,  and the officers of the foregoing
Persons know of no basis for any such claim.

        6.13 Holding Company and Investment  Company Acts. None of the Borrowers
nor any of their Subsidiaries is a "holding company",  or a "subsidiary company"
of a "holding company",  or an "affiliate" of a "holding company", as such terms
are defined in the Public  Utility  Holding  Company  Act of 1935;  nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.

        6.14 Certain Transactions.  Except as set forth in Schedule 6.14 hereof,
as of the date of this Agreement, none of the officers, trustees,  directors, or
employees of the Borrowers or any of their  Subsidiaries is presently a party to
any transaction with the Borrowers or any of their Subsidiaries  (other than for
services  as  employees,  officers  and  directors),   including  any  contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer, trustee, director or such employee or
any  corporation,  partnership,  trust or other  entity  in which  any  officer,
trustee,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

        6.15 Regulations U and X. No portion of any Warehousing Advance is to be
used for the purpose of purchasing or carrying any "margin  security" or "margin
stock" as such terms are used in  Regulations  U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

        6.16 Loan Documents.  All of the  representations  and warranties of the
Borrowers and the Guarantors  made in their  respective  Loan Documents are true
and correct in all material respects.



                                      -24-
<PAGE>



        6.17 No Material Change: No Default.  There has been no material adverse
change in the financial condition,  business, affairs of any of the Borrowers or
the  Guarantors,  or their  respective  Subsidiaries  since the date of its last
financial statement most recently delivered to the Agent. No Default or Event of
Default exists under any of the Loan Documents.

        6.18 No Broker or Finder.  None of the  Borrowers,  nor anyone on behalf
thereof has dealt with any broker, finder or other person or entity who or which
may be entitled to a broker's or finder's fee, or other compensation, payable by
the Agent or any of the Lenders in connection with this Loan.

        6.19  Background  Information  and  Certificates.  All  of  the  factual
information  contained or referred to in Section 1 of this  Agreement and in the
Exhibits and Schedules to this Agreement,  and in the certificates  furnished to
the Agent or any of the Lenders by or on behalf of Borrowers  or the  Guarantors
in  connection  with this  Agreement  or any other  Loan  Document,  is true and
complete in all material respects,  and omits no material fact necessary to make
the same not misleading.

        6.20  Servicing.  Schedule  6.20  is a true  and  complete  list of each
Borrower's Servicing  Portfolio.  All of each Borrower's Servicing Contracts are
in full force and  effect,  and are  unencumbered  by Liens  other than Liens of
Residential Funding,  Inc. and Commerce Bank, which shall be terminated promptly
after the Closing Date.  No default or event that,  with notice or lapse of time
or both,  would become a default,  exists under any of the Borrowers'  Servicing
Contracts.

        6.21 Assumed  Names The  Borrowers do not  originate  Mortgage  Loans or
otherwise  conduct  business  under any names  other than its legal name and the
assumed names set forth on Schedule 6.22. Each Borrower has made all filings and
taken all other action as may be required under the laws of any  jurisdiction in
which it originates  Mortgage  Loans or otherwise  conducts  business  under any
assumed  name.  Borrowers'  use of the assumed  names set forth on Schedule 6.22
does not conflict  with any other  Person's  legal rights to any such name,  nor
otherwise give rise to any liability by Borrower to any other Person.

Each request by any Borrower for a Warehousing  Advance: (i) shall constitute an
affirmation  by such Borrower on behalf of itself and the other  Borrowers  that
the foregoing  representations  and warranties remain true and correct as of the
date of such request (except as to matters specifically  disclosed in writing to
Agent and each of the  Lenders  prior to or  simultaneously  with  such  written
request,  and  except  to the  extent of  changes  resulting  from  transactions
contemplated  and permitted by this  Agreement and the other Loan  Documents and
changes  occurring  in the  ordinary  course of  business  that singly or in the
aggregate  are not  materially  adverse,  and  except  to the  extent  that such
representations  and warranties relate expressly to an earlier date) and, unless
Agent  and  each  of the  Lenders  is  notified  to the  contrary  prior  to the
disbursement  of the requested  Warehousing  Advance,  will be so on the date of
such  Warehousing  Advance,  and (ii) shall  constitute the  representation  and
warranty of  Borrowers  that the  information  set forth in each such request is
true and  correct  and omits no  material  fact  necessary  to make the same not
misleading.

7.      COVENANTS.  Each Borrower covenants and agrees that from the date hereof
and so long as  Lenders  have any  obligation  to make the  Warehousing  Advance
hereunder, or any indebtedness is



                                      -25-
<PAGE>



outstanding  hereunder,  or any Warehousing  Advance or other Obligations remain
outstanding, as follows:

        7.1 Punctual  Payment.  Each  Borrower will duly and  punctually  pay or
cause to be paid the principal  and interest on the Loan and all interest,  fees
and other Obligations provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes,  as well as all other sums owing pursuant
to the Loan Documents.

        7.2 Maintenance of Office.  PWF will maintain its chief executive office
in Mineola,  New York,  Cambridge  will maintain its chief  executive  office in
Mineola,  New York,  and Larson  will  maintain  its chief  executive  office in
Bernardsville,  New  Jersey,  or at such  other  place in the  United  States of
America as the Borrowers shall designate upon not less than forty five (45) days
prior written notice to the Agent.

        7.3 Records and Accounts. Each Borrower will (a) keep, and cause each of
its  Subsidiaries  to keep,  true and  accurate  records and books of account in
which full,  true and correct  entries will be made in accordance  with GAAP and
(b) maintain  adequate  accounts and  reserves for all taxes  (including  income
taxes),  depreciation  and  amortization of its properties and the properties of
its Subsidiaries, contingencies, and other reserves.

        7.4 Notices.

                7.4.1 Defaults.  Each Borrower will promptly notify the Agent in
        writing of the  occurrence  of any Default or Event of Default  known to
        Borrower.  If any Person  shall give any notice or take any other action
        in respect of a claimed default (whether or not constituting an Event of
        Default)   under  this   Agreement  or  under  any  note,   evidence  of
        indebtedness,  indenture or other obligation to which or with respect to
        which the Borrowers or any of their  Subsidiaries is a party or obligor,
        whether as principal or surety, and such default would permit the holder
        of such  note  or  obligation  or  other  evidence  of  indebtedness  to
        accelerate  the  maturity  thereof,  which  acceleration  would  have  a
        material adverse effect on the Borrowers,  the Borrowers shall forthwith
        give  written  notice  thereof  to the Agent,  describing  the notice or
        action and the nature of the claimed default.

                7.4.2 Notification of Claims against  Collateral.  The Borrowers
        will,  promptly  (but in any event not later  than ten (10) days  after)
        upon becoming aware  thereof,  notify the Agent in writing of any events
        relating to the Collateral that materially  adversely  affect the rights
        of the Agent or the Lenders with respect thereto.

                7.4.3 Notice of Litigation  and Judgments.  The Borrowers  will,
        and  will  cause  each  of  their  respective   Subsidiaries,   and  the
        Guarantors,  and any Subsidiaries of the Guarantors,  to, give notice to
        the Agent and each of the  Lenders in writing  (within  ten (10) days of
        the date on which any such Person  shall  become  aware  thereof) of any
        litigation  or  proceedings  threatened  or any pending  litigation  and
        proceedings  affecting  such  Person or to which such Person is or is to
        become a party involving an amount in controversy  exceeding $250,000.00
        or that could reasonably be expected to have a materially adverse effect
        on such Person and stating the nature



                                      -26-
<PAGE>



        and status of such  litigation or  proceedings.  The Borrowers will, and
        will cause each of their respective  Subsidiaries,  the Guarantors,  the
        Subsidiaries of the Guarantors,  to give notice to the Agent and each of
        the Lenders,  in writing,  in form and detail  satisfactory to the Agent
        and each of the Lenders,  (within ten (10) days of the date on which any
        such Person  shall  become  aware  thereof) of any judgment in excess of
        $250,000.00 not covered by insurance,  final or otherwise,  against such
        Persons.

                7.4.4  Eligibility  Impaired.  The Borrowers will give notice to
        the Agent and each of the Lenders of (x) the  suspension,  revocation or
        termination of any Borrower's  eligibility,  in any respect, as approved
        lender,  seller/servicer  or issuer as described  under Section 8.1, and
        (y) the  transfer,  loss,  nonrenewal  or  termination  of any Servicing
        Contracts  to which any  Borrower  is a party,  or which is held for the
        benefit  of any  Borrower,  and the  reason  for  that  transfer,  loss,
        nonrenewal or termination.

        7.5 Financial  Statements  and Reports.  The Borrowers  shall furnish or
cause to be  furnished  to the Agent and each of the Lenders  from time to time,
the following  financial  statements and reports and other  information,  all in
form, manner of presentation and substance reasonably acceptable to Agent:

                7.5.1  Annual  Statements.  As soon as  practicable,  but in any
        event not later than one hundred twenty (120) days after the end of each
        fiscal year of the Borrowers,  the unaudited  consolidating (but only as
        among  the   Borrowers)   balance  sheet  of  the  Borrowers  and  their
        Subsidiaries  at  the  end of  such  year,  and  the  related  unaudited
        consolidating  (but only as among the Borrowers)  statements of earnings
        and cash flows for such year, each setting forth in comparative form the
        figures for the previous  fiscal year and all such  statements  to be in
        reasonable  detail,  prepared  in  accordance  with  Generally  Accepted
        Accounting  Principles,  and accompanied by an auditor's report prepared
        without  qualification  by an independent  certified  public  accountant
        reasonably acceptable to the Agent.

                7.5.2  Projections.  As soon as  practicable,  but no later than
        forty-five  (45)  days  prior  to the  end of  each  fiscal  year of the
        Borrowers,  the  Borrowers  shall  provide the Agent with the  operating
        projections  for  the  Borrowers  for  the  next  fiscal  year in a form
        satisfactory to the Agent.

                7.5.3 Quarterly Statements.  As soon as practicable,  but in any
        event not  later  than  sixty  (60)  days  after the end of each  fiscal
        quarter of the Borrowers (including for the fourth fiscal quarter, which
        shall be subject to normal year end audit  adjustments),  the management
        prepared   consolidated   balance  sheet  of  the  Borrowers  and  their
        Subsidiaries  at the end of such  quarter,  and the  related  management
        prepared  consolidated  statements  of earnings for such  quarter,  each
        setting forth in  comparative  form the figures for the previous  fiscal
        quarter and all such statements to be in reasonable detail,  prepared in
        accordance   with  Generally   Accepted   Accounting   Principles,   and
        accompanied by an auditor's report prepared without  qualification by an
        independent  certified public  accountant  reasonably  acceptable to the
        Agent.

                7.5.4  Pipeline  Reports At the Agent's  request,  a  commitment
        summary and pipeline report dated as of the end of such month.



                                      -27-
<PAGE>



                7.5.5 Public  Filings.  Within ten (10)  Business Days after the
        filing or mailing thereof,  copies of all material of a financial nature
        filed with the Securities and Exchange  Commission or sent to the public
        stockholders of Charter Municipal Mortgage Acceptance Company.

                7.5.6 Compliance Certificate.  Concurrently with the delivery of
        the financial  statements referred to in Sections 7.5.1 and 7.5.2 above,
        a  certificate  (to be in the form of Exhibit H or on such other form as
        the  Agent  may  from  time  to  time   prescribe)   of  an   Authorized
        Representative   stating   that,   to  the   best  of  such   Authorized
        Representative's  knowledge,  the Borrower, the Guarantor and PWF during
        such period observed or performed in all material  respects all of their
        covenants and other  agreements,  and satisfied in all material respects
        every  material  condition,  contained in this Agreement to be observed,
        performed or satisfied by them, and that such Authorized  Representative
        has obtained no  knowledge of any Default or Event of Default  except as
        specified in such  certificate  and such  certificate  shall include the
        calculations  in  reasonable  detail  required  to  indicate  Borrower's
        compliance with Section 7.24.1.

                7.5.7   Accountant's   Letters.   Contemporaneously   with   the
        Borrower's  receipt  thereof,  copies  of  all  accountants'  management
        letters  delivered  to  any  of  the  Borrower,  its  Subsidiaries,  the
        Guarantor or any of the Guarantor's Subsidiaries.

                7.5.8 Servicing  Portfolio  Report.  As soon as available and in
        any event  within  45 days  after the end of each  Calendar  Quarter,  a
        consolidated report ("Servicing  Portfolio Report") as of the end of the
        Calendar Quarter, as to all Mortgage Loans the servicing rights to which
        are  owned  by  Borrower  (specified  by  investor  type,  recourse  and
        non-recourse)  regardless  of whether  the  Mortgage  Loans are  Pledged
        Loans. The Servicing Portfolio Report must indicate which Mortgage Loans
        (1) are  current  and in good  standing,  (2) are more than 30, 60 or 90
        days past due, (3) are the subject of pending  bankruptcy or foreclosure
        proceedings,  or (4) have been converted  (through  foreclosure or other
        proceedings in lieu of foreclosure) into real estate owned by, Borrower.

                7.5.9 Production  Report.  As soon as available and in any event
        within 45 days after the end of each  fiscal  quarter in the fiscal year
        of each Borrower, a consolidated loan production report as of the end of
        that fiscal  quarter,  presenting the total dollar volume and the number
        of Mortgage Loans  originated and closed or purchased during that fiscal
        quarter and for the fiscal year-to- date, specified by property type and
        loan type.

                7.5.10 Other Reports.  Other reports in respect of Pledged Loans
        and Pledged Securities, in such detail and at such times as Agent in its
        discretion may reasonably request.

                7.5.11 Agency Notices. With reasonable promptness,  such further
        information regarding the business, operations,  properties or financial
        condition of Borrowers as Agent may reasonably request, including copies
        of any audits  completed by HUD,  Ginnie Mae, Fannie Mae or Freddie Mac,
        as well as any material  notices to any of the Borrowers from any of the
        foregoing Persons.



                                      -28-
<PAGE>



                7.5.12 Valuation of Servicing  Portfolio As soon as practicable,
        but in any event not later  than  sixty  (60) days after the end of each
        fiscal quarter of the Borrowers,  the management  prepared  valuation of
        Servicing Portfolio in form and substance satisfactory to the Lender.

                7.5.13  Additional  Financial  Information.  From  time to time,
        within a reasonable period of time of the request,  such other financial
        data and information as the Agent or any Lender may reasonably request.

        7.6 Existence; Conduct of Business.

                7.6.1 (a) Except as a  consequence  of a  transaction  permitted
        pursuant to Section  7.18.1 (i) or (ii),  the Borrowers will do or cause
        to be done all things  necessary  to preserve and keep in full force and
        effect (i) PWF's  existence  as a Delaware  corporation,  (ii)  Larson's
        existence as a New Jersey corporation,  and (iii) Cambridge's  existence
        as a Delaware corporation.

                (b) Each of the Borrowers will do or cause to be done all things
        necessary  to  preserve  and keep in full  force all of its  rights  and
        franchises,  except where such failure would not have a material adverse
        effect  on the  business,  assets  or  financial  condition  of any such
        Person.

                (c) Each of the  Borrowers  will  only  engage  in the  mortgage
        banking   business  with  primary  focus  on   multifamily   residential
        mortgages.

                7.6.2 Without  limiting the  provisions of Section  7.6.1,  each
        Borrower  shall  preserve and  maintain  all of its rights,  privileges,
        licenses and franchises  necessary or desirable in the normal conduct of
        their  respective   business,   including  its  eligibility  as  lender,
        seller/servicer  and issuer  described  under  Section 8.1;  conduct its
        respective  business in an orderly and efficient manner;  maintain a net
        worth of acceptable  assets as required for maintaining their respective
        eligibilities  as lender,  seller/servicer  and issuer  described  under
        Section 8.1;  and make no material  change in the nature or character of
        their  respective  business or engage in any business in which they were
        not engaged on the date of this  Agreement,  except as  permitted by the
        Agreement.

        7.7 Insurance.  Schedule 7.7 sets forth all presently existing insurance
maintained by the Borrowers.  Each of the Borrowers will maintain insurance with
respect to its other  properties,  and will cause  each of its  Subsidiaries  to
maintain with financially sound and reputable  insurers,  insurance with respect
to such properties and its business against such casualties and contingencies as
shall be in  accordance  with the general  practices  of  businesses  engaged in
similar activities in similar  geographic areas and in amounts,  containing such
terms, in such forms and for such periods as may be reasonable and prudent.

        7.8 Taxes and Trade Debt.  Each of the  Borrowers  will,  and will cause
each of its  Subsidiaries  to, duly pay and  discharge,  or cause to be paid and
discharged,  before the same shall become  overdue,  all taxes,  assessments and
other  governmental  charges imposed upon it and its real properties,  sales and
activities, or any part thereof, or upon the income or profits therefrom, except
for



                                      -29-
<PAGE>



those taxes,  assessments or charges which any such Person is contesting in good
faith by appropriate  proceedings and with respect to which appropriate reserves
have been  established  and are being  maintained in accordance  with  Generally
Accepted Accounting Principles.

        7.9 Compliance with Laws, Contracts, Licenses, and Permits. Except where
the failure to comply would not have a material  adverse effect on the business,
operations,  properties,  assets, or financial condition of the Borrowers or the
Guarantors and their respective Subsidiaries,  each of the Borrowers will comply
with,  and will  cause  each of the  foregoing  Persons  to comply  with (a) all
applicable  Legal  Requirements now or hereafter in effect wherever its business
is conducted,  (b) the provisions of its Constituent Documents,  (c) all of such
Person's Contractual Obligations, (d) all agreements and instruments to which it
is a party  or by  which it or any of its  properties  may be bound  and (e) all
applicable decrees,  orders, and judgments.  If at any time while any Obligation
is outstanding or the Lenders have any obligation to make  Warehousing  Advances
hereunder  any  Governmental   Authorization  or  other  third  party  consents,
approvals,  or  notifications  shall become  necessary or required in order that
Borrower  may fulfill  any of its  obligations  hereunder,  the  Borrowers  will
promptly take or cause to be taken all reasonable  steps within the power of the
Borrowers  to  obtain  such  Governmental  Authorization  or other  third  party
consents,  approvals,  or  notifications,  and furnish the Agent and the Lenders
with  evidence  thereof,  unless the  failure to do so would not have a material
adverse affect on the Borrowers.

        7.10  Bank  Accounts.  To  permit  the Agent to  monitor  the  financial
performance  of  each of the  Borrowers,  the  Borrowers  shall  maintain  their
Operating  Accounts,  other primary  deposit and  investment  accounts,  and all
escrow and custodial  accounts with Fleet  National  Bank.  The Borrowers  shall
diligently  pursue the  establishment  of the  aforementioned  accounts at Fleet
National Bank and shall  diligently  pursue the closing of existing  accounts at
other banks, and the Borrowers acknowledge and agree that the foregoing shall be
completed  no later  than  June  30,  2002,  with  time  being  of the  essence.
Notwithstanding the foregoing, PWF shall be permitted to maintain the Fannie Mae
Reserve Account at State Street Bank and Trust Company.

        7.11 Closing Instructions.  Each Borrower shall Indemnify and hold Agent
and each Lender and all those  claiming by,  through or under the Agent and each
of the  Lenders,  harmless  from and  against  any  loss,  including  reasonable
attorneys'  fees and costs,  attributable  to the failure of any title insurance
company,  agent or approved  attorney to comply with Borrower's  disbursement or
instruction  letter  relating  to any  Mortgage  Loan.  Agent  has the  right to
pre-approve Borrower's disbursement or instruction letter to the title insurance
company,  agent or approved  attorney in any case in which  Borrower  intends to
obtain  a  Warehousing  Advance  against  the  Mortgage  Loan to be  created  at
settlement or to pledge that Mortgage Loan as Collateral  under this  Agreement.
Borrower's  disbursement  or instruction  letter must state that Agent,  for the
benefit of the Lenders has a security interest in any amounts advanced to fund a
Mortgage  Loan and in the  Mortgage  Loan  funded  with those  amounts  and must
require the title insurance company,  agent or approved attorney involved in the
transaction  to return any  amounts  advanced by Lender and not used to fund the
Mortgage Loan.

        7.12 Other Loan  Obligations  Each  Borrower  shall  perform  all of its
material  obligations  under the terms of each loan agreement,  note,  mortgage,
security  agreement  or debt  instrument  by which such  Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing



                                      -30-
<PAGE>



of a declared  default  under or the  termination,  cancellation,  reduction  or
nonrenewal  of any of its other  lines of credit  or  agreements  with any other
lender. Schedule 7.12 is a true and complete list of all such lines of credit or
agreements as of the date of this Agreement.

        7.13 Further Assurances. (a) Each Borrower will cooperate with, and will
cause each of its  Subsidiaries,  and the Guarantors to cooperate with the Agent
and the Lenders and execute such further instruments and documents as any Lender
or the Agent shall  reasonably  request to carry out to their  satisfaction  the
transactions contemplated by this Agreement and the other Loan Documents.

        (b) Without limiting the generality of the foregoing, on or before March
31, 2002,  the Borrowers  shall provide the Agent with  certificates  of foreign
qualification  for each (i) PWF from the  Secretary  of State  for the  State of
Illinois,  and (ii) Cambridge from the Secretary of State of the Commonwealth of
Massachusetts

        7.14 Restrictions on Liens, Transfers and Additional Debt.

                7.14.1 Restrictions on Indebtedness. The Borrowers will not, and
        will not permit any of their  Subsidiaries  to, create,  incur,  assume,
        guarantee  or be or  remain  liable,  contingently  or  otherwise,  with
        respect to any Indebtedness other than:

                        (i) Indebtedness to the Lenders arising under any of the
                Loan Documents;

                        (ii)  Current  liabilities  of the  Borrowers  or  their
                Subsidiaries incurred in the ordinary course of business but not
                incurred  through  (i) the  borrowing  of  money,  or  (ii)  the
                obtaining of credit  except for credit on an open account  basis
                customarily  extended and in fact  extended in  connection  with
                normal purchases of goods and services;

                        (iii)  Indebtedness  in respect  of taxes,  assessments,
                governmental  charges or levies and claims for labor,  materials
                and  supplies to the extent that payment  therefor  shall not at
                the  time  be  required  to  be  made  in  accordance  with  the
                provisions of Section 7.8;

                        (iv) Secured  purchase money debt or  capitalized  lease
                obligations;

                        (v)  Indebtedness in respect of judgments or awards that
                have  been in force  for less  than the  applicable  period  for
                taking an appeal so long as execution  is not levied  thereunder
                or in  respect of which the  Borrower  shall at the time in good
                faith be prosecuting an appeal or proceedings  for review and in
                respect of which a stay of  execution  shall have been  obtained
                pending such appeal or review;

                        (vi) Endorsements for collection, deposit or negotiation
                and warranties of products or services, in each case incurred in
                the ordinary course of business;

                        (vii) (a) the  Borrowers'  Indebtedness  pursuant to the
                RFC Line and (b) Larson's  Indebtedness pursuant to the Commerce
                Line;  and (c) up to  $750,000 of  Indebtedness



                                      -31-
<PAGE>



                incurred  in  the  ordinary   course  of  business  for  capital
                expenditures (e.g computer system); provided, however, effective
                as the Closing Date, the Borrowers  shall no longer obtain loans
                and  advances  under the RFC Line,  and  Larson  shall no longer
                obtain loans and advances  under the Commerce  Line, and each of
                the Borrowers  shall  terminate  the RFC Line,  and Larson shall
                terminate the Commerce Line,  and the Borrowers  shall repay all
                amounts  due  and  owing  under  each of the  RFC  Line  and the
                Commerce Line, on or before March 30, 2002;  provided,  however,
                that PWF and the PWF  Subsidiaries,  as  applicable,  may obtain
                loans  from RFC under the RFC Line in order to fund  during  the
                week of December 24, 2001, the two pending mortgage  closings in
                the  respective   amounts  of   approximately   $14,000,000  and
                $700,000.

                        (viii)  Indebtedness  to Fannie Mae,  Freddie Mac, GNMA,
                FHA or other parties with whom the PWF and the PWF  Subsidiaries
                originate,  sell,  repurchase or service  Mortgage Loans, to the
                extent directly  relating to or arising out of such origination,
                sale,  repurchase,  or  servicing  in  the  ordinary  course  of
                business;

                        (ix) Indebtedness secured by real property acquired upon
                foreclosure of Mortgages, which, either (x) is so secured at the
                time of such  acquisition,  or (y) is  directly  related to such
                real  property,  not in excess of the fair market value thereof,
                and   reasonably   expected  by  the  Borrower  or  the  subject
                Subsidiary to be recovered from the sale or other disposition of
                the subject real property;

                        (x) Unsecured  Indebtedness  for borrowed money incurred
                in the ordinary  course of business and not exceeding  $750,000,
                plus  intercompany  liabilities which have a maturity date which
                is later than the Maturity  Date and which are  subordinated  to
                the Obligations pursuant to subordination  agreements reasonably
                satisfactory  to the Agent which shall permit  repayment as long
                as (A) no  Event of  Default  then  exists,  and (B) no Event of
                Default would thereupon occur (including on a pro forma basis as
                if applicable  financial covenants were tested as of the date of
                such repayment;

                        (xi)   Indebtedness   (exclusive  of  the   Indebtedness
                referred  to in  clause  (x)  above)  incurred  to  finance  the
                purchase  or leasing of  equipment,  in the  ordinary  course of
                business;

                        (xii)  Indebtedness  incurred in the ordinary  course of
                business  secured  by one  or  more  specific  assets,  in  each
                instance the principal amount of which shall not exceed the GAAP
                book value of the subject asset(s);

                        (xiii) Guaranties by any Borrower for the benefit of any
                other Borrower or such  Borrower's  Subsidiaries in the ordinary
                course of  business;
                        (xiv)  other  Indebtedness  existing on the date of this
                Agreement and listed and described on Schedule 7.14.1 hereto;

                        (xv)  any  Indebtedness  due  or to  become  due  to the
                Selling Stockholders under the Stock Purchase Agreement.



                                      -32-
<PAGE>



                7.14.2  Restrictions  on Liens,  Etc.  Except in connection with
        their purchase, origination and sale from time to time of Mortgage Loans
        and related  assets in the  ordinary  course of business as conducted on
        the Agreement  Date,  the Borrowers will not, and will not permit any of
        their  Subsidiaries  to,  (a) create or incur or suffer to be created or
        incurred or to exist any lien,  encumbrance,  mortgage,  pledge, charge,
        restriction  or other  security  interest  of any  kind  upon any of its
        property  or  assets of any  character  whether  now owned or  hereafter
        acquired,  or upon the income or profits therefrom;  (b) transfer any of
        its  property  or assets  or the  income or  profits  therefrom  for the
        purpose  of  subjecting  the  same to the  payment  of  Indebtedness  or
        performance  of any other  obligation  in  priority  to  payment  of its
        general creditors;  (c) acquire,  or agree or have an option to acquire,
        any property or assets upon conditional sale or other title retention or
        purchase money security agreement, device or arrangement;  (d) suffer to
        exist for a period of more than  thirty  (30) days  after the same shall
        have been incurred any  Indebtedness  or claim or demand against it that
        if unpaid might by law or upon  bankruptcy or insolvency,  or otherwise,
        be given any  priority  whatsoever  over its general  creditors;  or (e)
        sell,  assign,  pledge or  otherwise  transfer  any  accounts,  contract
        rights,  general  intangibles,  chattel  paper or  instruments,  with or
        without  recourse;(f)  agree to a negative pledge in favor of any Person
        other than the Agent or the Lenders pursuant to the Acquisition Facility
        with  respect to any assets or rights,  now owned or  hereafter  arising
        provided  that the  Borrowers  and any  Subsidiary  of the Borrowers may
        create or incur or suffer to be created or incurred or to exist:

                        (i) liens on properties to secure taxes, assessments and
                other  government  charges  or claims  for  labor,  material  or
                supplies  in respect  of  obligations  not  overdue or which are
                being  contested in good faith by  appropriate  proceedings  for
                which adequate reserves  determined in accordance with GAAP have
                been  established  (and as to which the property  subject to any
                such lien is not yet subject to foreclosure,  sale,  collection,
                levy or loss on account thereof);

                        (ii) deposits or pledges made in connection  with, or to
                secure   payment  of,   workmen's   compensation,   unemployment
                insurance,   old  age   pensions   or  other   social   security
                obligations;

                        (iii) liens on  properties  in respect of  judgments  or
                awards,  the Indebtedness  with respect to which is permitted by
                Section 7.14.1(iv);

                        (iv) liens on property  granted in connection  with each
                of the RFC Line and the  Commerce  Line,  securing  Indebtedness
                permitted by Section 7.14.1(vii);

                        (v)  presently  outstanding  liens  listed  on  Schedule
                7.14.2 hereto;

                        (vi) liens in favor of the Agent and the  Lenders  under
                the Loan  Documents;liens  securing  Indebtedness to Fannie Mae,
                Freddie Mac,  GNMA,  FHA or other parties with whom the Borrower
                or its  Subsidiaries  originate,  sell,  repurchase or otherwise
                service  Mortgage  Loans  provided  such  liens  relate  to  the



                                      -33-
<PAGE>

                foregoing transactions, but only to the extent directly relating
                to or arising  out of such  origination,  sale,  repurchase,  or
                servicing in the ordinary course of business;

                        (vii)  liens  securing   Indebtedness  secured  by  real
                property  acquired upon  foreclosure of Mortgages,  which either
                (x) is so  securing at the time of such  acquisition,  or (y) is
                directly  related  to such real  property,  not in excess of the
                fair  market  value  thereof,  and  reasonably  expected  by the
                Borrower or the subject Subsidiary to be recovered from the sale
                or other disposition of the subject real property;

                        (viii)  liens  arising  from  good  faith   deposits  in
                connection  with or to  secure  performance  of  tenders,  bids,
                leases,  government  contracts,  performance and return-of-money
                bonds and other  similar  obligations  incurred in the  ordinary
                course of  business  (other than  obligations  in respect of the
                payment of borrowed money);

                        (ix)  liens   arising   from  good  faith   deposits  in
                connection   with  or  to  secure   performance   of   statutory
                obligations and surety and appeal bonds;

                        (x) easements,  rights-of-way,  restrictions  (including
                zoning   restrictions),   matters  of  plat,  minor  defects  or
                irregularities   in  title  and   other   similar   charges   or
                encumbrances not, in any material respect,  impairing the use of
                the encumbered property for its intended purposes;

                        (xi) liens securing  Indebtedness  permitted pursuant to
                Section  7.12.1(xi),  provided  such lien does not extend beyond
                the equipment which is the subject of the Indebtedness;

                        (xii)  liens  securing   credit   enhancement   products
                supporting multi-family housing project bonds or other financing
                of  multi-family  housing  projects  in the  ordinary  course of
                business  which  indebtedness  in permitted  pursuant to Section
                7.12.1(xiv)(A);

                        (xiii)  liens in favor of GNMA in  connection  with GNMA
                Mortgage  Loans,  provided  such  liens  relate  to the  subject
                Mortgage Loan.

        7.15  Distributions.

                        7.15.1 Permitted Distributions. So long as no Default or
                Event of Default has occurred and is continuing  (unless  waived
                by Agent  and the  Requisite  Lenders  as set  forth in  Section
                11.4.1) the Borrowers may make any payments or  distributions to
                the  Guarantor  and  Affiliates  of  the  Guarantor  ("Permitted
                Distributions")

        7.16  Restrictions  on  Investments.  Borrowers  will not,  and will not
permit  any of their  Subsidiaries  to make or  permit  to  exist  or to  remain
outstanding any Investment except an Investment which are in:



                                      -34-
<PAGE>



                        (i) Cash Equivalents (provided,  however, the Fannie Mae
                Reserve  Account may be invested  for a period that  exceeds 364
                days);

                        (ii) property acquired in the normal and ordinary course
                of  each   Borrower's   present   business  of  originating  and
                purchasing   Mortgage  Loans  (including  property  acquired  on
                foreclosure   of   Mortgages   and,   as  to  PWF  and  the  PWF
                Subsidiaries,  the origination and purchase of Mortgage Loans in
                the  ordinary  course of their  business)  as  conducted  on the
                Agreement  Date and any  other  business  permitted  under  this
                Agreement; and

                        (iii) Fannie Mae common  stock which is currently  owned
                by the Borrowers;

                        (iv)  Investments  in  Subsidiaries  provided that if an
                Event of Default has occurred and is  continuing,  Borrower will
                not,  and will not permit any of its  Subsidiaries  to, make any
                new Investments in Subsidiaries.

        7.17  Indemnification  Against  Payment of Brokers' Fees.  Each Borrower
agrees to defend, indemnify and hold harmless Agent and each of the Lenders from
and against any and all liabilities,  damages,  penalties,  costs, and expenses,
relating  in any  manner to any  brokerage  or  finder's  fees in respect of the
Facility (except as resulting from actions of the Agent or any Lender).

        7.18   Merger, Consolidation.

                7.18.1 The Borrowers  will not, and will not permit any of their
        Subsidiaries to, become a party to any merger or consolidation, or agree
        to or effect any asset  acquisition or disposition or stock  acquisition
        or disposition  (other than the  acquisition or disposition of assets in
        the  ordinary  course  of  business   consistent  with  past  practices,
        including the  acquisition or disposition of Mortgage Loans and property
        acquired  on  foreclosure  of  Mortgages)   except  (i)  the  merger  or
        consolidation  of one or more of the  Subsidiaries  of any Borrower with
        and into such Borrower,  (ii) the merger or consolidation of two or more
        Subsidiaries  of any Borrower,  and (iii) other  dispositions of Service
        Contracts in an amount not to exceed five percent (5%) of the  Servicing
        Portfolio during any twelve (12) month period.

                7.18.2 The Borrowers  will not, and will not permit any of their
        Subsidiaries  to cease actively to engage in the business of originating
        or acquiring  Mortgage  Loans or make any other  material  change in the
        nature or scope of the business in which each Borrower engages as of the
        date of this Agreement.

                7.18.3 The Borrowers  will not, and will not permit any of their
        Subsidiaries  to sell,  assign,  lease,  convey,  transfer or  otherwise
        dispose of (whether in one transaction or a series of transactions)  all
        or any substantial part of such Person's business or assets, whether now
        owned or acquired  after the Closing  Date,  other than, in the ordinary
        course of business and to the extent not  otherwise  prohibited  by this
        Agreement, to another Borrower or Subsidiary of a Borrower, and sales of
        (1) Mortgage  Loans,  (2)  Mortgage-backed  Securities  , (3)  Servicing



                                      -35-
<PAGE>



        Contracts and (4) other  dispositions of Serviced Loans in an amount not
        to exceed five percent (5%) of the Servicing Portfolio during any twelve
        (12) month period.

                7.18.4 The Borrowers  will not, and will not permit any of their
        Subsidiaries to issue any additional ownership  interests,  or rights or
        instruments  convertible into such ownership  interests,  except for (i)
        Permitted  Transfers,  (ii)  those  transactions  set forth on  Schedule
        6.7.2,  and (iii) the exchange by Charter Mac  Corporation of its common
        stock into Class A Common Stock..

                7.18.5 The Borrowers  will not, and will not permit any of their
        Subsidiaries to change their respective taxpayer  identification numbers
        and state organizational  numbers unless such Person shall have provided
        the Agent with not less than forty-five days prior written notice.

        7.19 Subsidiaries. The Borrowers other than PWF may not acquire, form or
otherwise invest in any Subsidiary. PWF may acquire, form or otherwise invest in
a Subsidiary which engages in the mortgage banking business primarily  involving
multi-family  mortgages,  including purchasing,  servicing and originating.  Any
Subsidiary  created by PWF shall  constitute a "Borrower" as referred to herein.
Each of the Borrowers  acknowledges  and covenants that upon the creation of any
new Subsidiary  permitted  hereby,  at the Agent's option such Subsidiary  shall
execute and deliver to the Agent an  agreement  reasonably  satisfactory  to the
Agent under which such Subsidiary joins this Agreement as a Borrower.

        7.20 Loans and Advances. Except as permitted in Section 7.14.1 and 7.16,
the Borrows will not and will not permit any of their  Subsidiaries to, make any
loans or advances to any Person other than  advances to the  Borrowers' or their
Subsidiaries'  employees  in the  ordinary  course of  business  for  reasonable
expenses to be incurred by such  employees  for the benefit of the  Borrowers or
such Subsidiaries. Notwithstanding the foregoing, the Borrowers may purchase and
originate Mortgage Loans in the ordinary course of business.

        7.21  Fiscal  Year.   The  fiscal  year  of  the   Borrowers  and  their
Subsidiaries presently ends on September 30 of each year. If the Borrowers shall
change their fiscal year end, such Person shall promptly  furnish the Agent with
written notice thereof.

        7.22 Charging Accounts. Agent is hereby authorized,  on or after the due
date,  to charge  the Cash  Collateral  Account  at Agent with the amount of all
principal and interest payments due under this Agreement, the Notes or the other
Loan Documents and upon the occurrence and during the  continuation  of an Event
of Default, the Agent or any of the Lenders is hereby authorized on or after the
due date, to charge such account at Agent,  or any other deposit  account of any
Borrower  at Agent or any of the  Lenders,  with the amount of all unpaid  fees,
costs and  expenses to which the Agent and the Lenders are  entitled  under this
Agreement.  The failure of Agent to so charge such  account  shall not affect or
limit Borrowers' obligation to make any required payment.

        7.23 Place for Records; Inspection.

                7.23.1 Each Borrower shall, and cause each of their Subsidiaries
        to, maintain all of their business records as follows: (x) as to PWF and
        Cambridge, 200 Old Country Road, Suite 580,



                                      -36-
<PAGE>



        Mineola,  New York 11501,  and (y) as to Larson,  200 Old Country  Road,
        Suite  580,   Mineola,   New  York  11501  and  150   Morristown   Road,
        Bernardsville,   New  Jersey  07924.   Upon  reasonable  notice  and  at
        reasonable  times  during  normal  business  hours Agent and each Lender
        shall have the right (through such agents or consultants as Agent or any
        Lender may  designate)  to examine the foregoing  Persons'  property and
        make  copies of and  abstracts  from  such  Persons'  books of  account,
        correspondence  and other records and to discuss its financial and other
        affairs with any of its senior officers and any accountants hired by any
        of the foregoing Persons, it being agreed that the Agent and each Lender
        shall not divulge  information  obtained from such examination to others
        except in connection  with Legal  Requirements  and in  connection  with
        administering  the Loan,  enforcing  their rights and remedies under the
        Loan  Documents  and in the conduct,  operation  and  regulation  of its
        banking and lending business (which may include, without limitation, the
        transfer  of  the  Loan  or of  participation  interests  therein).  Any
        transferee of the Loan or any holder of a participation  interest in the
        Loan shall be entitled to deal with such  information in the same manner
        and in connection  with any  subsequent  transfer of its interest in the
        Loan or of further participation interests therein.

                7.23.2 Without  limiting the rights of the Agent and the Lenders
        under Section  7.23.1,  above,  the Borrowers shall permit the Agent, at
        the  Borrowers'  expense,  to undertake  semi-annual  appraisals  of the
        Servicing Rights by any Approved  Servicing Rights Appraiser,  provided,
        however, that so long as no Default or Event of Default has occurred and
        is continuing,  there shall be not more than two such  appraisals in any
        twelve month period.

        7.24 Costs and Expenses.  Whether or not the  transactions  contemplated
hereby shall be consummated,  each Borrower agrees to pay promptly:  (a) all the
actual and  reasonable  out-of-pocket  costs and expenses of  preparation of the
Loan Documents and any consents,  amendments,  waivers,  or other  modifications
thereto; (b) the reasonable fees, expenses,  and disbursements of counsel to the
Agent  in  connection  with  the  negotiation,   preparation,   execution,   and
administration of the Loan Documents and any consents,  amendments,  waivers, or
other modifications  thereto and any other documents or matters requested by any
Borrower;  (c) all other actual and reasonable  out-of-pocket costs and expenses
incurred by the Agent in connection with the establishment of the Facility,  the
syndication of the Commitments and the negotiation,  preparation,  and execution
of  the  Loan  Documents  and  any  consents,  amendments,   waivers,  or  other
modifications  thereto and the transactions  contemplated  thereby;  and (d) all
reasonable  out-of-pocket  expenses  (including  reasonable  attorneys' fees and
costs,  which attorneys may be employees of the Agent or any Lender and the fees
and costs of appraisers,  brokers,  investment bankers or other experts retained
by the Agent or any Lender)  incurred  by the Agent or any Lender in  connection
with (i) the  enforcement  of or  preservation  of rights  under any of the Loan
Documents  against the  Borrowers,  the  Guarantors or any other Person,  or the
administration  thereof,  (ii) any  refinancing or  restructuring  of the credit
arrangements  provided  under this  Agreement in the nature of a  "work-out"  or
pursuant to any insolvency or bankruptcy proceedings,  and (iii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to the Agent's or any Lender's  relationship  with the Borrowers,  except to the
extent arising out of the Agent's or any Lender's bad faith,  gross  negligence,
willful  misconduct  or  material  breach of this  Agreement  or any other  Loan
Document,  as  finally  determined  by a court of  competent  jurisdiction.  The
covenants of this Section shall survive  payment or  satisfaction  of payment of
amounts owing with respect to the Notes.  The amount of all



                                      -37-
<PAGE>



such  expenses  shall,  until  paid,  bear  interest at the rate  applicable  to
principal hereunder (including the Default Rate) and be an Obligation secured by
any Collateral.

        7.25  Indemnification.  Each Borrower shall  indemnify and hold harmless
the Agent and the Lenders and all those  claiming by, through or under the Agent
and each of the  Lenders  ("Indemnified  Party")  from and  against  any and all
claims, actions and suits whether groundless or otherwise,  and from and against
any and all  liabilities,  losses,  damages  and  expenses  of every  nature and
character  arising out of this  Agreement or any of the other Loan  Documents or
the transactions  contemplated hereby ("Damages") including,  without limitation
(a) any actual or proposed use by the Borrowers or any of their  Subsidiaries of
the proceeds of any of the Loans, (b) the Borrowers or any of their Subsidiaries
entering into or performing  this Agreement or any of the other Loan  Documents,
or (c) with respect to the Borrowers and their Subsidiaries and their respective
properties  and assets,  the  violation of any Legal  Requirement,  in each case
including,  without limitation, the reasonable fees and disbursements of counsel
and allocated  costs of internal  counsel  incurred in connection  with any such
investigation,  litigation  or  other  proceeding;  provided,  however,  that no
Indemnified Party shall be entitled to  indemnification  if a court of competent
jurisdiction  finally  determines  (all appeals having been exhausted or waived)
that such Indemnified Party acted in bad faith, with willful  misconduct,  gross
negligence,  or material breach of this Agreement or any other Loan Document. No
Indemnified Party shall be entitled to settle or enter into any accommodation in
respect of any such claim,  action or suit without the prior written  consent of
the  Borrowers  (and that any  Indemnified  Party so settling  or  accommodating
without  such  Borrowers'  consent  shall  not be  entitled  to  indemnification
therefor),  and provided,  however, if the Borrowers shall refuse to provide its
written consent to a requested  settlement,  the Borrowers  shall, as collateral
for potential payment of the full amount of the claimed Damages,  provide either
a letter of credit in favor of the  Indemnified  Party,  on terms and conditions
satisfactory to the Agent, in its sole discretion, or, as cash collateral,  cash
or Cash  Equivalents,  any of which  shall be in the full  amount of the claimed
Damages,  together with all anticipated costs and expenses (including reasonable
attorneys' fees and expenses)  anticipated by the Agent, in its sole discretion,
to accrue in  connection  with the defense and  possible  payment of the claimed
Damages. If the Borrowers fail to provide such required collateral,  or fails to
respond to a request for a consent to a  settlement,  within  five (5)  Business
Days of when  first  requested  by the Agent,  the  Indemnified  Party  shall be
entitled to settle the claim as it proposed,  and the Borrowers  shall be liable
for the full amount thereof together with all related Damages. In litigation, or
the preparation therefor,  the Lenders and the Agent shall be entitled to select
their own counsel and, in addition to the  foregoing  indemnity,  the  Borrowers
agree to pay promptly the reasonable fees and expenses of such counsel.  If, and
to the extent that the  obligations of the Borrowers under this Section 7.25 are
unenforceable  for any reason,  the  Borrowers  hereby agree to make the maximum
contribution  to the  payment  in  satisfaction  of such  obligations  which  is
permissible  under  applicable  law. The  provisions  of this Section 7.25 shall
survive the repayment of the Loan and the  termination of the obligations of the
Lenders and the Agent hereunder.

        7.26 Financial Covenants.

                7.26.1   Tangible  Net  Worth.   The  Borrowers   shall,   on  a
        consolidated  basis (as among themselves only),  maintain a Tangible Net
        Worth of not less  than the  greater  of (x)  $13,000,000.00,  or (y) an
        amount  sufficient to satisfy the requirements from time to time of both



                                      -38-
<PAGE>



        Fannie Mae and Freddie  Mac, to be tested as of the Closing  Date and on
        the last day of each calendar quarter thereafter.

                7.26.2 Liquidity.  The Borrowers shall, on a consolidated basis,
        among  themselves,  at all  times  maintain  unrestricted  cash and Cash
        Equivalents  of no  less  than  $500,000  plus  0.15%  of the  aggregate
        outstanding  principal amount of aggregate of Serviced Loans serviced on
        behalf of Fannie  Mae,  or such  higher  level as Fannie Mae may require
        from time to time.

                7.26.3  Debt  Service  Coverage.   The  Borrowers  shall,  on  a
        consolidated  basis among  themselves,  maintain a minimum  Debt Service
        Coverage ratio of 1.25:1, which shall be tested quarterly on a rolling 4
        quarter basis commencing March 31, 2002.

                7.26.4 Minimum  Portfolio Amount. At no time shall the aggregate
        principal  balances of the Serviced  Loans  (exclusive of Serviced Loans
        which are sixty (60) or more days past due or are  otherwise in default)
        be less than $2,300,000,000.

                7.26.5 Maximum  Serviced Loans  Delinquencies.  At no time shall
        the aggregate principal amount of Serviced Loans which are sixty (60) or
        more days  past due or  otherwise  in  default  exceed  1% of  aggregate
        principal balances of all Serviced Loans.

        7.27  Replacement  Documentation.  Upon  receipt of an  affidavit  of an
officer of Agent as to the loss,  theft,  destruction or mutilation of any Note,
this Agreement,  any Loan Document,  or any other security document which is not
of public record, and customary (unsecured, unbonded) indemnification reasonably
satisfactory  to the  Borrowers,  each Borrower will issue,  in lieu thereof,  a
replacement  Note,  Agreement,  Loan Document or other security  document in the
same principal amount thereof and otherwise of like tenor.

        7.28  Additional  Facilities  Co-Terminous  and  Cross  Defaulted.  Each
Borrower  acknowledges  and agrees  that the  occurrence  of an event of default
under the Acquisition Facility shall constitute an Event of Default hereunder.

        7.29 Pledge of Servicing Contracts. None of the Borrowers will Pledge or
grant a security interest in any existing or future Servicing  Contracts of such
Borrower other than to Agent.

        7.30 Recourse Servicing Contracts. None of the Borrowers will acquire or
enter into  Servicing  Contracts  under which any Borrower  must  repurchase  or
indemnify  the  holder  of the  Mortgage  Loans as a result of  defaults  on the
Mortgage Loans at any time during the term of those Mortgage  Loans,  except for
loss sharing  under  Fannie Mae DUS Mortgage  Loans and as a result of customary
representations and warranties concerning the Mortgage Loans.

        7.31  Gestation  Agreements.  None of the  Borrowers  will  directly  or
indirectly sell or finance a Mortgage Loan under any Gestation  Agreement if the
Mortgage Loan is or was  previously  pledged to Lender as Collateral  under this
Agreement.



                                      -39-
<PAGE>



8. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL

        8.1 Special  Representations  and Warranties  Concerning  Eligibility as
Seller/Servicer of Mortgage Loans

        Each Borrower  represents  and warrants to Agent and the Lenders,  as of
the  date of this  Agreement  and as of the  date  of each  Warehousing  Advance
Request  and the  making of each  Warehousing  Advance,  that each  Borrower  is
approved and qualified and in good standing as a lender or  seller/servicer,  as
set forth below, and meets all requirements applicable to its status as:

                8.1.1 PWF,  Larson and  Cambridge  are FHA approved  mortgagees,
        eligible  to  originate,  purchase,  hold,  sell and  service  FHA fully
        insured Mortgage Loans.

                8.1.2  Cambridge  is a Ginnie Mae  approved  seller/servicer  of
        Mortgage Loans and issuer of  Mortgage-backed  Securities  guaranteed by
        Ginnie Mae.

                8.1.3 PWF and Larson are Fannie Mae approved seller/servicers of
        Mortgage Loans, eligible to originate,  purchase, hold, sell and service
        Mortgage Loans to be sold to Fannie Mae.

                8.1.4  PWF is a Fannie  Mae  approved  and  qualified  Delegated
        Underwriting  and  Servicing  Lender,  eligible to process,  underwrite,
        hold, sell to Fannie Mae and service Fannie Mae Mortgage Loans under the
        DUS Program.

                8.1.5 PWF is a Freddie Mac approved  seller/servicer of Mortgage
        Loans, eligible to originate,  purchase, hold, sell and service Mortgage
        Loans to be sold to Freddie Mac.

        8.2  Special   Representations  and  Warranties  Concerning  Warehousing
Collateral

        Each Borrower  represents  and warrants to Agent and the Lenders,  as of
the  date of this  Agreement  and as of the  date  of each  Warehousing  Advance
Request and the making of each Warehousing Advance, that:

                8.2.1 No Borrower has selected the  Collateral in a manner so as
        to affect adversely Lender's interests.

                8.2.2 Each Borrower is the legal and equitable owner and holder,
        free and  clear of all  Liens  (other  than  Liens  granted  under  this
        Agreement), of the Pledged Loans and the Pledged Securities. All Pledged
        Loans,  Pledged  Securities and related  Purchase  Commitments have been
        duly  authorized  and validly  issued to such  Borrower,  and all of the
        foregoing  items of Collateral  comply with all of the  requirements  of
        this Agreement, and have been and will continue to be validly pledged or
        assigned to Lender, subject to no other Liens.

                8.2.3 Each  Borrower  has, and will  continue to have,  the full
        right,  power and authority to pledge the  Collateral  pledged and to be
        pledged by it under this Agreement.



                                      -40-
<PAGE>



                8.2.4 Each Mortgage Loan and each related  document  included in
        the  Pledged  Loans  (1) has been duly  executed  and  delivered  by the
        parties to that  Mortgage Loan and that related  document,  (2) has been
        made in  compliance  with all  applicable  laws,  rules and  regulations
        (including all laws,  rules and regulations  relating to usury),  (3) is
        and  will  continue  to  be  a  legal,  valid  and  binding  obligation,
        enforceable in accordance with its terms,  without setoff,  counterclaim
        or  defense in favor of the  mortgagor  under the  Mortgage  Loan or any
        other  obligor  on the  Mortgage  Note  and (4) has not  been  modified,
        amended or any requirements of which waived, except in a writing that is
        part of the  Collateral  Documents.  No  party to any  Mortgage  Loan or
        related  document  is in  violation  of  any  applicable  law,  rule  or
        regulation  if the  violation  would  impair the  collectibility  of the
        Mortgage Loan or the  performance  by the mortgagor or any other obligor
        of its obligations under the Mortgage Note or any related document.

                8.2.5  Each  Pledged  Loan  is  secured  by a  Mortgage  on real
        property  located  in one of the  states  of the  United  States  or the
        District of Columbia.

                8.2.6 Unless Third Party  Originated  Loans are permitted,  each
        Pledged  Loan has been  closed or will be  closed  and  funded  with the
        Warehousing Advance made against it.

                8.2.7 Each Pledged Loan that is not an FHA Construction Mortgage
        Loan has been fully  advanced in the face amount of its  Mortgage  Note.
        The Agent acknowledges and agrees that in certain  instances,  a portion
        of the  proceeds of a Pledged  Loan,  although  advanced to the borrower
        thereunder,  will be held by Borrower in escrow to be disbursed upon the
        completion of repairs to the subject property.

                8.2.8  Each  First  Mortgage  is a first  Lien  on the  premises
        described  in that  Mortgage  and each Second  Mortgage  Loan or a third
        Mortgage  Loan is  secured  by a second  or third  Lien on the  premises
        described in that  Mortgage,  and with  respect to each Second  Mortgage
        Loan or third Mortgage Loan, PWF shall be the servicer, and the Purchase
        Commitment  shall be from the same Investor  which holds the senior Lien
        on the  Property  and third  Mortgage  Loans  shall  only be Fannie  Mae
        mortgage  loans.  Each Pledged  Loan has or will have a title  insurance
        policy,  in ALTA form or equivalent,  from a recognized  title insurance
        company,  insuring  the priority of the Lien of the Mortgage and meeting
        the usual requirements of Investors purchasing those Mortgage Loans.

                8.2.9  Each   Property  has  been   evaluated  or  appraised  in
        accordance with Title XI of FIRREA, to the extent required.

                8.2.10 The Mortgage Note for each Pledged Loan is (1) payable or
        endorsed  to the  order of  Borrower,  (2) an  "instrument'  within  the
        meaning  of  Section  9-102  of  the  Uniform  Commercial  Code  of  all
        applicable  jurisdictions  and (3) is denominated  and payable in United
        States dollars.

                8.2.11 No  default  has  existed  for 60 days or more  under any
        Mortgage Loan included in the Pledged Loans.



                                      -41-
<PAGE>



                8.2.12 Each  Borrower has  complied and will  continue to comply
        with all laws,  rules and regulations in respect of the FHA insurance of
        each Mortgage Loan included in the Pledged  Mortgages  designated by any
        Borrower  as an FHA insured or VA  guaranteed  Mortgage  Loan,  and such
        insurance  or  guarantee  is and will  continue  to be in full force and
        effect.

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

                8.2.14  Pledged Loans  secured by premises  located in a special
        flood  hazard  area  designated  as such by the  Director of the Federal
        Emergency  Management  Agency  are and will  continue  to be  covered by
        special flood insurance under the National Flood Insurance Program.

                8.2.15 Each Pledged Loan against which a Warehousing  Advance is
        made on the basis of a Purchase Commitment meets all of the requirements
        of that Purchase  Commitment,  and each Pledged Security against which a
        Warehousing  Advance is outstanding meets all of the requirements of the
        related Purchase Commitment.

                8.2.16  Pledged  Loans that are  intended  to be  exchanged  for
        Agency  Securities  comply  or,  prior  to the  issuance  of the  Agency
        Securities  will  comply,  with  the  requirements  of any  governmental
        instrumentality, department or agency issuing or guaranteeing the Agency
        Securities.

                8.2.17  Pledged  Loans  that  are  intended  to be  used  in the
        formation of  Mortgage-backed  Securities (other than Agency Securities)
        comply  with  the  requirements  of the  issuer  of the  Mortgage-backed
        Securities (or its sponsor) and of the Rating Agencies.

                8.2.18 None of the Pledged Loans is a graduated payment Mortgage
        Loan or has a shared  appreciation or other contingent interest feature,
        and each  Pledged Loan  provides  for  periodic  payments of all accrued
        interest on the Mortgage Loan on at least a monthly basis.

                8.2.19 No Borrower has any ownership interest,  right to acquire
        any ownership  interest or equivalent  economic interest in any property
        securing a Mortgage Loan or the mortgagor under the Mortgage Loan or any
        other obligor on the Mortgage Note.

                8.2.20 The original assignments of Mortgage and of UCC financing
        statements  delivered to Lender for each Pledged Loan are in  recordable
        form and comply with all applicable laws and  regulations  governing the
        filing and recording of such documents.

                8.2.21 Each  Pledged  Loan  secured by real  property to which a
        manufactured   home  is  affixed  will  create  a  valid  Lien  on  that
        manufactured  home that will have  priority  over any other



                                      -42-
<PAGE>



        Lien on the manufactured  home,  whether or not arising under applicable
        real property law or the UCC or other applicable law.

        8.3 Special Affirmative Covenants Concerning Warehousing Collateral

        As long as the Warehousing Commitment is outstanding or there remain any
        Obligations  to be paid or performed  under this  Agreement or under any
        other Loan Document, each Borrower must:

                8.3.1  Warrant and defend the right,  title and  interest of the
        Agent and the  Lenders in and to the  Collateral  against the claims and
        demands of all Persons.

                8.3.2  Service  or cause to be  serviced  all  Pledged  Loans in
        accordance  with the  standard  requirements  of the issuers of Purchase
        Commitments covering them and all applicable HUD, Fannie Mae and Freddie
        Mac requirements,  including taking all actions necessary to enforce the
        obligations of the obligors under such Mortgage Loans.  Service or cause
        to  be  serviced  all  Mortgage  Loans  backing  Pledged  Securities  in
        accordance with applicable governmental requirements and requirements of
        issuers of Purchase Commitments covering them.

                8.3.3  Execute  and  deliver to Agent  and/or the  Lenders  such
        further instruments of sale, pledge,  assignment or transfer,  and those
        powers of attorney, as required by Agent, and do and perform all matters
        and  things  necessary  or  desirable  to be done or  observed,  for the
        purpose of effectively creating, maintaining and preserving the security
        and benefits  intended to be afforded Agent (for the ratable  benefit of
        the Lenders) under this Agreement.

                8.3.4 Notify Agent within 2 Business Days of any default  under,
        or of the  termination  of,  any  Purchase  Commitment  relating  to any
        Pledged Loan, Eligible Mortgage Pool, or Pledged Security.

                8.3.5  Promptly  comply  in all  respects  with  the  terms  and
        conditions of all Purchase Commitments, and all extensions, renewals and
        modifications  or  substitutions  of or  to  all  Purchase  Commitments.
        Deliver or cause to be delivered  to the Investor the Pledged  Loans and
        Pledged  Securities to be sold under each Purchase  Commitment not later
        than  the  mandatory  delivery  date of the  Pledged  Loans  or  Pledged
        Securities under the Purchase Commitment.

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



                                      -43-
<PAGE>

                8.3.7 Be in good  standing with Fannie Mae,  Freddie Mae,  GNMA,
        and FHA with  respect to all programs and products in which any Borrower
        from time to time participating.

        8.4 Special Negative Covenants Concerning Warehousing Collateral

        As long as the Warehousing Commitment is outstanding or there remain any
        Obligations to be paid or performed, Borrowers must not, either directly
        or  indirectly,  without the prior written  consent of the Agent and the
        Requisite Lenders:

                8.4.1 Amend or modify,  or waive any of the terms and conditions
        of, or settle or  compromise  any claim in respect of, any Pledged Loans
        or Pledged Securities.

                8.4.2 Sell, transfer or assign, or grant any option with respect
        to, or pledge (except under this Agreement) any of the Collateral or any
        interest in any of the Collateral.

                8.4.3 Make any  compromise,  adjustment or settlement in respect
        of any of the  Collateral  or  accept  other  than  cash in  payment  or
        liquidation of the Collateral.

        8.5  Special  Representation  and  Warranty  Concerning  Fannie  Mae DUS
Program Reserve Requirements

        PWF represents and warrants to Agent and the Lenders,  as of the date of
this Agreement and as of the date of each  Warehousing  Advance  Request and the
making of each Warehousing Advance,  that PWF has met the Fannie Mae DUS Program
requirements  for lender  reserves for each Fannie Mae DUS  Mortgage  Loan to be
funded by such Warehousing Advance.

        8.6  Special  Representations  and  Warranties  Concerning  FHA  Project
Mortgage Loans

        Each Borrower  represents  and warrants to Agent and the Lenders,  as of
the  date of this  Agreement  and as of the  date  of each  Warehousing  Advance
Request and the making of each Warehousing Advance, that:

                8.6.1 Each  FHA-insured  Mortgage  Loan  included in the Pledged
        Loans meets all applicable governmental requirements for such insurance.
        Each  Borrower has  complied and will  continue to comply with all laws,
        rules and regulations  with respect to the FHA insurance of each Pledged
        Loan  designated by such Borrower as an  FHA-insured  Mortgage Loan, and
        such insurance is and will continue to be in full force and effect.

                8.6.2 For  FHA-insured  Pledged  Loans that will be used to back
        Ginnie Mae  Mortgage-backed  Securities,  Cambridge received from Ginnie
        Mae Confirmation Notices for Request Additional Commitment Authority and
        for  Request  Pool  Numbers,  and there  remains  available  under those
        agreements a commitment  on the part of Ginnie Mae  sufficient to permit
        the issuance of Ginnie Mae  Mortgage-backed  Securities  in an amount at
        least equal to the amount of the Pledged  Loans  designated by Cambridge
        as  the   Mortgage   Loans  to  be  used  to  back   those   Ginnie  Mae
        Mortgage-backed  Securities;  each of those  Confirmation  Notices is in



                                      -44-
<PAGE>



        full force and effect;  each of those Pledged Loans has been assigned by
        Cambridge  to one of those Pool  Numbers and a portion of the  available
        Ginnie Mae Commitment has been allocated to this Agreement by Cambridge,
        in an amount at least equal to those  Pledged  Loans;  and each of those
        assignments  and allocations has been reflected in the books and records
        of Cambridge.

        8.7  Special   Representations  and  Warranties   Concerning  Commercial
Mortgage Loans

        Each Borrower  represents  and warrants to Agent and the Lenders,  as of
the  date of this  Agreement  and as of the  date  of each  Warehousing  Advance
Request and the making of each Warehousing Advance, that:

                8.7.1 The principal amount of each Commercial Mortgage Loan does
        not exceed $30,000,000.

                8.7.2 The Loan-to-Value  Ratio of each Commercial  Mortgage Loan
        does not exceed 80%.

                8.7.3  Each  Commercial  Mortgage  Loan  is  a  permanent  First
        Mortgage Loan.

                8.7.4 The projected Property Debt Service Coverage Ratio for the
        related  Commercial  Property for the 12-month  period  beginning on the
        anticipated  closing  date of each  Commercial  Mortgage  Loan equals or
        exceeds 1.30 to 1.00.

                8.7.5 Each Commercial  Mortgage Loan has a final maturity of not
        more than 20 years (from its  original  date) and  provides  for monthly
        payments of  principal  and  interest  sufficient  to repay the original
        principal  amount of each Commercial  Mortgage Loan over a period of not
        more than 30 years  (subject to adjustment  in accordance  with industry
        standards in the case of an adjustable-rate Mortgage Loan).

                8.7.6 None of the  Commercial  Properties  securing a Commercial
        Mortgage Loan is a marina, golf course,  automobile dealership,  funeral
        home,  hotel or motel,  self-storage  facility or other type of property
        developed specifically for the operations of a particular business.

                8.7.7 The  mortgagor  under each  Commercial  Mortgage Loan is a
        Single  Purpose  Entity,  if  either:  (i) the  principal  amount of the
        Commercial  Mortgage  Loan  exceeds  $25,000,000;  or (ii) the owners or
        sponsors of the  mortgagor  under the  Commercial  Mortgage  Loan or any
        other obligor on the Mortgage Note, or any Person owned or controlled by
        any of them, have previously defaulted on Debt or been debtors under the
        United States Bankruptcy Code

        8.8  Special   Representations  and  Warranties   Concerning   Servicing
Collateral

        Schedule 6.21 is a true and complete list of each  Borrower's  Servicing
        Portfolio  as of the  date  set  forth  therein.  Each  Borrower  hereby
        represents and warrants to Agent and the Lenders, as of the date of this
        Agreement and as of the date of each Warehousing Advance Request and the
        making of each Warehousing Advance, that:



                                      -45-
<PAGE>



                8.8.1  Each  Borrower  is the legal  and  equitable  owners  and
        holders, free and clear of all Liens of the Servicing Contracts.

                8.8.2  Except as  otherwise  disclosed  to  Lenders,  all of the
        servicing  rights  under  the  Servicing  Contracts  constitute  primary
        servicing rights.

                8.8.3 Each Servicing Contract is in full force and effect and is
        legal,  valid and  enforceable  in  accordance  with its  terms,  and no
        default  or event  that,  with  notice  or lapse of time or both,  would
        become a default, exists under any Servicing Contract,  except where the
        failure  of the  foregoing  would  not  materially  adversely  affect  a
        Borrower's business or assets.

                8.8.4 Each right to the  payment  of money  under the  Servicing
        Contracts  is  genuine  and  enforceable  in  accordance  with its terms
        against the parties obligated to pay the same, which terms have not been
        modified  or waived in any respect or to any  extent,  except  where the
        failure of the foregoing would materially  adversely affect a Borrower's
        business or assets.

                8.8.5 To the best of each Borrower's  knowledge,  no obligor has
        any defense,  set off, claim or counterclaim  against such Borrower that
        can be asserted  against Agent or any Lender,  whether in any proceeding
        to enforce  Agent's  rights in the related  Mortgage  Loan or otherwise,
        except where the failure of the foregoing would not materially adversely
        affect a Borrower's business or assets.

9.      EVENTS OF DEFAULT. The following provisions deal with Default, Events of
Default,  notice,  grace and cure periods,  and certain  rights of Agent and the
Lenders following an Event of Default.

        9.1 Default and Events of Default.  The term "Default" as used herein or
in any of the other Loan Documents  shall mean an Event of Default,  or any fact
or  circumstance  which  constitutes,  or upon the  lapse of time,  or giving of
notice,  or both, would constitute,  an Event of Default.  Each of the following
events, unless cured within any applicable grace period set forth or referred to
below in this Section 9.1, shall constitute an "Event of Default".

                9.1.1  Failure  to  Pay.  Any  Borrower  shall  fail  to pay any
        principal and interest of the Loan or any other Obligation when the same
        shall become due and payable,  whether at the stated date of maturity or
        any accelerated date of maturity or at any other date fixed for payment;

                9.1.2 Failure to Perform (Grace).The Borrower shall fail

                        (i) to comply with the  covenants  set forth in Sections
                7.11,  7.24 and 7.25  within  ten (10) days from the date of the
                Agent's written notice to the Borrower informing Borrower of the
                Borrower's failure to have so complied with said covenants; and

                        (ii) to comply with the  covenants set forth in Sections
                7.3,  7.6.1(b),  7.7, 7.8, 7.9, 7.13(a),  7.23.1 and 7.23.2, and
                7.27  within  fifteen  (15)  days  from the date of the



                                      -46-
<PAGE>



                Agent's written notice to the Borrower informing Borrower of the
                Borrower's failure to have so complied with said covenants; and

                        (iii) to  comply  with the  provisions  of  clauses  (a)
                through (f) inclusive of Section 7.14.2 with respect to any lien
                not  resulting  from a voluntary  action by any Borrower  within
                five (5) days from the date of the Agent's written notice to the
                Borrower informing Borrower of the Borrower's failure to have so
                complied with said covenant;

                provided,  however,  that the foregoing grace periods shall only
                apply in respect of the first  instance of  non-compliance  with
                each respective covenant in any twelve-month period.

                9.1.3 Failure to Perform. Any Borrower shall fail to comply with
        any of its covenants  contained herein or any of the covenants contained
        in any other  Loan  Documents  and which are not  referenced  in Section
        9.1.2 above;

                9.1.4 Breach of Representation or Warranty.  Any  representation
        or  warranty  of any  Borrower  or any of  their  Subsidiaries  in  this
        Agreement  or any of the other Loan  Documents  shall have been false in
        any material respect upon the date when made or deemed to have been made
        or repeated;

                9.1.5 Failure to Pay other Indebtedness.  Any Borrower or any of
        their  Subsidiaries  shall  fail  to  pay at  maturity,  or  within  any
        applicable  period of grace,  any  obligation  in excess of $50,000  for
        borrowed  money or credit  received  or in  respect  of any  capitalized
        leases,  or fail to observe or perform any term,  covenant or  agreement
        contained in any agreement by which it is bound,  evidencing or securing
        borrowed  money or credit  received  or in  respect  of any  capitalized
        leases in excess of $50,000  provided that the holder or holders thereof
        or of any  obligations  issued  thereunder  to  accelerate  the maturity
        thereof;

                9.1.6  Insolvency.  Any  Borrower  or any of their  Subsidiaries
        shall  make an  assignment  for the  benefit of  creditors,  or admit in
        writing its inability to pay or generally  fail to pay its debts as they
        mature or become due, or shall petition or apply for the  appointment of
        a trustee or other custodian,  liquidator or receiver of any Borrower or
        any of their  Subsidiaries or of any  substantial  part of the assets of
        any Borrower or any of their  Subsidiaries or shall commence any case or
        other proceeding  relating to any Borrower or any of their  Subsidiaries
        under   any   bankruptcy,   reorganization,   arrangement,   insolvency,
        readjustment  of debt,  dissolution or liquidation or similar law of any
        jurisdiction,  now or hereafter  in effect,  or shall take any action to
        authorize  or in  furtherance  of any of the  foregoing,  or if any such
        petition  or  application  shall  be  filed  or any  such  case or other
        proceeding  shall be  commenced  against  any  Borrower  or any of their
        Subsidiaries  and  any  Borrower  or any  of  their  Subsidiaries  shall
        indicate its approval thereof, consent thereto or acquiescence therein;

                9.1.7 Involuntary  Proceedings.  The filing of any case or other
        proceeding  against any  Borrower or any of the  Subsidiaries  under any
        bankruptcy,  reorganization,  arrangement,  insolvency,  readjustment of
        debt, dissolution or liquidation or similar law of any jurisdiction, now
        or hereafter in effect and such case or proceeding is not  discharged or
        dismissed within



                                      -47-
<PAGE>



        forty-five (45) days of its  commencement;  a decree or order is entered
        appointing  any such  trustee,  custodian,  liquidator  or  receiver  or
        adjudicating  any  Borrower  or any of their  Subsidiaries  bankrupt  or
        insolvent, or approving a petition in any such case or other proceeding,
        or a decree or order for relief is entered in respect of any Borrower or
        any  Subsidiary of any Borrower,  in an  involuntary  case under federal
        bankruptcy laws as now or hereafter constituted;

                9.1.8  Judgments.  There  shall  remain in force,  undischarged,
        unsatisfied and unstayed, for more than forty-five (45) days, whether or
        not  consecutive,  any uninsured final judgment  against any Borrower or
        any of their Subsidiaries  that, with other outstanding  uninsured final
        judgments,   undischarged,   against  any   Borrower  or  any  of  their
        Subsidiaries exceeds in the aggregate $100,000;

                9.1.9  Cancellation  of  Loan  Documents.  If any  of  the  Loan
        Documents  shall be  canceled,  terminated,  revoked or rescinded or any
        action at law,  suit or in equity or other legal  proceeding  to cancel,
        revoke or rescind any of the Loan Documents  shall be commenced by or on
        behalf of any Borrower or any of their Subsidiaries, or any court or any
        other  governmental  or  regulatory  authority  or agency  of  competent
        jurisdiction  shall  make a  determination  that,  or issue a  judgment,
        order,  decree or ruling to the effect that, any one or more of the Loan
        Documents is illegal,  invalid or  unenforceable  in accordance with the
        terms thereof;

                9.1.10  ERISA.   With  respect  to  any  ERISA  Plan,  an  ERISA
        Reportable  Event shall have  occurred and (i) a trustee shall have been
        appointed by the United States  District Court to administer  such Plan;
        or (ii) the PBGC shall have  instituted  proceedings  to terminate  such
        Guaranteed Pension Plan (which  termination  proceedings could result in
        liability  of any Borrower or any of their  Subsidiaries  to the PBGC in
        excess of $250,000;

                9.1.11  Indictment.  Any  Borrower or any of their  Subsidiaries
        shall be indicted  for a federal  crime,  a  punishment  for which could
        include  the   forfeiture   of  any  assets  of  any  Borrower  or  such
        Subsidiaries;

                9.1.12 Material  Adverse  Change.  There shall have occurred any
        change in or to the assets, liabilities,  financial condition,  business
        operations,  or prospects of any Borrower and their Subsidiaries,  taken
        as a whole,  which change  materially  adversely  affects the Borrower's
        ability to perform its  obligations  under this  Agreement  or the other
        Loan Documents;

                9.1.13 Regarding Guarantor, et. al. The occurrence of any of the
        foregoing  Events  of  Default  with  respect  to any  Guarantor  of the
        Obligations, or the occurrence of any of the foregoing Events of Default
        with respect to the parent of any Borrower, Subsidiary, or Affiliate, as
        if such Guarantor,  parent,  or Affiliate were the "Borrower"  described
        therein;

        Change in Control.  Any change of the  ownership of the capital stock of
any Borrower from that existing on the date hereof, except as permitted pursuant
to Section 7.18.4; or

                9.1.14  Acquisition  Facility.  The  occurrence  of an  event of
        default under the Acquisition Facility.



                                      -48-
<PAGE>



                9.1.15 RFC Line;  Commerce  Line.  The occurrence of an event of
        default  under any of the RFC Line or Commerce Line which results in the
        acceleration of the Indebtedness thereunder..

        9.2  Written  Waivers.  If a Default or an Event of Default is waived by
the Requisite Lenders, in their sole discretion,  pursuant to a specific written
instrument  executed by an authorized  officer of Agent, the Default or Event of
Default so waived shall be deemed to have never occurred.

        9.3 Remedies.

                9.3.1 If an Event of  Default  described  in  Section  9.1.6 and
        9.1.7 occurs with respect to any Borrower,  the  Warehousing  Commitment
        will  automatically  terminate  and the unpaid  principal  amount of and
        accrued   interest   on  the  Loan  and  all  other   Obligations   will
        automatically  become due and payable,  without  presentment,  demand or
        other  requirements  of any kind,  all of which each Borrower  expressly
        waives.

                9.3.2 If any other  Event of Default  occurs and is  continuing,
        Agent may, and with the direction of the  Requisite  Lenders  shall,  by
        Notice to Borrowers,  terminate the  Warehousing  Commitment and declare
        the Obligations to be immediately due and payable.

                9.3.3 If any Event of Default  occurs and is  continuing,  Agent
        may also take any of the following actions:

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

                        (ii)  Notify all  obligors  under any of the  Collateral
                that the  Collateral  has been  assigned to Agent (or to another
                Person  designated  by  Agent)  and  that all  payments  on that
                Collateral  are to be made  directly  to Agent  (or  such  other
                Person); settle, compromise or release, in whole or in part, any
                amounts any obligor or Investor owes on any of the Collateral on
                terms  acceptable  to Agent;  enforce  payment and prosecute any
                action or proceeding involving any of the Collateral;  and where
                any Collateral is in default, foreclose on and enforce any Liens
                securing that Collateral in any manner permitted by law and sell
                any property acquired as a result of those enforcement actions.

                        (iii)  Act,  or  contract  with a third  party to act at
                Borrowers'  expense,  as servicer or  subservicer  of Collateral
                requiring  servicing and perform all obligations  required under
                any Servicing Contracts and Purchase Commitments.

                        (iv) Require Borrowers to assemble and make available to
                Agent the  Collateral  and all  related  books and  records at a
                place designated by Agent.



                                      -49-
<PAGE>



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

                        (vi) Before the disposition of the  Collateral,  prepare
                it for  disposition  in any manner and to the extent Agent deems
                appropriate.

                        (vii)  Exercise  all  rights and  remedies  of a secured
                creditor  under  the  UCC or  other  applicable  law,  including
                selling  or  otherwise  disposing  of all or any  portion of the
                Collateral  at one or more public or private  sales,  whether or
                not the  Collateral is present at the place of sale, for cash or
                credit or  future  delivery,  on the terms and in the  manner as
                Agent  may  determine,   including  sale  under  any  applicable
                Purchase  Commitment.   Each  Borrower  waives  any  right  such
                Borrower  may  have to  prior  notice  of the sale of all or any
                portion of the  Collateral  to the extent  allowed by applicable
                law. If notice is required under applicable law, Agent will give
                Borrowers not less than 10 days' notice of any public sale or of
                the date after which any private sale may be held. Each Borrower
                agrees that 10 days'  notice is  reasonable  notice.  Agent may,
                without  notice or  publication,  adjourn  any public or private
                sale one or more  times by  announcement  at the time and  place
                fixed  for the  sale,  and the  sale  may be held at any time or
                place announced at the adjournment. In the case of a sale of all
                or any  portion  of  the  Collateral  on  credit  or for  future
                delivery,  the  Collateral  sold on  those  terms  may be may be
                retained by Agent until the purchaser  pays the selling price or
                takes  possession of the  Collateral.  Agent has no liability to
                Borrowers if a purchaser  fails to pay for or take possession of
                the Collateral sold on those terms,  and in the case of any such
                failure,  Agent  may  sell  the  Collateral  again  upon  notice
                complying with this Section.

                        (viii) Instead of or in conjunction  with exercising the
                power  of sale  authorized  by  Section  9.5.3(vii),  Agent  may
                proceed by suit at law or in equity to collect  all  amounts due
                upon the  Collateral,  or to foreclose  Agent's Lien on and sell
                all or any portion of the  Collateral  pursuant to a judgment or
                decree of a court of competent jurisdiction.

                        (ix) Proceed against any Borrower on the Notes.

                        (x) Retain all  excess  proceeds  from the sale or other
                disposition of the Collateral,  and apply them to the payment of
                the Obligations under Section 11.2.4.

                9.3.4 Agent and Lenders  will incur no  liability as a result of
        the  commercially  reasonable  sale or other  disposition  of all or any
        portion  of the  Collateral  at any  public  or  private  sale or  other
        disposition.  Each Borrower waives (to the extent  permitted by law) any
        claims they may have  against  Agent  arising by reason of the fact that
        the price at which the  Collateral  may have been sold at a private sale
        was less than the price that Agent might have obtained at a public sale,
        or was less than the  aggregate  amount of the  outstanding  Warehousing
        Advances,  plus



                                      -50-
<PAGE>



        accrued and unpaid  interest on the Advances,  and unpaid fees,  even if
        Agent accepts the first offer received and does not offer the Collateral
        to more  than  one  offeree.  Each  Borrower  agrees  that  any  sale of
        Collateral  under  the  terms of a  Purchase  Commitment,  or any  other
        disposition of Collateral  arranged by such Borrower,  whether before or
        after the occurrence of an Event of Default, will be deemed to have been
        made in a commercially reasonable manner.

                9.3.5  Each  Borrower   acknowledges  that  Mortgage  Loans  are
        collateral of a type that is the subject of widely distributed  standard
        price quotations and that Mortgage-backed Securities are collateral of a
        type that is  customarily  sold on a recognized  market.  Each  Borrower
        waives  any right  they may have to prior  notice of the sale of Pledged
        Securities, and agrees that Agent may purchase Pledged Loans and Pledged
        Securities at a private sale of such Collateral.

                9.3.6 Each  Borrower  specifically  waives and  releases (to the
        extent  permitted  by law) any  equity or right of  redemption,  stay or
        appraisal  that such  Borrower  has or may have under any rule of law or
        statute now existing or adopted  after the date of this  Agreement,  and
        any right to  require  Agent to (1)  proceed  against  any  Person,  (2)
        proceed  against or exhaust any of the  Collateral  or pursue its rights
        and remedies  against the  Collateral in any  particular  order,  or (3)
        pursue any other remedy within its power.  Agent is not required to take
        any  action to  preserve  any  rights of  Borrowers  against  holders of
        mortgages  having  priority to the Lien of any Mortgage  included in the
        Collateral or to preserve Borrowers' rights against other prior parties.

                9.3.7 Lenders may, but is not obligated to,  advance any sums or
        do any act or thing necessary to uphold or enforce the Lien and priority
        of, or the security intended to be afforded by, any Mortgage included in
        the Collateral, including payment of delinquent taxes or assessments and
        insurance premiums. All advances, charges, costs and expenses, including
        reasonable attorneys' fees and disbursements,  incurred or paid by Agent
        or Lenders in exercising  any right,  power or remedy  conferred by this
        Agreement,  or in the  enforcement  of  this  Agreement,  together  with
        interest  on those  amounts at the Default  Rate,  from the time paid by
        Agent or Lenders until repaid by  Borrowers,  are deemed to be principal
        outstanding under this Agreement and the Notes.

                9.3.8 No failure or delay on the part of Agent to  exercise  any
        right,  power or remedy  provided in this  Agreement  or under any other
        Loan  Document,  at law or in equity,  will  operate as a waiver of that
        right,  power or remedy.  No single or partial  exercise by Agent of any
        right,  power or remedy  provided under this Agreement or any other Loan
        Document,  at law or in equity,  precludes any other or further exercise
        of that right,  power,  or remedy by Agent,  or Agent's  exercise of any
        other  right,  power or remedy.  Without  limiting the  foregoing,  each
        Borrower  waives all defenses based on the statute of limitations to the
        extent permitted by law. The remedies provided in this Agreement and the
        other  Loan  Documents  are  cumulative  and  are not  exclusive  of any
        remedies provided at law or in equity.

                9.3.9 For the purpose of exercising  the rights  granted by this
        Section 9, as well as any and all other  rights and  remedies  of Agent,
        each Borrower hereby irrevocably  constitutes and appoints Agent (or any
        agent  designated  by any Lender) its true and lawful  attorney-in-fact,
        with full power of  substitution,  exercisable  upon and  following  any
        Event of Default,  to execute,



                                      -51-
<PAGE>



        acknowledge  and deliver any  instruments and to do and perform any acts
        in the name and on behalf of Borrowers,  including,  without limitation,
        Agent has been granted a license or other right to use,  without charge,
        each Borrower's  computer  programs,  other programs,  labels,  patents,
        copyrights,  rights  of use of any name,  trade  secrets,  trade  names,
        trademarks,  service marks and advertising  matter, or any property of a
        similar  nature,  as it pertains to the  Collateral,  in advertising for
        sale and selling any  Collateral  and each  Borrower's  rights under all
        licenses  and all other  agreements  related to the  foregoing  inure to
        Agent's benefit until the Obligations are paid in full.

10. SECURITY INTEREST AND SET-OFF.

        10.1 Security  Interest.  Each  Borrower  hereby grants to the Agent and
each of the Lenders,  a lien,  security interest and right of setoff as security
for all liabilities  and  obligations to Agent and each of the Lenders,  whether
now  existing or  hereafter  arising,  upon and against all  deposits,  credits,
collateral  and property of the  Borrower,  now or hereafter in the  possession,
custody,  safekeeping  or control  of Agent or any of the  Lenders or any entity
under the control of FleetBoston  Financial  Corporation  and its successors and
assigns or in transit to any of them.

        10.2 Set-Off. If an Event of Default occurs and is continuing,  any such
deposits,  balances  or other sums  credited  by or due from Agent or any of the
Lenders,  or from any such Affiliate of Agent or any of the Lenders, to Borrower
may to the fullest  extent not  prohibited by applicable law at any time or from
time to time,  without regard to the  existence,  sufficiency or adequacy of any
other  collateral,  and without  notice or compliance  with any other  condition
precedent now or hereafter imposed by statute, rule of law or otherwise,  all of
which are hereby waived,  be set off,  appropriated and applied by Agent or such
Lender of Affiliate against any or all of Borrowers' Obligations irrespective of
whether  demand  shall  have  been made and  although  such  obligations  may be
unmatured,  in such manner as Agent or such Lender or  Affiliate in its sole and
absolute  discretion may determine.  Within five (5) Business Days of making any
such set off,  appropriation  or application,  Agent agrees to notify  Borrowers
thereof,  provided the failure to give such notice shall not affect the validity
of such set off or appropriation  or application.  ANY AND ALL RIGHTS TO REQUIRE
AGENT TO EXERCISE ITS RIGHTS OR REMEDIES  WITH  RESPECT TO ANY OTHER  COLLATERAL
WHICH SECURES THE LOAN,  PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWERS, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY  WAIVED.  Each of the Lenders agrees with each other
Lender that (a) if an amount to be set off is to be applied to  indebtedness  of
the Borrowers to such Lender,  other than the Obligations  evidenced by the Note
held by such  Lender,  such  amount  shall  be  applied  ratably  to such  other
indebtedness  and to the  Obligations  evidenced  by all the  Note  held by such
Lender,  and (b) if such Lender  shall  receive  from the  Borrower,  whether by
voluntary payment, exercise of the right of setoff, counterclaim,  cross action,
enforcement  of  the  claim  evidenced  by the  Note  held  by  such  Lender  by
proceedings  against the  Borrowers  at law or in equity or by proof  thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise,  and shall  retain and apply to the  payment of the Note held by such
Lender any amount in excess of its ratable  portion of the payments  received by
all of the Lenders  with  respect to the Note held by all of the  Lenders,  such
Lender will make such disposition and  arrangements  with the other Lenders with
respect to such excess, either by way of distribution,  participation, pro tanto
assignment  of claims,  subrogation  or otherwise as shall



                                      -52-
<PAGE>



result  in  each  Lender  receiving  in  respect  of  the  Note  held  by it its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter  recovered from such Lender,  such
disposition and  arrangements  shall be rescinded and the amount restored to the
extent of such recovery, but without interest.

        10.3 Right to Freeze.  The Agent and each of the Lenders shall also have
the right,  at its option,  upon the occurrence of any event which would entitle
the Agent and each of the  Lenders  to set off or debit as set forth in  Section
10.2, to freeze,  block or segregate any such deposits,  balances and other sums
so that Borrower may not access, control or draw upon the same.

        10.4  Additional  Rights.  The rights of Agent,  the  Lenders,  and each
affiliate of the Agent and the Lenders under this Section 10 are in addition to,
and not in limitation of, other rights and remedies,  including  other rights of
set off, which Agent or any of the Lenders may have.

11. THE AGENT AND THE LENDERS

        11.1 Rights, Duties and Immunities of the Agent.

                11.1.1  Appointment  of Agent.  Each Lender  hereby  irrevocably
        designates  and appoints  Fleet National Bank as Agent of such Lender to
        act as specified  herein and in the other Loan Documents,  and each such
        Lender  hereby  irrevocably  authorizes  the Agent to take such actions,
        exercise such powers and perform such duties as are expressly  delegated
        to or conferred  upon the Agent by the terms of this Loan  Agreement and
        the  other  Loan  Documents,  together  with  such  other  powers as are
        reasonably  incidental thereto. The Agent agrees to act as such upon the
        express  conditions  contained  in this  Section 11. The Agent shall not
        have any duties or  responsibilities  except those  expressly  set forth
        herein or in the other Loan  Documents,  nor shall it have any fiduciary
        relationship    with   any   Lender,    and   no   implied    covenants,
        responsibilities,  duties, obligations or liabilities shall be read into
        this Loan Agreement or otherwise exist against the Agent. The provisions
        of this  Section  11 are  solely  for the  benefit  of the Agent and the
        Lenders,  and the  Borrowers  shall not have any rights as a third party
        beneficiary of any of the provisions hereof.

                11.1.2  Administration  of Loan by  Agent.  The  Agent  shall be
        responsible  for  administering  the Loan on a day-to-day  basis. In the
        exercise  of such  administrative  duties,  the Agent shall use the same
        diligence  and  standard of care that is  customarily  used by the Agent
        with  respect  to  similar  loans  held by the Agent  solely for its own
        account.

        Each Lender  delegates to the Agent the full right and  authority on its
behalf  to  take  the  following   specific   actions  in  connection  with  its
administration of the Loan:

                        (i) to fund each Warehousing  Advance in accordance with
                the provisions of the Loan Documents,  but only to the extent of
                immediately  available  funds  provided  to  the  Agent  by  the
                respective Lenders for such purpose;

                        (ii) to receive  all  payments of  principal,  interest,
                fees and other  charges paid by, or on behalf of, the  Borrowers
                and, except for fees to which the Agent is entitled  pursuant to
                the Loan



                                      -53-
<PAGE>



                Documents  or  otherwise,  to  distribute  all such funds to the
                respective Lenders as provided for hereunder;

                        (iii) to keep and maintain  complete and accurate  files
                and records of all material matters  pertaining to the Loan, and
                make such files and records available for inspection and copying
                by each Lender and its  respective  employees  and agents during
                normal business hours upon reasonable prior notice to the Agent;
                and

                        (iv) to do or omit doing all such  other  actions as may
                be  reasonably  necessary  or  incident  to the  implementation,
                administration  and  servicing  of the Loan and the  rights  and
                duties delegated hereinabove.

                11.1.3  Delegation  of Duties.  The Agent may execute any of its
        duties  under  this Loan  Agreement  or any other  Loan  Document  by or
        through  its agents or  attorneys-in-fact,  and shall be entitled to the
        advice of counsel  concerning  all matters  pertaining to its rights and
        duties  hereunder  or under the Loan  Documents.  The Agent shall not be
        responsible   for  the   negligence  or  misconduct  of  any  agents  or
        attorneys-in-fact selected by it with reasonable care.

                11.1.4 Exculpatory Provisions.  Neither the Agent nor any of its
        officers, directors, employees, agents,  attorneys-in-fact or affiliates
        shall be liable for any action  lawfully taken or omitted to be taken by
        it or them under or in connection  with this Loan Agreement or the other
        Loan  Documents,  except for its or their  gross  negligence  or willful
        misconduct.  Neither  the  Agent  nor  any of its  officers,  directors,
        employees, agents,  attorneys-in-fact or affiliates shall be responsible
        for or have any duty to  ascertain,  inquire  into,  or  verify  (i) any
        recital, statement,  representation or warranty made by the Borrowers or
        any of their officers or agents  contained in this Loan Agreement or the
        other Loan Documents or in any  certificate or other document  delivered
        in connection  therewith;  (ii) the  performance or observance of any of
        the covenants or agreements  contained  in, or the  conditions  of, this
        Loan Agreement or the other Loan Documents; (iii) the state or condition
        of any  properties  of the  Borrowers  or any  other  obligor  hereunder
        constituting  Collateral for the Obligations of the Borrowers hereunder,
        or any  information  contained in the books or records of the Borrowers;
        (iv) the  validity,  enforceability,  collectibility,  effectiveness  or
        genuineness  of this Loan  Agreement  or any other Loan  Document or any
        other  certificate,  document  or  instrument  furnished  in  connection
        therewith;  or (v) the  validity,  priority  or  perfection  of any lien
        securing  or  purporting  to  secure  the  Obligations  or the  value or
        sufficiency of any of the Collateral.

                11.1.5  Reliance by Agent.  The Agent shall be entitled to rely,
        and shall be fully  protected  in  relying,  upon any  notice,  consent,
        certificate,  affidavit,  or other document or writing believed by it to
        be genuine  and  correct  and to have been  signed,  sent or made by the
        proper  person or persons,  and upon the advice and  statements of legal
        counsel  (including,  without,  limitation,  counsel to the  Borrowers),
        independent  accountants  and other experts  selected by the Agent.  The
        Agent shall be fully justified in failing or refusing to take any action
        under this Loan  Agreement  or any other Loan  Document  unless it shall
        first receive such advice or concurrence of the Requisite  Lenders as it
        deems  appropriate or it shall first be indemnified to its  satisfaction
        by the Lenders  against any and all  liability  and expense which may be
        incurred  by it by reason  of the  taking  or  failing  to take any such
        action. The Agent shall in all cases be fully protected in acting, or in
        refraining from acting, under this Loan



                                      -54-
<PAGE>



        Agreement and the other Loan  Documents in  accordance  with any written
        request of the Requisite Lenders, and each such request of the Requisite
        Lenders,  and any action  taken or failure to act by the Agent  pursuant
        thereto,  shall be binding upon all of the Lenders;  provided,  however,
        that the Agent  shall not be required in any event to act, or to refrain
        from acting, in any manner which is contrary to the Loan Documents or to
        applicable law.

                11.1.6 Notice of Default.  The Agent shall not be deemed to have
        knowledge or notice of the occurrence of any Default or Event of Default
        unless the Agent has actual knowledge of the same or has received notice
        from a  Lender  or the  Borrowers  referring  to  this  Loan  Agreement,
        describing such Default or Event of Default and stating that such notice
        is a "notice  of  default".  In the event  that the Agent  obtains  such
        actual knowledge or receives such a notice,  the Agent shall give prompt
        notice thereof to each of the Lenders.  The Agent shall take such action
        with respect to such Default or Event of Default as shall be  reasonably
        directed by the Requisite Lenders. Unless and until the Agent shall have
        received such  direction,  the Agent may (but shall not be obligated to)
        take such action,  or refrain  from taking such action,  with respect to
        any such  Default or Event of Default as it shall deem  advisable in the
        best interest of the Lenders,  provided,  however,  that the Agent shall
        not accelerate the  indebtedness  under this Loan Agreement  without the
        prior written consent of the Requisite Lenders.

                11.1.7 Lenders' Credit Decisions.  Each Lender acknowledges that
        it has,  independently  and without reliance upon the Agent or any other
        Lender, and based on the financial  statements prepared by the Borrowers
        and such other documents and  information as it has deemed  appropriate,
        made its own  credit  analysis  and  investigation  into  the  business,
        assets,  operations,  property, and financial and other condition of the
        Borrowers  and has  made  its own  decision  to  enter  into  this  Loan
        Agreement and the other Loan  Documents.  Each Lender also  acknowledges
        that it will,  independently  and without reliance upon the Agent or any
        other Lender,  and based on such  documents and  information as it shall
        deem appropriate at the time,  continue to make its own credit decisions
        in determining  whether or not conditions  precedent to closing any Loan
        hereunder  have been  satisfied  and in taking or not  taking any action
        under this Loan Agreement and the other Loan Documents.

                11.1.8 Agent's  Reimbursement and  Indemnification.  The Lenders
        agree to reimburse  and  indemnify  the Agent,  ratably in proportion to
        their respective Commitments,  for (i) any amounts not reimbursed by the
        Borrowers  for which  the  Agent is  entitled  to  reimbursement  by the
        Borrowers  under this Loan Agreement or the other Loan  Documents,  (ii)
        any other  expenses  incurred  by the Agent on behalf of the  Lenders in
        connection with the preparation,  execution,  delivery,  administration,
        amendment,  waiver  and/or  enforcement  of this Loan  Agreement and the
        other Loan Documents,  and (iii) any liabilities,  obligations,  losses,
        damages,  penalties,  actions,  judgments,  suits,  costs,  expenses  or
        disbursements  of any kind and nature  whatsoever  which may imposed on,
        incurred  by or  asserted  against  the Agent in any way  relating to or
        arising out of this Loan  Agreement  or the other Loan  Documents or any
        other  document  delivered in  connection  therewith or any  transaction
        contemplated  thereby,  or the enforcement of any of the terms hereof or
        thereof,  provided  that  no  Lender  shall  be  liable  for  any of the
        foregoing  to the extent  that they arise from the gross  negligence  or
        willful misconduct of the Agent. If any indemnity furnished to the Agent
        for any purpose shall,  in the opinion of the Agent,  be insufficient or
        become impaired,  the Agent may call for additional indemnity and cease,
        or not  commence,  to do  the  action  indemnified  against  until  such
        additional indemnity is furnished.



                                      -55-
<PAGE>



                11.1.9  Agent in its  Individual  Capacity.  With respect to its
        Commitment as a Lender,  and the Loans made by it and the Note issued to
        it, the Agent shall have the same rights and powers  hereunder and under
        any other  Loan  Document  as any Lender  and may  exercise  the same as
        though it were not the Agent,  and the term "Lender" or "Lenders" shall,
        unless  the  context  otherwise  indicates,  include  the  Agent  in its
        individual  capacity.  The Agent and its subsidiaries and affiliates may
        accept deposits from, lend money to, and generally engage in any kind of
        commercial or investment banking, trust, advisory or other business with
        the  Borrowers or any  subsidiary or affiliate of the Borrowers as if it
        were not the Agent hereunder.

                11.1.10  Successor  Agent.  The Agent may  resign at any time by
        giving  thirty  (30)  days'  prior  written  notice to the  Lenders  and
        Borrowers.  The Requisite  Lenders,  for good cause, may remove Agent at
        any time by giving thirty (30) days' prior written  notice to the Agent,
        the  Borrowers  and the  other  Lenders.  Upon any such  resignation  or
        removal,  the  Requisite  Lenders  shall  have the  right to  appoint  a
        successor  Agent.  If no successor Agent shall have been so appointed by
        the Requisite  Lenders and accepted such appointment  within thirty (30)
        days after the retiring  Agent's  giving  notice of  resignation  or the
        Requisite  Lenders'  giving notice of removal,  as the case may be, then
        the  retiring  Agent may  appoint,  on behalf of the  Borrowers  and the
        Lenders,  a  successor  Agent.  Each  such  successor  Agent  shall be a
        financial  institution  which  meets  the  requirements  of an  Eligible
        Assignee. Upon the acceptance of any appointment as Agent hereunder by a
        successor  Agent,  such successor Agent shall  thereupon  succeed to and
        become vested with all the rights, powers,  privileges and duties of the
        retiring  Agent,  and the retiring  Agent shall be  discharged  from its
        duties and  obligations  hereunder  and under the other Loan  Documents.
        After any retiring Agent's resignation hereunder, the provisions of this
        Section 11 shall  continue  in effect for its  benefit in respect of any
        actions  taken or  omitted  to be taken by it while it was acting as the
        Agent hereunder.

                11.1.11 Duties in the Case of  Enforcement.  In case one or more
        Events of Default have occurred and shall be continuing,  and whether or
        not  acceleration  of the  Obligations  shall have  occurred,  the Agent
        shall,  at the  request,  or may,  upon the  consent,  of the  Requisite
        Lenders,  and  provided  that the  Lenders  have given to the Agent such
        additional  indemnities and assurances  against expenses and liabilities
        as the Agent may reasonably  request,  proceed to enforce the provisions
        of this Loan  Agreement  and the other  Loan  Documents  respecting  the
        foreclosure  of mortgages,  the sale or other  disposition of all or any
        part of the  Collateral and the exercise of any other legal or equitable
        rights or  remedies  as it may have  hereunder  or under any other  Loan
        Document or otherwise by virtue of applicable law, or to refrain from so
        acting if similarly requested by the Requisite Lenders.  The Agent shall
        be fully  protected  in so acting or  refraining  from  acting  upon the
        instruction  of the Requisite  Lenders,  and such  instruction  shall be
        binding upon all the Lenders. The Requisite Lenders may direct the Agent
        in writing as to the method and the extent of any such foreclosure, sale
        or other  disposition or the exercise of any other right or remedy,  the
        Lenders  hereby  agreeing to indemnify and hold the Agent  harmless from
        all costs and  liabilities  incurred in respect of all actions  taken or
        omitted in accordance with such direction,  provided that the Agent need
        not  comply  with any  such  direction  to the  extent  that  the  Agent
        reasonably  believes the Agent's  compliance  with such  direction to be
        unlawful or commercially  unreasonable  in any applicable  jurisdiction.
        The Agent may, in its discretion but without obligation,  in the absence
        of direction from the Requisite Lenders, take such interim actions as it
        believes  necessary to preserve the rights of the Lenders  hereunder and
        in and to any Collateral securing



                                      -56-
<PAGE>



        the  Obligations,  including but not limited to  petitioning a court for
        injunctive  relief,  appointment  of a receiver or  preservation  of the
        proceeds of any Collateral.  Each of the Lenders acknowledges and agrees
        that no individual Lender may separately  enforce or exercise any of the
        provisions of any of the Loan Documents,  including  without  limitation
        the Notes, other than through the Agent.

        11.2 Respecting Loans and Payments.

                11.2.1  Procedures for  Warehousing  Advances.  Agent shall give
        written notice to each Lender of each request for a Warehousing  Advance
        by facsimile transmission, hand delivery or overnight courier, not later
        than 11:00  a.m.  (Boston  time)  three (3)  Business  Days prior to any
        Warehousing  Advance or change of an  existing  Interest  Period for any
        existing  LIBOR  Advance.  Each such notice  shall be  accompanied  by a
        written  summary of the  request  for a  Warehousing  Advance  and shall
        specify  (a) the  date of the  requested  Warehousing  Advance,  (b) the
        aggregate amount of the requested Warehousing Advance, (c) each Lender's
        pro  rata  share  of the  requested  Warehousing  Advance,  and  (d) the
        applicable  Interest  Period  selected by Borrowers with respect to such
        Warehousing  Advance,  or  any  portion  thereof,  selected,  or  deemed
        selected,  by Borrowers.  Each Lender shall,  before 11:00 a.m.  (Boston
        time) on the  date set  forth  in any  such  request  for a  Warehousing
        Advance,  make  available to Agent,  at an account to be  designated  by
        Agent at  Fleet  National  Bank in  Boston,  Massachusetts,  in same day
        funds,  each  Lender's  ratable  portion  of the  requested  Warehousing
        Advance.   After  Agent's   receipt  of  such  funds  and  upon  Agent's
        determination  that the  applicable  conditions  to making the requested
        Warehousing  Advance  have been  fulfilled,  Agent shall make such funds
        available to Borrowers as provided for in this Loan Agreement.  Within a
        reasonable  period of time  following  the  making  of each  Warehousing
        Advance,  Agent  shall  deliver  to  each  Lender  a copy  of  any  such
        Borrower's request for such Warehousing Advance.  Promptly after receipt
        by Agent of written request from any Lender,  Agent shall deliver to the
        requesting  Lender  the  accompanying   certifications  and  such  other
        instruments,  documents, certifications and approvals delivered by or on
        behalf of  Borrowers  to Agent in support of the  requested  Warehousing
        Advance.

                11.2.2 Nature of Obligations of Lenders.  The obligations of the
        Lenders  hereunder  are several and not joint.  Failure of any Lender to
        fulfill its  obligations  hereunder shall not result in any other Lender
        becoming obligated to advance more than its Commitment Percentage of the
        Loan, nor shall such failure  release or diminish the obligations of any
        other Lender to fund its Commitment Percentage provided herein.

                11.2.3  Payments  to Agent.  All  payments of  principal  of and
        interest  on the Loan or the  Notes  shall  be made to the  Agent by the
        Borrowers  or any other  obligor  or  guarantor  for the  account of the
        Lenders in immediately available funds as provided in the Notes and this
        Loan Agreement. Except as otherwise expressly provided herein, the Agent
        agrees to use its  reasonable  best efforts to promptly to distribute to
        each  Lender,  on the same  Business Day upon which each such payment is
        made (if  received  prior  to 2:00  p.m.  on such  Business  Day),  such
        Lender's  proportionate  share  of  each  such  payment  in  immediately
        available   funds   excluding   Liquidation   Proceeds  which  shall  be
        distributed  in accordance  with Section  11.2.4 below.  The Agent shall
        upon each  distribution  promptly notify Borrowers of such  distribution
        and each Lender of the amounts distributed to it applicable to principal
        of, and  interest  on, the  proportionate  share held by the  applicable
        Lender.  Each  payment  to the Agent  under the first  sentence  of this
        Section  shall  constitute a payment by the  Borrowers to each Lender in
        the amount of



                                      -57-
<PAGE>



        such Lender's  proportionate share of such payment, and any such payment
        to the Agent shall not be considered  outstanding  for any purpose after
        the date of such payment by the Borrowers to the Agent without regard to
        whether or when the Agent makes distribution  thereof as provided above.
        If any payment  received by the Agent from the Borrowers is insufficient
        to pay both all accrued  interest and all principal  then due and owing,
        the Agent  shall first apply such  payment to all  outstanding  interest
        until paid in full and shall then apply the remainder of such payment to
        all principal  then due and owing,  and shall  distribute the payment to
        each Lender accordingly.

                11.2.4  Distribution  of  Liquidation  Proceeds.  Subject to the
        terms and conditions  hereof, the Agent shall distribute all Liquidation
        Proceeds in the order and manner set forth below:

                First:  To the  Agent,  towards  any fees and any  expenses  for
                        which the Agent is entitled to reimbursement  under this
                        Agreement or the other Loan  Documents  not  theretofore
                        paid to the Agent.

                Second: To all  applicable  Lenders  in  accordance  with  their
                        proportional   share   based   upon   their   respective
                        Commitment  Percentages  until  all  Lenders  have  been
                        reimbursed  for all  expenses  which such  Lenders  have
                        previously paid to the Agent and not theretofore paid to
                        such Lenders.

                Third:  To all  Lenders in  accordance  with their  proportional
                        share based upon their respective Commitment Percentages
                        until all Lenders  have been paid in full all  principal
                        and interest due to such  Lenders  under the Loan,  with
                        each Lender  applying such proceeds for purposes of this
                        Agreement  first  against  the   outstanding   principal
                        balance  due to such  Lender  under the Loan and then to
                        accrued and unpaid interest due under the Loan.

                Fourth: To Fleet  National Bank any costs and expenses  incurred
                        directly  by  Fleet  National  Bank as a  result  of any
                        breach of any Interest Rate Protection Agreements.

                Fifth:  To all  applicable  Lenders  in  accordance  with  their
                        proportional   share   based   upon   their   respective
                        Commitment  Percentages until all Lenders have been paid
                        in full all other  amounts due to such Lenders under the
                        Loan  including,   without  limitation,  any  costs  and
                        expenses incurred directly by such Lenders to the extent
                        such costs and expenses are reimbursable to such Lenders
                        by the Borrowers under the Loan Documents.

                Sixth:  To  the  Borrowers  or  such  third  parties  as  may be
                        entitled to claim Liquidation Proceeds.

                11.2.5  Adjustments.  If,  after  Agent has paid  each  Lender's
        proportionate  share of any  payment  received  or  applied  by Agent in
        respect of the Loan,  that  payment is  rescinded  or must  otherwise be
        returned or paid over by Agent,  whether  pursuant to any  bankruptcy or
        insolvency  law,  sharing of payments  clause of any loan  agreement  or
        otherwise,  such Lender shall, at Agent's  request,  promptly return its
        proportionate  share of such payment or application  to Agent,  together
        with



                                      -58-
<PAGE>



        the  Lender's  proportionate  share  of any  interest  or  other  amount
        required  to  be  paid  by  Agent  with   respect  to  such  payment  or
        application.

                11.2.6 Setoff.  If any Lender  (including the Agent),  acting in
        its  individual  capacity,  shall exercise any right of setoff against a
        deposit balance or other account of the Borrowers held by such Lender on
        account of the  obligations of the Borrowers  under this Loan Agreement,
        such Lender shall remit to the Agent all such sums received  pursuant to
        the exercise of such right of setoff, and the Agent shall apply all such
        sums for the benefit of all of the Lenders  hereunder in accordance with
        the terms of this Loan Agreement.

                11.2.7  Distribution  by Agent.  If in the  opinion of the Agent
        distribution of any amount received by it in such capacity  hereunder or
        under the Notes or under any of the other Loan  Documents  might involve
        any liability,  it may refrain from making  distribution until its right
        to make distribution shall have been adjudicated by a court of competent
        jurisdiction  or has been resolved by the mutual consent of all Lenders.
        In addition, the Agent may request full and complete indemnity,  in form
        and substance satisfactory to it, prior to making any such distribution.
        If a court of  competent  jurisdiction  shall  adjudge  that any  amount
        received and  distributed  by the Agent is to be repaid,  each person to
        whom any such  distribution  shall have been made shall  either repay to
        the Agent its proportionate share of the amount so adjudged to be repaid
        or shall  pay over to the same in such  manner  and to such  persons  as
        shall be determined by such court.

                11.2.8  Delinquent  Lender.  If for any reason any Lender  shall
        fail or refuse to abide by its  obligations  under this Loan  Agreement,
        including  without  limitation its obligation to make available to Agent
        its pro rata  share of any  Loans,  expenses  or setoff  (a  "Delinquent
        Lender")  and such  failure is not cured within ten (10) days of receipt
        from the Agent of written  notice  thereof,  then,  in  addition  to the
        rights and remedies that may be available to Agent,  other Lenders,  the
        Borrowers or any other party at law or in equity,  and not at limitation
        thereof,  (i)  such  Delinquent  Lender's  right to  participate  in the
        administration of, or decision-making rights related to, the Loans, this
        Loan Agreement or the other Loan Documents shall be suspended during the
        pendency of such failure or refusal,  and (ii) a Delinquent Lender shall
        be  deemed  to have  assigned  any and all  payments  due to it from the
        Borrowers,  whether on account of outstanding Loans,  interest,  fees or
        otherwise,  to the remaining  non-delinquent Lenders for application to,
        and reduction of, their  proportionate  shares of all outstanding  Loans
        until, as a result of application of such assigned payments the Lenders'
        respective pro rata shares of all outstanding  Loans shall have returned
        to those in effect  immediately  prior to such  delinquency  and without
        giving effect to the nonpayment causing such delinquency. The Delinquent
        Lender's decision-making and participation rights and rights to payments
        as set forth in clauses (i) and (ii) hereinabove  shall be restored only
        upon the payment by the  Delinquent  Lender of its pro rata share of any
        Loans or expenses as to which it is  delinquent,  together with interest
        thereon at the Default Rate from the date when  originally due until the
        date upon which any such amounts are actually paid.

                The  non-delinquent  Lenders shall also have the right,  but not
        the obligation,  in their respective,  sole and absolute discretion,  to
        acquire for no cash  consideration,  (pro rata,  based on the respective
        Commitments  of those  Lenders  electing  to  exercise  such  right) the
        Delinquent  Lender's  Commitment  to  fund  future  Loans  (the  "Future
        Commitment").  Upon  any  such  purchase  of the pro  rata  share of any
        Delinquent Lender's Future Commitment,  the Delinquent Lender's share in
        future Loans and its rights



                                      -59-
<PAGE>



        under the Loan  Documents  with respect  thereto shall  terminate on the
        date of purchase,  and the Delinquent  Lender shall promptly execute all
        documents  reasonably requested to surrender and transfer such interest,
        including,  if  so  requested,   an  Assignment  and  Acceptance.   Each
        Delinquent Lender shall indemnify Agent and each  non-delinquent  Lender
        from and against any and all loss, damage or expenses, including but not
        limited to reasonable  attorneys' fees and funds advanced by Agent or by
        any non-delinquent  Lender, on account of a Delinquent  Lender's failure
        to timely fund its pro rata share of a Loan or to otherwise  perform its
        obligations under the Loan Documents.

                11.2.9  Holders.  The  Agent may deem and treat the payee of any
        Note as the owner  thereof for all  purposes  hereof  unless and until a
        written notice of the assignment,  transfer or endorsement  thereof,  as
        the case may be,  shall have been filed  with the  Agent.  Any  request,
        authority  or consent of any person or entity who, at the time of making
        such request or giving such  authority or consent,  is the holder of any
        Note  shall  be  conclusive  and  binding  on  any  subsequent   holder,
        transferee or endorsee,  as the case may be, of such Note or of any Note
        or Notes issued in exchange therefor.

        11.3 Assignment and Participation.

                11.3.1  Conditions to Assignment by Lenders.  Except as provided
        herein,  each Lender may assign to one or more Eligible Assignees all or
        a portion  of its  interests,  rights  and  obligations  under this Loan
        Agreement  (including all or a portion of its Commitment  Percentage and
        Commitment and the same portion of the Loans at the time owing to it and
        the Notes held by it), upon  satisfaction  of the following  conditions:
        (a) each of the  Agent  and the  Borrowers  shall  have  given its prior
        written  consent to such  assignment  (provided that, in the case of the
        Borrowers,  such consent will not be unreasonably withheld and shall not
        be required if a Default or Event of Default  shall have occurred and be
        continuing);  (b) each such assignment shall be of a constant, and not a
        varying, percentage of all the assigning Lender's rights and obligations
        under this Loan  Agreement,  (c) each  assignment  shall be in an amount
        that is at least  $10,000,000.00 and is a whole multiple of $250,000.00,
        (d) each Lender which is a Lender at the time of such  assignment  shall
        retain, free of any such assignment,  an amount of its Commitment of not
        less than $5,000,000.00,  (e) the Agent, in its individual capacity as a
        Lender,  shall  retain,  free of any such  assignment,  an amount of its
        Commitment of not less than $20,000,000.00,  and (f) the parties to such
        assignment  shall execute and deliver to the Agent, for recording in the
        Register  (as  hereinafter   defined),  an  Assignment  and  Acceptance,
        substantially  in the form of  Exhibit  F  hereto  (an  "Assignment  and
        Acceptance"),  together with any Notes subject to such assignment.  Upon
        such execution,  delivery,  acceptance and recording, from and after the
        effective  date  specified  in each  Assignment  and  Acceptance,  which
        effective  date  shall be at least  five (5)  Business  Days  after  the
        execution thereof,  (x) the assignee  thereunder shall be a party hereto
        and, to the extent provided in such Assignment and Acceptance,  have the
        rights and  obligations  of a Lender  hereunder,  and (y) the  assigning
        Lender shall, to the extent provided in such assignment and upon payment
        to the Agent of the registration  fee referred to in Section 13.3.3,  be
        released from its obligations under this Loan Agreement.

                11.3.2  Certain  Representations  and  Warranties.  Limitations,
        Covenants. By executing and delivering an Assignment and Acceptance, the
        parties  to the  assignment  thereunder  confirm  to and agree with each
        other and the other parties hereto as follows:



                                      -60-
<PAGE>



                        (a) other than the  representation  and warranty that it
                is the legal and beneficial owner of the interest being assigned
                thereby  free and  clear of any  adverse  claim,  the  assigning
                Lender makes no representation or warranty,  express or implied,
                and assumes no  responsibility  with respect to any  statements,
                warranties or representations made in or in connection with this
                Loan   Agreement   or   the   execution,   legality,   validity,
                enforceability,  genuineness,  sufficiency or value of this Loan
                Agreement,  the other Loan Documents or any other  instrument or
                document furnished pursuant hereto or the attachment, perfection
                or priority of any security interest or mortgage;

                        (b) the  assigning  Lender  makes no  representation  or
                warranty  and  assumes  no  responsibility  with  respect to the
                financial condition of the Borrowers and its affiliates, related
                entities  or  subsidiaries  or any  other  person  primarily  or
                secondarily liable in respect of any of the Obligations,  or the
                performance  or  observance by the Borrowers or any other person
                primarily  or  secondarily  liable  in  respect  of  any  of the
                Obligations  of  any  of  their   obligations  under  this  Loan
                Agreement  or any of  the  other  Loan  Documents  or any  other
                instrument or document furnished pursuant hereto or thereto;

                        (c) such  assignee  confirms that it has received a copy
                of this Loan Agreement,  together with copies of the most recent
                financial  statements  provided by the  Borrowers as required by
                the  terms of this Loan  Agreement,  together  with  such  other
                documents and  information as it has deemed  appropriate to make
                its  own  credit  analysis  and  decision  to  enter  into  such
                Assignment and Acceptance;

                        (d)  such  assignee  will,   independently  and  without
                reliance  upon the  assigning  Lender,  the  Agent or any  other
                Lender and based on such  documents and  information as it shall
                deem  appropriate  at the time,  continue to make its own credit
                decisions  in  taking  or not  taking  action  under  this  Loan
                Agreement;

                        (e) such assignee  represents and warrants that it is an
                Eligible Assignee;

                        (f) such assignee  appoints and  authorizes the Agent to
                take such  action as agent on its  behalf and to  exercise  such
                powers under this Loan Agreement and the other Loan Documents as
                are  delegated  to the  Agent by the terms  hereof  or  thereof,
                together with such powers as are reasonably  incidental thereto;

                (g) such assignee agrees that it will perform in accordance with
                their  terms  all of the  obligations  that by the terms of this
                Loan  Agreement  are required to be performed by it as a Lender;
                and

                        (h) such  assignee  represents  and warrants  that it is
                legally authorized to enter into such Assignment and Acceptance.

                11.3.3  Register.  The  Agent  shall  maintain  a copy  of  each
        Assignment and Acceptance delivered to it and a register or similar list
        (the  "Register")  for the recordation of the names and addresses of the
        Lenders and the Commitment  Percentage  of, and principal  amount of the
        Loans  owing to the  Lenders  from  time to  time.  The  entries  in the
        Register shall be conclusive, in the absence of



                                      -61-
<PAGE>



        manifest error,  and the Borrowers,  the Agent and the Lenders may treat
        each person whose name is recorded in the Register as a Lender hereunder
        for all purposes of this Loan Agreement. The Register shall be available
        for inspection by the Borrowers and the Lenders at any  reasonable  time
        and from  time to time  upon  reasonable  prior  notice.  Upon each such
        recordation,  the  assigning  Lender  agrees  to  pay  to  the  Agent  a
        registration fee in the sum of ($5,000.00).

                11.3.4  New  Notes.  Upon  its  receipt  of  an  Assignment  and
        Acceptance  executed by the parties to such  assignment,  together  with
        each Note  subject to such  assignment,  the Agent  shall (a) record the
        information  contained  therein  in the  Register,  and (b) give  prompt
        notice  thereof  to the  Borrowers  and  the  Lenders  (other  than  the
        assigning  Lender).  Within five (5) Business Days after receipt of such
        notice, the Borrowers,  at their own expense,  shall execute and deliver
        to the Agent, in exchange for each  surrendered  Note, a new Note to the
        order of such Eligible Assignee in an amount equal to the amount assumed
        by such Eligible  Assignee  pursuant to such  Assignment  and Acceptance
        and,  if  the  assigning   Lender  has  retained  some  portion  of  its
        obligations  hereunder,  a new Note to the order of the assigning Lender
        in an amount  equal to the amount  retained  by it  hereunder.  Such new
        Notes  shall  provide  that they are  replacements  for the  surrendered
        Notes, shall be in an aggregate  principal amount equal to the aggregate
        principal amount of the surrendered  Notes, shall be dated the effective
        date  of  such   Assignment  and  Acceptance  and  shall   otherwise  be
        substantially  the form of the assigned  Notes.  Within five (5) days of
        issuance of any new Notes pursuant to this Section 11.3.4, the Borrowers
        shall  deliver an opinion of counsel,  addressed  to the Lenders and the
        Agent, relating to the due authorization, execution and delivery of such
        new Notes and the legality, validity and binding effect thereof, in form
        and substance  satisfactory to the Lenders.  The surrendered Notes shall
        be cancelled and returned to the Borrowers.

                11.3.5  Participations.  Each Lender may sell  participations to
        one or more banks or other financial institutions in all or a portion of
        such Lender's rights and  obligations  under this Loan Agreement and the
        other Loan Documents; provided that (a) each such participation shall be
        in a minimum amount of  $5,000,000.00,  (b) each participant  shall meet
        the  requirements  of  an  Eligible  Assignee,  (c)  any  such  sale  or
        participation  shall not affect  the  rights  and duties of the  selling
        Lender  hereunder to the  Borrowers,  and (d) the only rights granted to
        the participant pursuant to such participation arrangements with respect
        to waivers,  amendments or  modifications of the Loan Documents shall be
        the rights to approve waivers,  amendments or  modifications  that would
        reduce the  principal of or the interest  rate on any Loans,  extend the
        term or  increase  the  amount of the  Commitment  of such  Lender as it
        relates to such participant, reduce the amount of any commitment fees to
        which such  participant  is entitled or extend any  regularly  scheduled
        payment date for principal or interest.

                11.3.6  Disclosure.  The  Borrowers  agrees  that in addition to
        disclosures  made in  accordance  with  standard and  customary  banking
        practices  any Lender may disclose  information  obtained by such Lender
        pursuant  to this  Loan  Agreement  to  assignees  or  participants  and
        potential  assignees  or  participants  hereunder;  provided  that  such
        assignees or participants or potential  assignees or participants  shall
        agree  (a)  to  treat  in  confidence  such   information   unless  such
        information otherwise becomes public knowledge, (b) not to disclose such
        information to a third party, except as required by law or legal process
        and (c) not to make use of such information for purposes of transactions
        unrelated to such contemplated assignment or participation.



                                      -62-
<PAGE>



                11.3.7 Miscellaneous Assignment Provisions. Any assigning Lender
        shall retain its rights to be indemnified  pursuant to Section 7.25 with
        respect  to any  claims  or  actions  arising  prior to the date of such
        assignment. If any assignee Lender is not incorporated under the laws of
        the United States of America or any state  thereof,  it shall,  prior to
        the date on which any  interest or fees are payable  hereunder  or under
        any  of the  other  Loan  Documents  for  its  account,  deliver  to the
        Borrowers and the Agent  certification as to exemption from deduction or
        withholding  of  any  United  States  federal  income  taxes.   Anything
        contained in this Section  11.3.7 to the contrary  notwithstanding,  any
        Lender may at any time  pledge all or any  portion of its  interest  and
        rights under this Loan  Agreement  (including  all or any portion of its
        Notes)  to any of the  twelve  Federal  Reserve  Banks  organized  under
        Section 4 of the Federal  Reserve  Act, 12 U.S.C.  Section  341. No such
        pledge or the enforcement  thereof shall release the pledgor Lender from
        its obligations hereunder or under any of the other Loan Documents.

                11.3.8  Assignment by Borrowers.  The Borrowers shall not assign
        or transfer  any of their  rights or  obligations  under any of the Loan
        Documents without the prior written consent of each of the Lenders.

        11.4 Administrative Matters.

                11.4.1  Amendment,  Waiver,  Consent,  Etc.  Except as otherwise
        provided herein or as to any term or provision hereof which provides for
        the consent or approval of the Agent,  no term or provision of this Loan
        Agreement or any other Loan Document may be changed, waived,  discharged
        or  terminated,  nor may any consent  required or permitted by this Loan
        Agreement  or any other Loan  Document  be given,  unless  such  change,
        waiver, discharge,  termination or consent receives the written approval
        of the Requisite Lenders.

                Notwithstanding the foregoing, the unanimous written approval of
        all the Lenders (other than a Defaulting  Lender) shall be required with
        respect to any proposed amendment,  waiver, discharge,  termination,  or
        consent which:

                        (i) has the effect of (a) extending the final  scheduled
                maturity or the date of any amortization  payment of any Loan or
                Note,  (b) reducing the rate or extending the time of payment of
                interest  or  fees  thereon,  (c)  increasing  or  reducing  the
                principal  amount  thereof,  or  (d)  otherwise   postponing  or
                forgiving any indebtedness thereunder,

                        (ii) releases or discharges any material  portion of the
                Collateral other than in accordance with the express  provisions
                of the Loan Documents,

                        (iii) amends,  modifies or waives any provisions of this
                paragraph 11.4.1,

                        (iv)  amends,  modifies  or  waives  any  provisions  of
                Section 2.1.3 and the  limitations set forth on Exhibit E or the
                definition  of any  term  used  therein  or  used  in any of the
                financial covenants set forth in Section 7.26,

                        (v) reduces the  percentage  specified in the definition
                of Requisite Lenders,



                                      -63-
<PAGE>

                        (vi) except as otherwise provided in the Loan Agreement,
                changes  the amount of any  Lender's  Commitment  or  Commitment
                Percentage, or

                        (vii) releases or waives any guaranty of the Obligations
                or indemnifications provided in the Loan Documents;

        and provided,  further,  that without the consent of the Agent,  no such
        action shall amend, modify or waive any provision of this Article or any
        other  provision  of any Loan  Document  which  relates to the rights or
        obligations of the Agent.

                11.4.2 Deemed Consent or Approval. With respect to any requested
        amendment,  waiver,  consent or other action which requires the approval
        of the Requisite  Lenders or all of the Lenders,  as the case may be, in
        accordance  with the  terms of this Loan  Agreement,  or if the Agent is
        required  hereunder  to seek,  or desires to seek,  the  approval of the
        Requisite  Lenders or all of the  Lenders,  as the case may be, prior to
        undertaking a particular action or course of conduct,  the Agent in each
        such case shall  provide  each  Lender with  written  notice of any such
        request  for  amendment,  waiver or  consent or any other  requested  or
        proposed  action or  course of  conduct,  accompanied  by such  detailed
        background  information and explanations as may be reasonably  necessary
        to determine  whether to approve or disapprove such  amendment,  waiver,
        consent or other  action or course of conduct.  The Agent may (but shall
        not be  required  to)  include  in any such  notice,  printed in capital
        letters  or  boldface  type,  a legend  substantially  to the  following
        effect:

        "THIS  COMMUNICATION  REQUIRES  IMMEDIATE  RESPONSE.  FAILURE TO RESPOND
        WITHIN TEN (10)  CALENDAR  DAYS FROM THE  RECEIPT OF THIS  COMMUNICATION
        SHALL  CONSTITUTE  A DEEMED  APPROVAL  BY THE  ADDRESSEE  OF THE  ACTION
        REQUESTED  BY THE  BORROWERS  OR THE COURSE OF CONDUCT  PROPOSED  BY THE
        AGENT AND RECITED ABOVE,"

        and  if  the   foregoing   legend  is  included  by  the  Agent  in  its
        communication, a Lender shall be deemed to have approved or consented to
        such  action or course of conduct  for all  purposes  hereunder  if such
        Lender  fails to object to such  action or course of  conduct by written
        notice to the  Agent  within  ten (10)  calendar  days of such  Lender's
        receipt of such notice.

12. GENERAL PROVISIONS.

        12.1 Notices.  Any notice or other communication in connection with this
Loan Agreement, the Note, or any of the other Loan Documents (a "Notice"), shall
be in writing,  and (i) deposited in the United States Mail, postage prepaid, by
registered  or  certified  mail,  or  (ii)  hand  delivered  by  any  commercial
recognized  courier  service  or  overnight  delivery  service  such as  Federal
Express,  or (iii) sent by facsimile  transmission if a FAX Number is designated
below, addressed:



                                      -64-
<PAGE>



               If to Borrowers:

                      PW Funding Inc.
                      200 Old Country Road, Suite 580
                      Mineola, New York 11501
                      FAX Number: (516) 873-0080
                      Attention: Chief Financial Officer

                      Cambridge Healthcare Funding Inc.
                      200 Old Country Road, Suite 580
                      Mineola, New York 11501
                      FAX Number: (516) 873-0080
                      Attention: Chief Financial Officer

                      Larson Financial Resources, Inc.
                      150 Morristown Road, Suite 201
                      Bernardsville, New Jersey 07924
                      FAX Number: (516) 873-0080
                      Attention: Chief Financial Officer


                with copies by regular  mail or such hand  delivery or facsimile
                transmission to:

                      Proskauer Rose LLP
                      1585 Broadway
                      New York, New York 10036
                      FAX Number: (212) 969-2900
                      Attention: Steven Fishman, Esquire

If to Lender:

                      Fleet National Bank
                      One Federal Street
                      Boston, Massachusetts 02110
                      FAX Number: (617) 346-4670
                      Attention: Mr. John F. Simon
                      Mail Stop: MA DE 10304X

        with  copies  by  regular  mail  or  such  hand  delivery  or  facsimile
transmission to (which shall not constitute notice):



                                      -65-
<PAGE>



                      Riemer & Braunstein LLP
                      Three Center Plaza
                      Boston, Massachusetts 02108
                      FAX Number: (617) 880-3456
                      Attention: Ronald N. Braunstein, Esquire


If to a Lender:       To such address for such Lender as appears on Schedule 1.

Any such addressee may change its address for such notices to such other address
in the United States as such  addressee  shall have  specified by written notice
given as set forth  above.  All  periods of notice  shall be  measured  from the
deemed date of delivery.

        A notice shall be deemed to have been given,  delivered and received for
the  purposes of all Loan  Documents  upon the  earliest of: (i) if sent by such
certified or registered  mail,  on the third  Business Day following the date of
postmark,  or (ii) if hand delivered at the specified address by such courier or
overnight  delivery  service,  when so delivered or tendered for delivery during
customary  business hours on a Business Day, or (iii) if so mailed,  on the date
of actual receipt as evidenced by the return  receipt,  or (iv) if so delivered,
upon actual  receipt,  or (v) if facsimile  transmission is a permitted means of
giving notice, upon receipt as evidenced by confirmation.

        12.2 Payments to be Charged as an Advance. Any payments required by this
Agreement,  the Notes or any of the other Loan Documents may (but not before the
due date  thereof) be deducted  by Lender from the amount,  if any,  not already
advanced, and the same shall be deemed to be a loan, or may be deducted from any
Loan due hereunder.  Any attorneys'  fees,  inspection fee, or any other expense
payable by Borrowers as herein  provided for, or incurred in connection with the
examination of the Collateral for the Loan, any tangible or intangible assets of
the  Borrowers,  the  drafting  of the  Loan  Documents  and  other  instruments
evidencing  or securing  the  Obligations  and all other Loan  Documents  may be
likewise  deducted  from the amounts,  if any, not already  advanced or from any
Loan payable to Borrowers and, in any event,  charged as a Loan  hereunder,  but
only to the extent payable by the Borrowers pursuant to Section 7.24 hereof.

        12.3 Parties Bound; Integration. The provisions of this Agreement and of
each of the other Loan Documents  shall be binding upon and inure to the benefit
of  Borrowers  and the  Agent  and  each of the  Lenders  and  their  respective
successors and assigns,  except as otherwise prohibited by this Agreement or any
of the other Loan Documents.

        This Agreement is a contract by and among  Borrowers,  Agent and each of
the Lenders for their mutual benefit,  and no third person shall have any right,
claim or interest  against  either  Agent,  any of the Lenders,  or Borrowers by
virtue of any provision hereof.

        This Agreement is intended by the  Borrowers,  the Agent and the Lenders
as the final, complete and exclusive statement of the transactions  evidenced by
this  Agreement.   All  prior  or  contemporaneous   promises,   agreements  and
understandings,  whether oral or written,  are deemed to be  superceded  by this



                                      -66-
<PAGE>



Agreement,  and no party is relying on any promise,  agreement or  understanding
not set forth in this Agreement.

        12.4  Waivers,  Extensions  and Releases.  Except as otherwise  provided
herein,  Agent may, unless otherwise directed by the Requisite  Lenders,  at any
time and from  time to time  waive any one or more of the  conditions  contained
herein or in any of the other Loan  Documents,  or extend the time of payment of
the Loan,  or release  portions of the  Collateral  from the  provisions of this
Agreement  and from the Security  Documents,  but any such waiver,  extension or
release shall be deemed to be made in pursuance and not in modification  hereof,
and any such waiver in any instance, or under any particular  circumstance shall
not be considered a waiver of such  condition in any other instance or any other
circumstance.

        12.5  Governing  Law;  Consent to  Jurisdiction;  Mutual  Waiver of Jury
Trial.

                12.5.1  Substantial  Relationship.  It is understood  and agreed
        that all of the Loan Documents were  negotiated,  executed and delivered
        in the  Commonwealth of  Massachusetts,  which  Commonwealth the parties
        agree  has  a  substantial  relationship  to  the  parties  and  to  the
        underlying transactions embodied by the Loan Documents.

                12.5.2 Place of Delivery. Borrowers agree to furnish to Agent at
        the Agent's  office in Boston,  Massachusetts  all further  instruments,
        certifications and documents to be furnished hereunder.

                12.5.3  Governing Law. This Agreement and each of the other Loan
        Documents  shall in all  respects be  governed,  construed,  applied and
        enforced in  accordance  with the internal laws of the  Commonwealth  of
        Massachusetts without regard to principles of conflicts of law.

        12.6 Consent to Jurisdiction.  THE BORROWERS AGREE THAT ANY SUIT FOR THE
ENFORCEMENT  OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE  COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND  CONSENTS  TO THE  NONEXCLUSIVE  JURISDICTION  OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 12.1. THE BORROWERS HEREBY WAIVE ANY OBJECTION THAT
THEY MAY NOW OR  HEREAFTER  HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT
OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

        12.7 JURY TRIAL WAIVER.  BORROWERS,  AGENT AND LENDERS (BY ACCEPTANCE OF
THIS AGREEMENT)  MUTUALLY HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,  ARISING
OUT OF, UNDER OR IN CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED  TO BE EXECUTED IN CONNECTION  HEREWITH,  OR ANY COURSE OF CONDUCT,
COURSE OF  DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF AGENT OR ANY LENDER RELATING TO THE



                                      -67-
<PAGE>



ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS,  AND AGREE THAT
NEITHER PARTY WILL SEEK TO CONSOLIDATE  ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN  WAIVED.  EXCEPT AS  PROHIBITED  BY
LAW,  BORROWERS  HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION  ANY SPECIAL,  EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  EACH BORROWER  CERTIFIES
THAT  NO  REPRESENTATIVE,   AGENT  OR  ATTORNEY  OF  AGENT  OR  ANY  LENDER  HAS
REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE
EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER.  THIS  WAIVER
CONSTITUTES A MATERIAL  INDUCEMENT FOR LENDERS TO ACCEPT THIS AGREEMENT AND MAKE
THE LOAN.

        12.8 Survival. All representations, warranties, covenants and agreements
of  Borrowers  herein  or  in  any  other  Loan  Document,  or  in  any  notice,
certificate,  or other paper  delivered  by or on behalf of  Borrowers  pursuant
hereto are significant and shall be deemed to have been relied upon by Agent and
each of the Lenders  notwithstanding  any investigation made by Agent or each of
the  Lenders  or on its  behalf  and  shall  survive  the  delivery  of the Loan
Documents  and the  making of the Loan and each  advance  pursuant  thereto.  No
review or approval by Agent or the Lenders,  or by any of their  consultants  or
representatives,  of any opinion letters, certificates by professionals or other
item  of any  nature  shall  relieve  Borrowers  or  anyone  else  of any of the
obligations,  warranties  or  representations  made by or on behalf of Borrowers
under any one or more of the Loan Documents.

        12.9 Cumulative  Rights.  All of the rights of the Agent and the Lenders
hereunder and under each of the other Loan Documents and any other agreement now
or hereafter executed in connection  herewith or therewith,  shall be cumulative
and may be exercised  singly,  together,  or in such  combination  as Lender may
determine in its sole good faith judgment.

        12.10 Claims Against Agent or Lenders.

                12.10.1 Borrowers Must Notify. The Agent and each of the Lenders
        shall not be in default  under this  Agreement,  or under any other Loan
        Document,  unless a written notice specifically  setting forth the claim
        of  Borrowers  shall  have been  given to Agent and each of the  Lenders
        within thirty (30) days after  Borrowers  first had actual  knowledge or
        actual  notice of the  occurrence of the event which  Borrowers  alleges
        gave rise to such  claim and the Agent or such  Lender,  as the case may
        be,  does  not  remedy  or cure  the  default,  if any  there  be,  with
        reasonable promptness thereafter. Such actual knowledge or actual notice
        shall refer to what was  actually  known by, or  expressed  in a written
        notification furnished to any Authorized Representative.

                12.10.2  Remedies.  If it is  determined by the final order of a
        court of competent jurisdiction, which is not subject to further appeal,
        that Agent or any of the Lenders  has  breached  any of its  obligations
        under the Loan  Documents  and has not  remedied  or cured the same with
        reasonable promptness following notice thereof,  Agent's and each of the
        Lender's  responsibilities  shall be  limited  to:  (i) where the breach
        consists of the failure to grant  consent or give  approval in violation
        of the terms and  requirements  of a Loan  Document,  the  obligation to
        grant  such  consent  or  give  such  approval  and  to



                                      -68-
<PAGE>



        pay  Borrowers'   reasonable  costs  and  expenses  including,   without
        limitation,  reasonable  attorneys' fees and disbursements in connection
        with such court  proceedings;  and (ii) the case of any such  failure to
        grant such  consent or give such  approval,  or in the case of any other
        such  default  by  Agent  or any of the  Lenders,  where  it is  also so
        determined  that Agent or any of the  Lenders  acted in bad  faith,  the
        payment  of  any  actual,  direct,  compensatory  damages  sustained  by
        Borrowers  as a result  thereof  plus  Borrowers'  reasonable  costs and
        expenses, including, without limitation,  reasonable attorneys' fees and
        disbursements in connection with such court proceedings.

                12.10.3 Limitations.  In no event, however,  shall Agent and any
        of the Lenders be liable to Borrowers  or anyone else for other  damages
        such as, but not limited to,  indirect,  speculative or punitive damages
        whatever  the nature of the breach by Agent or any of the Lenders of its
        obligations  under  this Loan  Agreement  or under any of the other Loan
        Documents.  In no event  shall  Agent or any of the Lenders be liable to
        Borrowers or anyone else unless a written  notice  specifically  setting
        forth the claim of Borrowers  shall have been given to Agent and each of
        the Lenders within the time period specified above.

        12.11  Obligations   Absolute.   Except  to  the  extent  prohibited  by
applicable law which cannot be waived,  the  Obligations of Borrowers  under the
Loan Documents  shall be absolute,  unconditional  and  irrevocable and shall be
paid  strictly  in  accordance  with the terms of the Loan  Documents  under all
circumstances whatsoever,  including,  without limitation,  the existence of any
claim,  set off,  defense or other  right which  Borrowers  may have at any time
against Agent or any of the Lenders  whether in connection  with the Loan or any
unrelated transaction.

        12.12 Counterparts. This Loan Agreement and each other Loan Document may
be executed in several  counterparts,  each of which when executed and delivered
is an original,  but all of which together shall  constitute one instrument.  In
making proof of this agreement,  it shall not be necessary to produce or account
for more than one such  counterpart  which is executed by the party against whom
enforcement of such loan agreement is sought.



        12.13 Time Of the Essence.  Time is of the essence of each  provision of
this Agreement and each other Loan Document.

        12.14 No Oral  Change.  This Loan  Agreement  and each of the other Loan
Documents may only be amended,  terminated,  extended or otherwise modified by a
writing signed by the party against which  enforcement is sought (except no such
writing shall be required for any party which,  pursuant to a specific provision
of any Loan  Document,  is required to be bound by changes  without such party's
assent). In no event shall any oral agreements,  promises,  actions,  inactions,
knowledge,  course of conduct,  course of dealings or the like be  effective  to
amend,  terminate,  extend or otherwise modify this Loan Agreement or any of the
other Loan Documents.

        12.15  Monthly  Statements.  While  Agent  may issue  invoices  or other
statements  on a monthly or  periodic  basis (a  "Statement"),  it is  expressly
acknowledged and agreed that: (i) the failure of Agent to issue any Statement on
one or more occasions shall not affect  Borrowers'  obligations to make



                                      -69-
<PAGE>



payments  under the Loan  Documents as and when due; (ii) the  inaccuracy of any
Statement  shall not be binding  upon the Agent or the Lenders and so  Borrowers
shall always remain obligated to pay the full amount(s)  required under the Loan
Documents  as and  when  due  notwithstanding  any  provision  to  the  contrary
contained in any  Statement;  (iii) all  Statements  are issued for  information
purposes  only  and  shall  never  constitute  any  type of  offer,  acceptance,
modification,  or waiver of the Loan Documents or any of the Agent's or Lenders'
rights or remedies thereunder; and (iv) in no event shall any Statement serve as
the basis for, or a component of, any course of dealing,  course of conduct,  or
trade  practice  which would  modify,  alter,  or  otherwise  affect the express
written terms of the Loan Documents.


      [remainder of page left intentionally blank; signatures on next page]



                                      -70-
<PAGE>



        IN WITNESS  WHEREOF this  Agreement has been duly executed and delivered
as a sealed  instrument  at Boston,  Massachusetts  this _____ day of  December,
2001.

        BORROWERS:                          PW FUNDING INC.


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            CAMBRIDGE HEALTHCARE FUNDING INC.


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            LARSON FINANCIAL RESOURCES, INC.

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

        AGENT:                              FLEET NATIONAL BANK

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


        LENDER:                             FLEET NATIONAL BANK

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________






                                      S-71
<PAGE>




                             EXHIBITS AND SCHEDULES:


                                                                        Section
                                                                      Reference
                                                                         Number
                                                                         ------

Exhibit A         -      Definitions                                      1.1

Exhibit B         -      Procedures and Documentation for Warehousing
                         Advances                                         2.3.2

Exhibit C         -      Form of Request for Warehousing Advances         2.3.2

Exhibit D         -      Guaranty of Other Borrowers' Obligations         2.1

Exhibit E         -      Eligible Loans and Other Assets                  2.1.3

Exhibit F         -      Form of Assignment and Acceptance Agreement      11.3.1

Exhibit G         -      Form of Lenders' Notes

Exhibit H         -      Form of Compliance Certificate


Schedule 1        -      Lenders and Commitments

Schedule 4        -      Authorized Representatives                        4

Schedule 6.7.2    -      Ownership, Subsidiaries and Taxpayer
                         Identification Numbers

Schedule 6.14     -      Transactions with Affiliates

Schedule 6.20     -      Servicing Portfolio

Schedule 6.22     -      Assumed Names

Schedule 7.7      -      Insurance

Schedule 7.12     -      Existing Loan Arrangements

Schedule 7.14.1   -      Permitted Existing Indebtedness

Schedule 7.14.2   -      Permitted Existing Liens




                                      S-72
<PAGE>



                           EXHIBIT A TO LOAN AGREEMENT
                           ---------------------------

                                   DEFINITIONS
                                   -----------


Accounts has the meaning given that term in the UCC.

Acquisition  Facility means that certain revolving  acquisition facility of even
date herewith by and among Charter Mac  Corporation,  the Agent,  Fleet National
Bank as a lender, and such other Persons which may become party thereto,  as the
same may be modified, amended or restated from time to time.

Adjusted  EBITDA  means,  with  respect to any fiscal  period of  Borrowers,  on
consolidated basis (among themselves),  (i) the Net Income, plus (ii) the amount
of income tax expense deducted in calculating net income for that period,  minus
(iii) the amount of income taxes  actually  paid during that  period,  plus (iv)
depreciation,  amortization and other non-cash items deducted in calculating Net
Income for that period,  minus (v) non-cash  revenue included in calculating net
income for that period,  plus (vi) the amount of interest  expense  payable with
respect Indebtedness (including,  without limitation,  the Loan) and deducted in
calculating net income for that period.  All  intercompany  (among the Borrowers
and Charter Mac Corporation) transactions and allocations shall be eliminated in
computing Borrowers' EBITDA for any period.

Adjusted LIBO Rate means for each Interest Period the rate per annum obtained by
dividing (i) LIBO for such Interest  Period,  by (ii) a percentage  equal to one
hundred percent (100%) minus the maximum reserve  percentage  applicable  during
such Interest Period under regulations  issued from time to time by the Board of
Governors of the Federal  Reserve  System for  determining  the maximum  reserve
requirements (including,  without limitation, any basic, supplemental,  marginal
and emergency reserve  requirements) for Agent (or of any subsequent holder of a
Note  hereunder  which is subject to such  reserve  requirements)  in respect of
liabilities or assets  consisting of or including  Eurocurrency  liabilities (as
such term is defined in  Regulation  D of the Board of  Governors of the Federal
Reserve System) having a term equal to the Interest Period.

Adjusted  Tangible Net Worth means  Tangible Net Worth,  less any assets (to the
extent not  otherwise  excluded)  as would be  excluded  by HUD,  Fannie Mae, or
Freddie  Mac  in  calculating  adjusted  net  worth  in  accordance  with  their
respective requirements,  and valuing Servicing Rights at the lower of GAAP book
value or Appraised Value at such time.

Advance Rate means,  as to any type of Eligible  Loan, the advance rate therefor
specified in Exhibit E.

Affiliate  means,  for any  Person,  any other  Person  directly  or  indirectly
controlling,  controlled by, or under common control with, that Person.  For the
purposes of this definition,  "control"  (including,  with correlative meanings,
the terms  "controlling,"  "controlled by," and "under common control with"), as
applied to any Person,  means the  possession,  directly or  indirectly,  of the
power to direct or cause the  direction of the  management  and policies of that
Person,  whether through the ownership of, voting  securities,  by contract.  or
otherwise.




                                      A-73
<PAGE>

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

Agent means Fleet National Bank, acting as agent for the Lenders.

Agreement means this Mortgage  Warehousing Credit and Security Agreement,  as it
hereafter may be amended, modified, supplemented, or restated from time to time.

Agreement Date means the date as of which this Agreement is dated.

Appraised  Value  means,  as  to  any  Servicing  Rights,  as  of  any  date  of
determination,  the market value of such  Servicing  Rights as shown on the most
recent appraisal  required to be delivered pursuant to Section 7.23.2 hereof (or
any  interim or updated  appraisal  prepared  by an  Approved  Servicing  Rights
Appraiser) and applied to the then outstanding  principal balance of the subject
Serviced Loans.

Approved  Servicing  Rights  Appraiser  means The  Prestwick  Mortgage  Group or
another  independent  third party  proposed by the  Borrower and approved by the
Agent, in its discretion.

Appraised Property Value means with respect to an interest in real property, the
then current fair market value of the real property and any  improvements  on it
as of  recent  date  determined  in  accordance  with  Title XI of  FIRREA  by a
qualified  appraiser  who is a member of the  American  Institute of Real Estate
Appraisers or other group of professional appraisers.

Approved  Custodian  means a pool  custodian  or other  Person  that Agent deems
acceptable,  in its sole  discretion,  to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.

Assigned Collateral  Documents means the assignment of the Collateral  Documents
to the Agent for the  ratable  benefit of the Lenders  which are  required to be
delivered  to the Agent  pursuant to the terms  hereof in  connection  with each
Warehousing Advance.

Authorized Representatives as defined in Section 4 and listed on Schedule 4.

Business Day means any day of the year on which  offices of Fleet  National Bank
are not  required  or  authorized  by law to be closed for  business  in Boston,
Massachusetts.  If any day on which a payment is due is not a Business Day, then
the  payment  shall be due on the next day  following  which is a Business  Day.
Further,  if there is no  corresponding  day for a payment in the given calendar
month (i.e.,  there is no "February 30th"), the payment shall be due on the last
Business Day of the calendar month.

Cash Collateral  Account means a demand deposit account maintained at the Agent,
in the Agent's name (as Agent for the Lenders) and designated for receipt of the
proceeds of the sale or other disposition of Collateral.



                                      A-74
<PAGE>



Cash Equivalents mean (i) securities  issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided  that the full  faith and  credit of the  United  States of America is
pledged in support  thereof)  having  maturities  of not more than twelve months
from  the date of  acquisition  ("Government  Obligations"),  (ii)  U.S.  dollar
denominated  (or foreign  currency fully hedged) time deposits,  certificates of
deposit,  Eurodollar time deposits and Eurodollar certificates of deposit of (y)
any domestic  commercial bank of recognized  standing having capital and surplus
in excess of  $250,000,000  or (z) any bank whose  short-term  commercial  paper
rating from S&P is at least A-1 or the equivalent  thereof or from Moody's is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each  case  with  maturities  of not  more  than  364  days  from  the  date  of
acquisition,  (iii)  commercial paper and variable or fixed rate notes rated A-1
(or the equivalent  thereof) or better by S&P or P-1 (or the equivalent thereof)
or  better  by  Moody's  and  maturing  within  twelve  months  of the  date  of
acquisition,  (iv) repurchase agreements with a bank or trust company (including
a Lender) or a recognized securities dealer having capital and surplus in excess
of  $500,000,000  for direct  obligations  issued by or fully  guaranteed by the
United States of America,  (v)  obligations of any state of the United States or
any  political  subdivision  thereof  for  the  payment  of  the  principal  and
redemption  price of and  interest on which  there  shall have been  irrevocably
deposited Government  Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment,  (vi) auction preferred stock
rated in the highest  short-term  credit  rating  category by S&P or Moody's and
(vii) U.S. dollar  denominated  time and demand deposit accounts or money market
accounts with those domestic banks meeting the  requirements  of item (y) or (z)
of clause (ii) above and any other domestic commercial banks insured by the FDIC
with an aggregate balance not to exceed $100,000 in the aggregate at any time at
any such bank.

Closing Date  means the Agreement Date.

Collateral as defined in Section 3.1.

Collateral Documents means, with respect to each Mortgage Loan, (a) the Mortgage
Note,  the  Mortgage  and all other  documents  executed in  connection  with or
relating to the Mortgage  Loan, (b) as  applicable,  the original  lender's ALTA
Policy  of Title  Insurance  or its  equivalent,  documents  evidencing  the FHA
Commitment  to  Insure,   if  applicable,   the  appraisal,   the  environmental
assessment,   the  engineering  report,   certificates  of  casualty  or  hazard
insurance,  credit  information on the maker of the Mortgage Note, (e) any other
document  listed in Exhibit B, and (d) any other  document  that is  customarily
desired for  inspection  or transfer  incidental to the purchase of any Mortgage
Note by an Investor or that is customarily  executed by the seller of a Mortgage
Note to an Investor.

Commerce Line means Larson's  Indebtedness  in favor of Commerce Bank under that
certain Loan and Security  Agreement  dated June 6, 2000, as amended  October 5,
2000.

Commercial Mortgage Loan has the meaning set forth in Exhibit E.

Commercial Property means an improved, income-producing commercial real property
that is not a Multifamily Property or Health Care Facility.



                                      A-75
<PAGE>



Commitment  shall mean,  with  respect to each  Lender,  the amount set forth on
Schedule 1 hereto as the amount of such Lender's  commitment to make advances to
the  Borrower,  as may be amended  from time to time by the Agent as provided in
Section 10.

Committed  Purchase Price means for an Eligible Loan (a) the dollar price as set
forth in the Purchase  Commitment  or, if the price is not expressed in dollars,
the product of the Mortgage Note Amount  multiplied by the price (expressed as a
percentage) as set forth in a Purchase  Commitment for the Eligible Loan, or (b)
if the Eligible  Loan is to be used to back an Agency  Security,  product of the
Mortgage Note Amount  multiplied by the price (expressed as a percentage) as set
forth in a Purchase Commitment for the Agency Security.

Commitment  Percentage  means,  with respect to each Lender,  the percentage set
forth  on  Schedule  1  hereto  as such  Lender's  percentage  of the  aggregate
Commitments  of all of the  Lenders,  as may be amended from time to time by the
Agent as provided in Section 11.

Constituent  Documents  means,  with  respect to any  Person,  its  articles  or
certificate of  incorporation,  constitution,  bylaws,  partnership  agreements,
organizational  documents,  limited liability company agreements,  or such other
document as may govern such entity's formation or organization.

Contractual  Obligation  means,  for any Person,  any  provision of any security
issued by that Person or of any  material  indenture,  mortgage,  deed of trust,
contract, undertaking,  agreement, or other instrument to which such Person is a
party or by which it or any of its  properties is bound or to which it or any of
its properties is subject.

Debt Service  means for any fiscal period of the  Borrowers,  the sum of (i) the
expenses of the Borrowers  for such period for interest  payable with respect to
all Indebtedness  (including,  without  limitation,  under the Facility) and all
fees paid on account of or with respect  thereto,  plus (ii) principal  payments
made or required to be made on account of Indebtedness for such period,  in each
case determined in accordance with GAAP.

Debt Service  Coverage  Ratio  means,  for any fiscal  period,  the ratio of (i)
Adjusted  EBITDA for such period,  to (ii) the  aggregate  Debt Service for such
period.

Default as defined in Section 9.1.

Delinquent Lender as defined in Section 11.2.8.

Designated Loans as defined in Section 3.3.1.

Dollars (and the symbol "$") shall mean lawful money of the United States.

Eligible Assignee shall mean (a) a Lender,  (b) an Affiliate of any Lender,  and
(c) any other Person approved by the Agent.



                                      A-76
<PAGE>



Eligible  Loan  means  a  Mortgage  Loan  that   satisfies  the  conditions  and
requirements of Exhibit E and other applicable  provisions of this Agreement for
supporting a Warehousing Advance.

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

ERISA and ERISA Plan each as defined in Section 6.9.

Event of Default as defined in Section 9.1.

Facility as defined in Section 1.2.

Facility Fee as defined in Section 2.5.3.

Fair Market Value means,  at any time for an Eligible  Loan or a related  Agency
Security (if the Eligible  Loan is to be used to back an Agency  Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered  by a  Purchase  Commitment  from  Fannie  Mae or Freddie  Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase  Commitment  from an Investor,  or (b)  otherwise,  the
market price for such  Eligible  Loan or Agency  Security,  determined  by Agent
based on market data for similar  Mortgage  Loans or Agency  Securities and such
other criteria as Agent deems appropriate in its sole discretion.

Fannie Mae means the Federal National Mortgage Association, and any successor.

Fannie Mae Agreements as defined in Section 3.3.1.

Fannie Mae Reserve Account means that certain lender reserve account established
in favor of Fannie  Mae by PWF and  maintained  at State  Street  Bank and Trust
Company pursuant to that certain  Delegated  Underwriting and Servicing  Reserve
Agreement  effective  as of May 29, 1996 by and among  Fannie Mae, PWF and State
Street Bank and Trust Company, as amended and in effect.

Fannie Mae Servicing Contracts  as defined in Section 3.3.1

Fannie Mae Loan Loss Reserves  means  reserves  established  by the Borrowers to
absorb estimated future losses related to Fannie Mae DUS Mortgage Loans.

Fannie Mae DUS  Mortgage  Loans  means a  permanent  mortgage  on a  multifamily
property  originated  under Fannie Mae's  Delegated  Underwriting  and Servicing
Guide.

Federal  Funds  Rate means for any day, a  fluctuating  interest  rate per annum
equal  to  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 for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such



                                      A-77
<PAGE>



transactions  received  by  the  Agent  from  three  federal  funds  brokers  of
recognized standing selected by the Agent.

Fee Letter  means that  certain fee letter  dated on or about the date hereof by
and between the Borrowers and the Agent,  as the same may be modified or amended
from time to time.

FHA means the Federal Housing  Administration  and any successor agency or other
entity.

FHA Construction Mortgage Loan has the meaning set forth in Exhibit E.

FHA Project Mortgage Loan has the meaning set forth in Exhibit E.

First  Mortgage  means a  Mortgage  that  constitutes  a first  Lien on the real
property covered by the Mortgage.

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

Forward  Commitments  means  mortgage  loans which  Fannie Mae has  committed to
purchase in accordance with the requirements of Fannie Mae's product, subject to
satisfaction of specified underwriting conditions.

Freddie Mac means the Federal Home Loan Mortgage Corporation, and any successor.

Guarantor(s) means, singly and collectively,  each of Charter Municipal Mortgage
Acceptance  Company, a Delaware business trust, and Charter MAC Corporation,  of
which PWF is a Subsidiary.

Guaranty(ies) mean each Guarantor's Guaranty of even date herewith,  as the same
may hereafter be modified or amended.


General Intangibles has the meaning given that term in the UCC.

Generally  Accepted  Accounting  Principles  or GAAP means  principles  that are
consistent  with  the  principles   promulgated  or  adopted  by  the  Financial
Accounting Standards Board and its predecessors, as in effect from time to time.

Gestation  Agreement  means an agreement  under which Borrower agrees to sell or
finance (a) a Mortgage  Loan prior to the date of purchase by an Investor or (b)
a  Mortgage  Pool  prior to the date a  Mortgage-backed  Security  backed by the
Mortgage Pool is issued.

Ginnie Mae means the Government National Mortgage Association,  an agency of the
United States government, and any successor agency or other entity.



                                      A-78
<PAGE>



Governmental  Authority  means  any  nation  or  government,  any state or other
political subdivision thereof, and any Person exercising executive, legislative,
judicial,   regulatory,   or  administrative   functions  of  or  pertaining  to
government.
Governmental  Authorization  means any  permit,  license,  authorization,  plan,
directive,  consent  order,  or  consent  decree  of or  from  any  Governmental
Authority.

Health  Care  Facility  means a  retirement  service  center,  a board  and care
facility, an intermediate care facility, a nursing home or a hospital.

Hedging  Arrangement  means an  arrangement  designed  to protect a Person  from
fluctuations interest rates or asset values.

HUD means the  Department  of Housing and Urban  Development,  and any successor
agency or other entity.

Indebtedness means all obligations, contingent and otherwise, that in accordance
with Generally  Accepted  Accounting  Principles  should be classified  upon the
consolidated  balance  sheet of a Borrower and the  Borrower's  Subsidiaries  as
liabilities,  or to  which  reference  should  be  made  by  footnotes  thereto,
including in any event and whether or not so classified: (a) all obligations for
borrowed  money  or  other  extensions  of  credit  whether  or not  secured  or
unsecured,  absolute or contingent,  including,  without  limitation,  unmatured
reimbursement obligations with respect to letters of credit or guarantees issued
for the account of or on behalf of the Borrower and their  Subsidiaries  and all
obligations  representing  the  deferred  purchase  price of  property,  (b) all
obligations evidenced by bonds, notes,  debentures or other similar instruments;
(c) all liabilities secured by any mortgage,  pledge,  security interest,  lien,
charge,  or other  encumbrance  existing on property  owned or acquired  subject
thereto,  whether or not the liability  secured thereby shall have been assumed;
and (d) all guarantees,  endorsements and other contingent  obligations  whether
direct or indirect in respect of indebtedness of others or otherwise,  including
any obligations with respect to puts, swaps, and other similar undertakings, any
obligation  to  supply  funds to or in any  manner  to invest  in,  directly  or
indirectly,  the  debtor,  to purchase  indebtedness,  or to assure the owner of
indebtedness against loss, through an agreement to purchase goods,  supplies, or
services  for  the  purpose  of  enabling  the  debtor  to make  payment  of the
indebtedness  held by such owner or otherwise,  and the obligations to reimburse
the  issuer in respect of any  letters  of credit;  and (e) that  portion of all
obligations  arising under capital  leases that is required to be capitalized on
the  consolidated  balance sheet of the Borrowers  and their  Subsidiaries;  but
excluding, in all events obligations arising under operating leases and accounts
payable arising in the ordinary course of business.

Indemnified Party as defined in Section 7.25.

Intangible  Assets  means,  at the time of  determination,  those  assets of any
Borrower on a consolidated basis (among themselves) that in accordance with GAAP
are properly classifiable as intangible assets,  including,  but not limited to,
goodwill, franchises, licenses, patents, trademarks, trade names and copyrights.

Interest Period



                                      A-79
<PAGE>



        (A) The term "Interest Period" means with respect to each LIBOR Advance:
a period of one (1) week, one (1), two (2) or three (3) consecutive  months,  or
such  other time  period  expressed  in a number of days  which is greater  than
thirty  (30) but less than sixty (60) (any such period  being  referred to as an
"Odd Period Interest Period"),  subject to availability,  as selected, or deemed
selected,  by the Borrower at least two (2) Business Days prior to the Loan, or,
if an advance is already  outstanding,  at least two (2) Business  Days prior to
the end of the then current  Interest  Period.  Each such Interest  Period shall
commence on the Business Day so selected,  or deemed  selected,  by the Borrower
and shall end on the numerically  corresponding day in the first, third or sixth
month  thereafter,  as applicable.  Provided,  however:  (i) if there is no such
numerically  corresponding  day,  such  Interest  Period  shall  end on the last
Business Day of the applicable  month,  (ii) if the last day of such an Interest
Period would otherwise occur on a day which is not a Business Day, such Interest
Period  shall  be  extended  to the  next  succeeding  Business  Day or if  such
extension  would otherwise cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding  Business Day, and (iii) if
any Interest  Period would  otherwise end after the Maturity Date, such Interest
Period shall end on the Maturity Date.

        (B) The term "Interest  Period" shall mean with respect to each Variable
Rate Advance consecutive periods of one (1) day each.

        (C) No Interest  Period may be selected  which would end beyond the then
Maturity  Date of the  Loan  (as  actually  extended)  . If the  last  day of an
Interest Period would otherwise occur on a day which is not a Business Day, such
last day  shall be  extended  to the next  succeeding  Business  Day,  except as
provided above in clause (A) relative to a LIBOR Advance.

Investment shall mean the acquisition of any real or tangible  personal property
or of any stock or other security, any loan, advance, bank deposit, money market
fund,  contribution  to  capital,  extension  of  credit  (except  for  accounts
receivable  arising in the ordinary course of business and payable in accordance
with  customary  terms) , or  purchase  or  commitment  or option to purchase or
otherwise  acquire real estate or tangible  personal  property or stock or other
securities  of any party or any part of the business or assets  comprising  such
business, or any part thereof.

Investor  means Fannie Mae,  Freddie Mac or a  financially  responsible  private
institution  that Lender  deems  acceptable,  in its sole  discretion,  to issue
Purchase Commitments with respect to a particular category of Eligible Loans.

Late Charges as defined in Section 2.4.14.

Legal Requirements shall mean all applicable  federal,  state,  county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any  governmental  agency or  authority  having or  claiming  jurisdiction  with
respect  thereto,  including,  but not limited to, those  applicable  to zoning,
subdivision,  building,  health, fire, safety, sanitation, the protection of the
handicapped,  and  environmental  matters and shall also  include all orders and
directives  of any court,  governmental  agency or authority  having or claiming
jurisdiction with respect thereto.



                                      A-80
<PAGE>



Lenders means, on any date of determination, the financial institutions named on
Schedule ___, and, subject to the terms and conditions of this Agreement,  their
respective successors and assigns.

LIBO Rate  means,  as  applicable  to any LIBOR  Advance,  the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time  comparable  to the  Interest  Period  applicable  to such  LIBOR
Advance which appears on the Telerate page 3750 as of 11:00 a.m.  London time on
the day that is two London  Banking Days  preceding  the first day of such LIBOR
Advance;  provided,  however, if the rate described above does not appear on the
Telerate System on any applicable interest determination date, LIBO shall be the
rate (rounded upwards, if necessary,  to the nearest one hundred-thousandth of a
percentage point) , determined on the basis of the offered rates for deposits in
Dollars for a period of time  comparable  to the Interest  Period  applicable to
such LIBOR Advance which are offered by four major banks in the London interbank
market at  approximately  11:00  a.m.  London  time,  on the day that is two (2)
London Banking Days preceding the first day of such LIBOR Advance as selected by
the Agent.  The  principal  London office of each of the four major London banks
will be requested to provide a quotation of its Dollar deposit  offered rate. If
at least two (2) such  quotations  are provided,  the rate for that date will be
the  arithmetic  mean of the  quotations.  If fewer than two (2)  quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in Dollars to leading  European banks for a period of
time comparable to the Interest Period  applicable to such LIBOR Advance offered
by major banks in New York City at approximately  11:00 a.m. New York City time,
on the day that is two (2) London Banking Days preceding the first of such LIBOR
Advance. With respect to an Odd Period Interest Period, LIBO shall be determined
by the Agent,  in good faith,  using the above  methodology  as nearly as may be
practicable  in light of the actual  number of days in such Odd Period  Interest
Period.  In the event that  Lenders are unable to obtain any such  quotation  as
provided  above,  it will be deemed that LIBO pursuant to a LIBOR Advance cannot
be determined.

LIBOR Advance means any  Warehousing  Advance  outstanding  under this Agreement
which pursuant to this Agreement bears interest at the LIBOR Rate.

LIBOR Rate means the per annum  rate  equal to the  Adjusted  LIBO Rate plus 125
basis points.

Lien means any lien, mortgage, deed of trust, pledge, security interest,  charge
or  encumbrance  of any kind  (including  any  conditional  sale or other  title
retention  agreement,  any  lease in the  nature  of such an  agreement  and any
agreement to give any security interest).

Liquidation  Proceeds means amounts  received by the Agent and/or the Lenders in
the exercise of the rights and remedies under the Loan Documents.

Loan as defined in Section 2.1.1.

Loan Agreement as defined in the Preamble.

Loan Documents as defined in Section 3.8.



                                      A-81
<PAGE>



Loan-to-Value  Ratio means,  for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of  origination,  plus the Mortgage Note Amounts of all other  Mortgage
Loans secured by the related  Property,  to (b) the Appraised  Property Value of
the related Property.

London Banking Day The term "London Banking Day" means any day on which dealings
in deposits in Dollars are transacted in the London interbank market.

Longwood  Loan means the  construction  mortgage  loan  relating to the Longwood
Apartments, Cleveland, Ohio.

Maturity Date means the earlier of December 23, 2002, or the date upon which the
whole of the Commitments are terminated or the Loan is accelerated in accordance
with applicable provisions of this Agreement.

Mortgage means a mortgage or deed of trust on real property that is improved and
substantially completed.

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

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

Mortgage Note means a promissory note secured by one or more Mortgages.

Mortgage  Note  Amount  means,  as  of  any  date  of  determination,  the  then
outstanding  and unpaid  principal  amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).

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

Multifamily Property means real property that contains or that will contain more
than 4 dwelling units.

Net Income means with respect to any fiscal period,  the net income (or deficit)
of the Borrowers on consolidated basis (among themselves) after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP

Non-Agency Mortgage Loan has the meaning set forth in Exhibit E.

Notes means the promissory notes of the Borrowers,  substantially in the form of
Exhibit G hereto,  evidencing the obligation of the Borrowers to repay the Loan,
and all renewals and extensions of all or any part thereof.

Notice as defined in Section 12.1.



                                      A-82
<PAGE>

Obligations  The Facility and the Loan together  with  interest  thereon and all
other charges and amounts payable by, and all other obligations of, Borrowers to
the Agent and the Lenders,  including,  without  limitation,  whenever incurred,
direct or indirect, absolute or contingent.

Operating Account means, with respect to each Borrower, a demand deposit account
maintained at the Agent in such  Borrower's name and designated for funding that
portion of each Eligible  Loan not funded by a Warehousing  Advance made against
that Eligible  Loan and for returning any excess  payment from an Investor for a
Pledged Loan or Pledged Security.

Other  Mortgage  Loans means loan  originated  or serviced by PWF for  insurance
companies,  savings banks and other financial  institutions but excluding Fannie
Mae, Freddie Mac, and FHA loans.

Permitted  Intercompany  Subordinated Debt means indebtedness owed by PWF and/or
one or both of the PWF  Subsidiaries  to an Affiliate  (other than one another),
which  indebtedness  has a maturity date which is later than the Maturity  Date,
and  which  is  subordinate  to  the  Obligations  pursuant  to a  subordination
agreement reasonably satisfactory to the Agent.

PBGC means the Pension Benefit Guaranty  Corporation  created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

Permitted Distributions as defined in Section 7.15.2.

Permitted  Transfers  means  transfers  of the common  stock of PWF  required or
permitted  to be made by any party  under the Stock  Purchase  Agreement  or the
Pledge and Security Agreements (each as defined in the Acquisition Agreement).

Person means any individual, corporation,  partnership, trust, limited liability
company,  unincorporated  association,  business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.

Pledged Assets means, collectively, Pledged Loans, and Pledged Securities.

Pledged Hedging Account as defined in Section 3.1.9.

Pledged Hedging Agreement as defined in Section 3.1.9.

Pledged Loans has the meaning set forth in Section 3.1.2.

Pledged Securities has the meaning set forth in Section 3.1.3.

Present  Value  The term  "Present  Value"  means  the  value at the  applicable
maturity discounted to the date of prepayment using the Treasury Rate.



                                      A-83
<PAGE>



Prime  Rate The term  "Prime  Rate"  means the per  annum  rate of  interest  so
designated from time to time by Fleet National Bank as its prime rate. The Prime
Rate is a reference rate and does not  necessarily  represent the lowest or best
rate being charged to any customer.

Property  means a  Multifamily  Property  or Health  Care  Facility  securing  a
Mortgage Loan.  Property Debt Service  Coverage Ratio means,  for any Commercial
Property that secures a Commercial  Mortgage Loan pledged or to be pledged under
this  Agreement,  the ratio of (a) the  projected  net  operating  income of the
Commercial  Property to (b) projected interest expense and scheduled payments in
respect  of the  Commercial  Mortgage  Loan for the 12 months  after the date of
determination.

Purchase  Commitment  means  a  written   commitment,   in  form  and  substance
satisfactory  to Agent,  issued in favor of any  Borrower by an  Investor  under
which  that  Investor  commits to  purchase  Mortgage  Loans or  Mortgage-backed
Securities .

Receivables as defined in Section 3.1.8.

Register as defined in Section 11.3.3.

Release Amount as defined in Section 3.4.6.

Reportable Event as defined in Section 6.9.

Requisite  Lenders  as of any date,  (i) if there  are two (2) or fewer  Lenders
holding  Commitments,  Requite  Lenders shall mean all such Lenders,  or (ii) if
there are three (3) or more Lenders holding Commitments, Requisite Lenders shall
mean the Lenders  holding at least  sixty-five  percent (65%) of the outstanding
principal  amount  of the  Loans  on  such  date;  and if no such  principal  is
outstanding,  the  Lenders  whose  aggregate  Commitments  constitute  at  least
sixty-five percent (65%) of the Total Commitment.
RFC Line means  Borrowers'  existing  Revolving  Warehouse Line with Residential
Funding Corporation dated October 1, 2001.

Security Documents as defined in Section 3.8.

Second Mortgage means a Mortgage that  constitutes a second Lien on the property
covered by the Mortgage.

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

Security means

Selling Stockholders means those Persons constituting the "Stockholders" as that
term is defined in the Stock Purchase Agreement.

Serviced  Loans  means  each of those  loans  secured  by a  mortgage  lien on a
multi-family residential property, health care facility, senior citizen facility
or other  property,  with  respect to which any



                                      A-84
<PAGE>



Borrower  provides  servicing or subservicing  (but only if such subservicing is
technically  styled as subservicing  but is performed under a contract  directly
between a Borrower  and Fannie Mae,  Freddie  Mac,  GNMA or the master  services
under a private  mortgage  related  security  program)  pursuant  to a Servicing
Contract.

Servicing  Contract  means each direct  agreement  with the owner of the subject
Serviced  Loans, as it may be amended,  pursuant to which any Borrower  services
the Serviced Loans.

Servicing Portfolio means the Borrowers' right to service Serviced Loans.

Servicing Rights means all rights of any Borrower as a servicing or subservicing
(but only if such  subservicing  is technically  styled as  subservicing  but is
performed under a contract  directly  between a Borrower and Fannie Mae, Freddie
Mac,  GNMA or the master  services  under a private  mortgage  related  security
program) of Serviced Loans.

Single  Purpose  Entity  means any Person  whose  sole asset is a Property  or a
Commercial  Property  and such  other  assets  incidental  to the  ownership  or
operation of the foregoing.

Servicing  Contracts  means any Servicing  Contract  pursuant to which  Borrower
services Serviced Loans

Stock Purchase Agreement means that certain Stock Purchase Agreement dated as of
October  24,  2001,  by and  among  the  Charter  Mac  Corporation  and  the PWF
Stockholders  of PWF, as amended by a certain First  Amendment to Stock Purchase
Agreement  dated November 21, 2001,  and by a certain Second  Amendment to Stock
Purchase  Agreement  dated  December 24, 2001,  and  including all schedules and
exhibits thereto.

Subsidiary  means any  corporation,  association,  partnership,  trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly  through a Subsidiary or  Subsidiaries at least a majority (by number
of votes or controlling  interests) of the outstanding  voting interests of such
entity..

Tangible Net Worth means,  as to the  Borrowers (on a  consolidated  basis among
themselves), as of the date of determination,  the excess of such Persons' Total
Assets over Total Liabilities, plus Fannie Mae Loan Loss Reserves, to the extent
otherwise  included in  determining  "Tangible  Net  Worth,"  and any  Permitted
Intercompany  Subordinated  Debt. For purposes of  calculating  the Tangible Net
Worth  of PWF and the PWF  Subsidiaries,  advances  or  loans  to  shareholders,
directors, officers, employees or Affiliates,  investments in Affiliates, assets
pledged to secure any  liabilities  not  included  in the  Indebtedness  of such
Persons, intangible assets, those other assets that would be deemed by HUD to be
non-acceptable  in  calculating  adjusted  net  worth  in  accordance  with  its
requirements  in  effect  as of that  date,  as  those  requirements  appear  in
"Consolidated  Audit Guide for Audits of HUD  Programs,"  and other assets Agent
deems unacceptable,  in its sole discretion,  must be excluded from such Persons
Total Assets.



                                      A-85
<PAGE>



Third Party  Originated  Loan means a Mortgage Loan  originated  and funded by a
third party  (other than with funds  provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.

Total Assets means, at the time of determination, all assets of the Borrowers on
a  consolidated  basis (among  themselves)  determined in  accordance  with GAAP
applied in a manner consistent with the most recent audited financial statements
delivered pursuant to the Agreement.

Total  Commitment The sum of the  Commitments of the Lenders,  as in effect from
time to time

Total  Liabilities  means as to the  Borrowers  (on a  consolidated  basis among
themselves),  as of the date of determination,  all liabilities of the Borrowers
determined in accordance with GAAP applied in a manner  consistent with the most
recent audited financial  statements delivered pursuant to the Agreement and all
indebtedness  and contingent  obligations of Borrowers (on a consolidated  basis
among  themselves),  whether  or not so  classified,  including  all  redemption
obligations,  hedging liabilities,  and off-balance sheet financial transactions
as to which there is recourse to any Borrower.

Treasury Rate means,  as of the date of any  calculation or  determination,  the
latest published rate for United States Treasury Notes or Bills (but the rate on
Bills issued on a discounted  basis shall be converted to a bond  equivalent) as
published  weekly  in the  Federal  Reserve  Statistical  Release  H.15(519)  of
Selected Interest Rates in an amount which approximates (as determined by Agent)
the amount (i) approximately  comparable to the portion of the Loan to which the
Treasury  Rate  applies  for the  Interest  Period,  or  (ii)  in the  case of a
prepayment,  the  amount  prepaid  and with a maturity  closest to the  original
maturity of the installment which is prepaid in whole or in part.

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

UCC  means  the  Uniform  Commercial  Code  in  effect  in the  Commonwealth  of
Massachusetts, or any other applicable jurisdiction.

Variable Rate The term "Variable Rate" means a per annum rate equal at all times
to the Prime Rate plus 12.5 basis points,  with changes  therein to be effective
simultaneously with any change in the Prime Rate.

Variable  Rate Advance The term  "Variable  Rate  Advance"  means any  principal
amount  outstanding  under this Agreement which pursuant to this Agreement bears
interest at the Variable Rate.

Warehousing Advance means a disbursement by the Lenders under the Facility.

Warehousing Advance Request as defined in Section 2.3.1.

Warehousing  Collateral Value means, as of any date of  determination,  (a) with
respect to any Eligible  Loan,  the lesser of (1) the amount of the  Warehousing
Advance  permitted  against such  Eligible  Loan under Exhibit E or (2) the Fair
Market  Value  of such  Eligible  Loan;  and (b) if  Eligible  Loans  have  been



                                      A-86
<PAGE>



exchanged for Agency Securities, the lesser of (1) the amount of any Warehousing
Advances outstanding against the Eligible Loans backing the Agency Securities or
(2) the Fair Market Value of the Agency Securities.

Warehousing  Commitment  means the  obligation  of Lenders  to make  Warehousing
Advances or to the Borrowers under Section 2.1.1.

Warehouse Commitment Amount means $100,000,000.

Warehouse  Loans  means  each of (i) those  closed  loans  held by any  Borrower
secured by a mortgage lien on a multi-family  residential property,  health care
facility, senior citizen facility or other property, (ii) those pending loans as
to which (a) any Borrower has give given a commitment to lend or have  committed
to purchase at a specified interest rate other than Forward Commitments or (b) a
Freddie Mac loan  commitment  at a specified  interest rate has been executed by
Freddie Mac and the borrower.