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                                                                   EXHIBIT 10.21

                 MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT

THIS AGREEMENT entered into effective as of this day, JULY 28, 2000, by and
between DUXFORD FINANCIAL, INC., a CALIFORNIA CORPORATION with offices at 1300
DOVE STREET, SUITE 200 NEWPORT BEACH, CA 92660 (hereinafter sometimes referred
to as "Borrower') and First Tennessee Bank, 165 Madison Ave., Memphis, Tennessee
(hereinafter referred to as "Bank").

                                   WITNESSETH

WHEREAS, Borrower is engaged in the business of originating and/or acquiring
mortgage loans secured by mortgages upon improved, residential real property,
including mortgage loans insured or to be insured by the Federal Housing
Administration (FHA), loans guaranteed or to be guaranteed by the Veterans
Administration (VA) and conventional loans and

WHEREAS, Borrower desires to borrow money from Bank under the Line of Credit to
assist in funding the origination and/or acquisition of such Eligible Mortgage
Loans, granting unto the Bank a first lien security interest in (i) each such
Eligible Mortgage Loan (ii) all contract and related rights with respect to each
such Lock related thereto (iii) the proceeds from the sale of such Eligible
Mortgage Loans (iv) all deposit accounts of Borrower maintained at Bank and (v)
other collateral (collectively, "Collateral") to secure such Line of Credit, and
the Bank is willing to provide financing to assist in funding the origination
and/or acquisition of such Eligible Mortgage Loans with advances under the Line
of Credit on the security of such Collateral and

WHEREAS, this Agreement has been entered into by the parties for the purpose of
confirming the terms and conditions under which all advances under the Line of
Credit shall be made by the Bank on behalf of the Borrower to assist in funding
the origination and/or acquisition of such Eligible Mortgage Loans.

NOW, THEREFORE, the parties mutually agree as follows:

1.   DEFINITIONS

"Advance" shall mean any provision of money or credit to or for the benefit of
Borrower pursuant to this Agreement.

"Advance Amount" shall mean the lesser of:

     1.   the sum of (a) the unpaid principal balance of the Eligible Mortgage
          Loan minus (2) all amounts shown on the HUD-1 which are to be
          disbursed to, or retained by, the Borrower plus (3) all amounts shown
          on the HUD-1 to be paid by the Borrower to arms-length third parties;
          OR

     2.   the unpaid principal balance of the Eligible Mortgage Loan; OR

     3.   99% of the Purchase Price to be paid by the Qualified Investor.

"Advance Date" shall mean the date the Closing Check is presented to Bank for
payment in accordance with Section 2.3 hereof.

"Advance Documents" with respect to any funding, shall mean the documentation
described in Section 2.3.5.

"Advance Request and Supplemental Closing Instructions" shall mean that document
to be executed by Borrower and Closing Agent with respect to each Eligible
Mortgage Loan to be funded hereunder and which shall serve as a cash advance
request hereunder by Borrower, in the form of Exhibit A attached hereto, which
may be changed from time to time at the sole discretion of the Bank.

"Bailee Letter" shall mean a letter in the form of Exhibit C attached hereto
which shall be attached to the front of every Mortgage Note by the Bank and used
by the Bank and its bailees for the purposes stated therein.

"Bank" shall mean First Tennessee Bank, Memphis, Tennessee.


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"Business Day" shall mean 8:30 AM until 4:00 PM, Central Time, any Monday,
Tuesday, Wednesday, Thursday or Friday on which the Bank is open for the
transaction of business in Memphis, Tennessee. Closing Checks in the form of
checks drawn on the Warehouse Line of Credit presented for payment between 4:00
PM and 8:30 AM shall be included in the prior Business Day. Closing Checks in
the form of wire transfer requests drawn on the Warehouse Line of Credit
received by First Tennessee after 2:00 PM shall be included in the following
Business Day. All payments to the Warehouse Line of Credit received after 4:00
PM shall be included in the following Business Day.

"Closing Agent" shall mean the attorney or title company designated by the
Borrower to close the Eligible Mortgage Loan on behalf of Borrower.

"Closing Check" shall mean a check or wire transfer drawn on the Warehouse
Clearing Account and payable to the closing agent for the sole purpose of
closing or acquiring an Eligible Mortgage Loan.

"Collateral" shall mean each Mortgage Note and such other collateral as may be
pledged to Bank pursuant to this Agreement as described in section 2.8.1

"Combined Net Worth" shall mean that sum calculated as follows from borrower and
guarantor financial statements bearing the same date as each other: Borrower's
Tangible Net worth plus Guarantor(s)' Tangible Net Worth minus the sum of the
following, if included in the Guarantors Tangible Net Worth: assets held jointly
unless all owners guaranty this debt, Guarantor's equity in the Borrower,
receivables due from the Borrower, unverified and unrealized appreciation in
personal residence, equity in automobiles and other personal property, and
unsecured receivables, MINUS payables due to Borrower.

"Commitment Letter" shall mean that letter from the Bank to the Borrower which
describes the terms under which this Agreement is being entered into and which
shall be considered a part hereof, a copy of which is attached hereto as Exhibit
"F".

"Eligible Mortgage Loan" shall mean each residential loan evidenced by a
Mortgage Note, Mortgage and related documents, which has been originated or
acquired by the Borrower, and which has been, or is to be, pledged to the Bank
as Collateral for the Line of Credit, and which meets all criteria specified in
the Schedule of Eligible Mortgage Loan Criteria attached hereto as Exhibit "G",
and which may change from time to time at the sole discretion of the Bank.

"Eligible Prime Mortgage Loan" shall mean an Eligible Mortgage Loan, which
conforms, to FHA, VA, FHLMC, or FNMA guidelines. An Eligible Mortgage Loan,
which conforms to all FNMA guidelines except maximum loan size and debt ratios
shall be considered to be an Eligible Prime Mortgage Loan.

"Eligible Sub-prime Mortgage Loan" shall mean any Eligible Mortgage Loan, which
is not an Eligible Prime Mortgage Loan.

"Funding Date" shall mean the earlier of:

     1.   the date on the face of the Closing Check, which shall be equal to the
          date the proceeds from the Eligible Mortgage Loan are disbursed by the
          Closing Agent; OR

     2.   the date the Closing Check is deposited into an account of the Closing
          Agent.

"Guarantor(s)" shall mean no person or entity other than the Borrower.

"Line of Credit" or "Loan" shall mean the credit facility governed hereby.

"Liquidity" shall mean the sum of all Borrower and Guarantor assets owned and
held in cash or accounts which can be converted to cash within 30 days,
including but not limited to checking accounts, money market or savings,
certificates of deposit, and marketable securities. IRA's owned and held in
assets which can be converted to cash within 30 days will be discounted by a
factor of 40%.

"Loan Account" shall mean that account established by the Bank pursuant to
Section 2.2 hereof.


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"Lock" with respect to any Eligible Mortgage Loan shall mean the obligation of a
Qualified Investor to Purchase such Eligible Mortgage Loan upon its presentation
to the Qualified Investor by or on behalf of the Borrower, as well as the full
amount which such Qualified Investor has committed to pay for the same.

"Master Promissory Note" shall mean that note of even date herewith described in
Section 2.2, a copy of which is attached hereto as Exhibit "B", and any
extensions, modifications, and renewals thereof.

"Mortgage" shall mean or refer to the deed of trust, mortgage or other
instrument granting to the Borrower, or the holder of such deed of trust,
mortgage or instrument, a mortgage lien upon the property therein described.

"Mortgage Note Rate" shall mean the interest rate stated on each Mortgage Note.

"Mortgage Note" shall mean an original promissory note evidencing an Eligible
Mortgage Loan.

"Mortgage" shall mean that person or persons executing and delivering the
Mortgage Note and Mortgage.

"Purchase" shall mean the act of a Qualified Investor or other person or entity
providing funds and remittance advice to the Bank in accordance with the wire
transfer instructions set forth on the applicable Bailee Letter in an amount and
in a manner sufficient to cause Bank to release its security interest as
provided hereunder.

"Purchase Date" shall mean the Business Day upon which the Bank receives both 1)
the Purchase Price, plus all accrued interest and other payments, if any, due on
the Purchase of the Eligible Mortgage Loan, and 2) remittance instructions
pertaining to such purchase proceeds.

"Purchase Price" shall mean the dollar amount the Qualified Investor has
contracted or agreed to pay for the Purchase of the particular Eligible Mortgage
Loan, not including any premium or other sums allocated to or for the purchase
of servicing rights and not including any sums for any interest that has or will
have accrued on the Eligible Mortgage Loan from the date it is closed by the
Closing Agent until the date the Eligible Mortgage Loan is actually purchased by
the Qualified Investor.

"Qualified Investor" shall mean an investor listed on Exhibit E attached hereto
and approved by the Bank to Purchase Mortgage Loans.

"Tangible Net Worth" shall mean total assets minus total liabilities MINUS the
sum of: goodwill, organization costs, receivables due from parties related to
this credit, and other assets as specified by Bank as unacceptable, PLUS
payables due to parties related to this credit, all measured in accordance with
GAAP.

"Termination Date" shall mean the first to occur of (i) the maturity date stated
in the Master Promissory Note, or (ii) the occurrence of an Event of Default.

"Warehouse Clearing Account" shall mean that account at Bank on which the
Closing Checks will be drawn to fund, in whole or in part, the closing and/or
acquisition of Eligible Mortgage Loans. All financial terms used herein shall
have the meaning ascribed thereto in accordance with generally accepted
accounting principles.

2.   PLEDGED LOANS

2.1.     Maximum Line. The maximum Line of Credit under this Agreement shall not
         exceed the sum of Fifteen Million DOLLARS ($15,000,000.00). Subject to
         the foregoing, the total amount of funds to be


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         provided to the Closing Agent on Borrower's behalf to assist in funding
         the origination of an Eligible Mortgage Loan shall not exceed the
         Advance Amount, unless otherwise agreed upon by Bank in writing. Bank
         shall have no obligation to make any advance under this Line of Credit
         against the security of any residential loan, the original principal
         amount of which exceeds five hundred thousand dollars ($500,000). In no
         case shall Bank have any obligation to make any Advance under this Line
         of Credit to the extent that such action may, in the judgment of the
         Bank, violate the legal lending limits applicable to Bank imposed by
         any applicable laws, rules, regulations or interpretations thereof.
         Borrower is aware that Advances made under the Line of Credit must be
         aggregated with other loans to Borrower and certain affiliates of
         Borrower for purposes of calculating Bank's legal lending limit.
         Borrower represents and warrants to Bank that the Loans To One Borrower
         Certification submitted by it to Bank in connection with its
         application for this financing arrangement is true, complete and
         accurate in all material respects, and that Borrower does not exceed
         Bank's loan to one borrower limits.

2.2.     Loan Account. Borrower shall execute a Master Promissory Note in the
         amount of the maximum Line of Credit ($15,000,000.00) and Bank shall
         maintain a Loan Account for the Borrower, which shall be debited to the
         extent of any loans to or Advances for the account of Borrower made by
         Bank pursuant to this Agreement. Borrower's Loan Account shall be
         credited with the proceeds of the sale of Eligible Mortgage Loans to
         Qualified Investors, which are received in good funds by Bank, and with
         such other funds actually received by Bank to reduce Borrower's
         indebtedness under the Line of Credit. Bank shall render to Borrower a
         monthly statement of Borrower's Loan Account established pursuant to
         this Agreement showing all debits and credits thereto, which statement
         of account shall be considered correct and binding upon Borrower unless
         Borrower should give to Bank, within seven (7) days from receipt of
         such statement, written notice of any exceptions thereto, each of which
         exception shall be specified in such notice. It is the intention of the
         parties that Borrower's indebtedness under this Agreement shall be
         evidenced by this Agreement and the Master Promissory Note.

2.3.     Funding of Line. Bank will provide a Warehouse Clearing Account upon
         which Borrower will draw funds either by check or by wire transfer in
         an amount equal to the Advance Amount of the Eligible Mortgage Loan to
         be closed or acquired in accordance with Bank's then-current funding
         procedures, which procedures Bank may change from time to time at its
         sole discretion. Advances under the Line of Credit will be made by the
         Bank (assuming all conditions precedent thereto have been met or waived
         by the Bank) to cover the Closing Check(s) given by Borrower to close
         or acquire the applicable Eligible Mortgage Loans. The Bank will charge
         a warehouse fee of $35.00 for each Advance under the Line of Credit
         funded via check. The Bank will charge a warehouse fee of $35.00 for
         each Advance under the Line of Credit funded via wire transfer.
         However, the Bank's obligation to fund Advances under the Line of
         Credit to cover the Closing Check presented to Bank in respect to any
         Eligible Mortgage Loan is subject to satisfaction of the following
         conditions precedent:

         2.3.1.   The Borrower's maximum Line of Credit shall not be exceeded

         2.3.2.   There shall exist no condition or event constituting an Event
                  of Default as defined in Article 6 hereof or under the Master
                  Promissory Note

         2.3.3.   The warranties included in Article 3 hereof shall be true and
                  correct as though made at such time of presentment and
                  Borrower shall have performed, or caused to have been
                  performed, all of its covenants under this Agreement through
                  such time

         2.3.4.   Borrower shall have furnished the following documents to Bank
                  with respect to each Eligible Mortgage Loan to be closed and
                  funded hereunder no later than the date the Eligible Mortgage
                  Loan is scheduled to be closed or acquired:


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         2.3.4.1. A copy of the Advance Request and Supplemental Closing
                  instructions, completed in all material respects and

         2.3.4.2. Such other documentation as to any Eligible Mortgage Loan as
                  the Bank may reasonably request.

2.3.5.   Borrower shall deliver or have caused the Closing Agent to deliver to
         the Bank the following documents with respect to the Eligible Mortgage
         Loan closed and to be funded hereunder within two (2) Business Days
         following the closing of such Eligible Mortgage Loan:

         2.3.5.1. The Advance Request and Supplemental Closing Instructions on
                  the Bank's then current form, completed in all material
                  respects and manually executed by both the Borrower and the
                  Closing Agent

         2.3.5.2. An executed assignment in blank of the Mortgage, recordable
                  but unrecorded

         2.3.5.3. A copy of the Lock pertaining to each Eligible Prime Mortgage
                  Loan

         2.3.5.4. A copy of the Underwriter's approval pertaining to each
                  Eligible Sub-prime Mortgage Loan

         2.3.5.5. A copy of the HUD-1 Settlement Statement

         2.3.5.6. A Certified True Copy of the Mortgage

         2.3.5.7. The original Mortgage Note manually executed by the Mortgagor
                  under the Eligible Mortgage Loan, endorsed in blank, along
                  with all addenda, riders, powers, and/or other documents which
                  together constitute the entire negotiable Mortgage Note, plus
                  a photocopy of the original Mortgage Note along with all
                  addenda, riders, etc., and

         2.3.5.8. Such other documentation as to any Eligible Mortgage Loans as
                  the Bank may have reasonably requested in writing, including
                  any of the same as may be required by any Qualified Investor
                  or any guarantor or purchaser of such Eligible Mortgage Loans.

         All documentation shall be satisfactory in form and substance to Bank.
         All such documentation requiring the signature of the Borrower shall
         have been signed by a duly authorized officer of Borrower, and Bank
         shall be and it is hereby so authorized, to rely upon any signature on
         any such document as having been authorized. Bank may, in its sole and
         absolute discretion, agree to and make an Advance to cover the Closing
         Check presented with regard to an Eligible Mortgage Loan(s) regardless
         of whether all of the documents required by Section 2.3.5. have been
         delivered to Bank within two (2) Business Days after the Eligible
         Mortgage Loan is closed if the requirements of Sections 2.3.1. through
         2.3.4. have been met provided, however, that Bank's determination to
         waive the requirements of the delivery of the Advance Documents i6-t-he
         Bank in accordance with Section 2.3.5. and to Advance funds sufficient
         to cover the Closing Check issued to the Closing Agent in respect to
         the particular Eligible Mortgage Loan(s) shall not be deemed to be or
         construed as a waiver of such term or condition with respect to any
         other Eligible Mortgage Loan or Loans, nor shall such operate as a
         waiver of Borrower's breach of this Agreement by its failure to fulfill
         all conditions precedent. In such event, Notwithstanding Bank's
         decision to make the Advance sufficient to cover the Closing Check,
         Bank still may, in its sole and absolute discretion,


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         declare an Event of Default hereunder and take such steps or actions
         hereunder or under the Master Promissory Note as are available,
         including, but not limited to, refusing to make any further Advances
         under this Agreement and/or accelerating the maturity of the Master
         Promissory Note.

         Notwithstanding the occurrence of Termination Date, the Bank, at its
         sole and absolute discretion, may thereafter permit the Borrower to
         draw funds hereunder in accordance with the terms, conditions and
         provisions hereof. Any draws permitted by Bank after the Termination
         Date shall not constitute an extension, renewal or modification of the
         Line of Credit or the Termination Date, the waiver by Bank of any Event
         of Default, or otherwise obligate the Bank to permit subsequent draws
         hereunder.

2.4.     Additional Documentation. Borrower covenants that it will promptly
         obtain and deliver, or cause to be obtained and delivered any
         additional loan or other documentation reasonably requested by Bank,
         which is customary in the mortgage banking business in order to make
         each Eligible Mortgage Loan marketable. Upon demand by the Bank, the
         Borrower shall deliver to the Bank any and all collateral pertaining to
         each Eligible Mortgage Loan.

2.5.     Confirmation. Upon receipt of the documentation called for in
         subsection 2.3.5. above, Bank will review such documentation for
         adequacy and accuracy. In the event Bank should not receive all of the
         documentation required or requested with respect to the Eligible
         Mortgage Loan(s) within two (2) days of the Closing of the particular
         Eligible Mortgage Loan, Borrower covenants and agrees to deliver, or
         cause to be delivered, the missing or necessary documents to the Bank
         as soon as reasonably practical after receipt of notice of any document
         deficiency.

2.6.     Repayment of Line of Credit. The entire principal amount of each
         individual Advance under the Line of Credit, and all fees and interest
         accrued thereon, shall be payable, on the earlier of:

         2.6.1    FORTY-FIVE (45) DAYS from the Funding Date of the Eligible
                  Mortgage Loan, or

         2.6.2.   The Purchase Date for the Eligible Mortgage Loan(s), or

         2.6.3.   The earliest date on which the Eligible Mortgage Loan becomes
                  past due 60 days or more, or

         2.6.4.   The date the Borrower assigns, sells, transfers, conveys, or
                  commences foreclosure upon the Eligible Mortgage Loan closed
                  or acquired with respect thereto, or

         2.6.5.   Termination of this Agreement.

2.7.     Interest on Line of Credit. Borrower agrees to pay interest from the
         Funding Date to maturity of such Advance in accordance with Section
         2.6., above. The Bank's base commercial rate of interest ("Base Rate")
         is established from time to time by the Bank, each change in the Base
         Rate to become effective, without notice to the undersigned, on the
         effective date of each change in the Base Rate. Subject to the
         limitations hereinafter set forth, the disbursed and unpaid principal
         balances of the indebtedness hereby evidenced shall bear interest prior
         to maturity at a variable rate per annum ("Warehouse Rate") which
         shall, from day to day, be equal to the lesser of (a) the maximum
         effective variable contract rate of interest ("Maximum Rate") which
         Bank may from time to time lawfully charge, or (b) a rate equal to THE
         MORTGAGE NOTE RATE. However, if the Mortgage Note Rate is greater than
         the sum of the Base Rate plus two percent (2%) per annum, the Warehouse
         Rate shall be equal to the sum of the Base Rate plus two percent (2%)
         per annum, or if the Mortgage Note Rate is less than the sum of the
         Base Rate minus three percent (3%) per annum, the Warehouse Rate shall
         be equal to the sum of the Base Rate minus three percent (3%) per
         annum. It is agreed that interest on the Master Promissory Note shall
         be calculated on


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         the basis of a 365 (366 in Leap year) day year unless calculation on
         that basis would result in Bank receiving interest at a rate in excess
         of the maximum rate of interest which Bank is permitted by law to
         contract for and charge, in which case such indebtedness shall bear
         interest at such maximum rate. The indebtedness shall also bear
         interest after maturity (whether by demand, acceleration or otherwise)
         at the maximum rate of interest which Bank is permitted by law to
         contract for and charge thereon.

2.8.     Bank's Security Interest and Lien.

         2.8.1.   Grant of Security Interests. The Borrower hereby pledges,
                  assigns, conveys, mortgages, transfers and grants to Bank a
                  security interest in and to the following, and to the extent
                  the documents, instruments or other items evidencing and
                  representing the following have not been delivered to
                  Borrower, Borrower hereby covenants and agrees to deliver such
                  documents, instruments or other items (the "Collateral") to
                  Bank:

                  2.8.1.1.    The Mortgage Note for or with respect to each
                              Eligible Mortgage Loan funded in whole or in part
                              with an Advance under this Line of Credit, and all
                              of the indebtedness evidenced by such Mortgage
                              Notes

                  2.8.1.2.    Any and all contract rights of Borrower under or
                              with respect to each Lock for an Eligible Mortgage
                              Loan, including, but not limited to, the right to
                              collect and retain the proceeds from the sale of
                              any Eligible Mortgage Loan to a Qualified Investor
                              (or any other purchaser should the Qualified
                              Investor fail or refuse to Purchase the Eligible
                              Mortgage Loan), together with any guarantees,
                              security interests, escrows and deposits, if any,
                              securing payments thereof arising from or under
                              the contract and/or the Lock

                  2.8.1.3.    All of its right, title and interest in and to the
                              Mortgages and other instruments securing the
                              payment of the indebtedness evidenced by the
                              Mortgage Notes including, but not limited to, all
                              escrows included thereunder and all servicing
                              rights and proceeds from the sale of servicing
                              rights, (and Borrower hereby subrogates the Bank
                              to its position as lien holder to the end that
                              Bank may, at its election, exercise, if necessary,
                              in Borrowers name, all of the rights of the
                              beneficiary of said Mortgages and other similar
                              security instruments)

                  2.8.1.4.    All proceeds from the sale or transfer OF each
                              Eligible Mortgage Loan

                  2.8.1.5.    All deposits of Borrower (whether general or
                              special, time or demand, provisional or final, or
                              individual or joint) maintained with or at Bank or
                              any of its affiliates, custodians or designees

                  2.8.1.6.    All escrows, deposits, and other monies or
                              consideration received by or on behalf of Borrower
                              with respect to each Eligible Mortgage Loan
                              funded, in whole or in part with an Advance under
                              this Line of Credit, including, but not limited
                              to, escrows for insurance, taxes and interest and
                              payments made under the Eligible Mortgage Loan by
                              the Mortgagor

                  2.8.1.7.    All proceeds of any hazard insurance which may
                              arise from damage to or destruction of any
                              property directly or indirectly securing Borrowers
                              indebtedness which may arise under this Agreement


                  2.8.1.8.    Borrower's right, title and interest in and to any
                              private mortgage insurance in effect with respect
                              to such Eligible Mortgage Loans and the proceeds
                              thereof


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                  2.8.1.9.    Borrowers right, title and interest in and to any
                              hazard insurance, liability insurance and title
                              insurance pertaining to the residences encompassed
                              by the Eligible Mortgage Loans and proceeds
                              thereof

                  2.8.1.10.   All appraisals, surveys, insurance certificates,
                              termite reports and other loan documents
                              pertaining to the Eligible Mortgage Loans
                              delivered to the Bank.

                  2.8.1.11.   All general intangibles pertaining to the Eligible
                              Mortgage Loans delivered to the Bank

                  2.8.1.12.   All of the Borrower's ledger and account cards,
                              computer tapes, disks and printouts, and books and
                              records of Borrower; and any and all other
                              properties and assets of Borrower of whatever
                              nature, tangible or intangible, wherever located
                              and whether now or hereafter existing relating to
                              the Eligible Mortgage Loans delivered to the Bank

                  whether now existing or hereafter acquired or created, whether
                  owned beneficially or of record and whether owned
                  individually, jointly or otherwise, together with any and all
                  products and proceeds thereof, all payments and other
                  distributions with respect thereto and any and all renewals,
                  substitutions, modifications and extensions of any and all of
                  the foregoing (the "Collateral"), as security for the full and
                  timely payment and satisfaction of all of the Borrower's
                  obligations hereunder and under the Master Promissory Note, or
                  under any other note or agreement with the Bank, in all cases
                  as and when due. Items released in writing by Bank from time
                  to time from the lien of this Agreement shall no longer be
                  considered Collateral hereunder. But this assignment is made
                  for the purpose of securing an indebtedness of the Borrower to
                  the Bank, and it is a condition hereof that in the event the
                  Borrower should well and fully perform all its duties, both
                  direct and indirect, as obligor under this Agreement and the
                  Master Promissory Note heretofore executed, together with any
                  and all other obligations of Borrower, this assignment shall
                  be void. But in the event of any default by Borrower in any
                  obligation to the Bank or under any other agreement or
                  promissory note, then, and in such event, Bank shall have all
                  rights accorded Borrower under such documents, and Bank may
                  take and receive all payment under the Mortgage Note(s) and
                  other Collateral assigned hereby and any and all proceeds or
                  product thereof, and take any legal action in respect of such
                  Collateral as the Borrower might absent this assignment. This
                  assignment constitutes a pledge and creates and grants and
                  Borrower hereby creates and grants to Bank a security
                  interest, under the terms of the Uniform Commercial Code in
                  the above described Collateral and all remedies afforded by
                  the Uniform Commercial Code for default are hereby granted
                  unto the Bank. Furthermore, the pledge created hereunder may
                  be perfected by the delivery of the Mortgage Notes to a third
                  party as bailee and failure of Bank to have physical
                  possession thereof shall not in such event invalidate this
                  pledge or its perfection, if such bailee is given notice of
                  this assignment.

         2.8.2    Collateral Assignments. Notwithstanding the security interest
                  granted by Borrower to Bank in the Collateral, Borrower
                  understands and agrees that should Bank request such in
                  writing, Borrower will execute and deliver to its Closing
                  Agent(s) for subsequent delivery to Bank, a separate
                  Collateral Assignment of Notes, Deeds of Trust/Mortgages and
                  Security Agreement with respect to each Eligible Mortgage Loan
                  to be funded, in whole or in part with an Advance or Advances
                  hereunder. Borrower also will execute and deliver with this
                  Agreement a separate Collateral Assignment of Contract Rights
                  and Security Agreement with respect to each Qualified Investor
                  to which it will sell Eligible Mortgage Loans funded, in whole
                  or in part hereunder, and for each new


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                  Qualified Investor with which Borrower contracts hereafter to
                  sell Eligible Mortgage Loans to be funded, in whole or in part
                  hereunder. Notwithstanding the fact that separate instruments
                  will be used, the security interests granted herein shall be
                  in addition to the security interests granted in each such
                  document, and not in substitution or cancellation thereof, so
                  that Bank's security interest in the Collateral shall be
                  construed and expanded to the fullest extent possible.

         2.8.3.   Collateral Documentation. Borrower covenants and agrees to
                  deliver to Bank such assignments, pledges, deeds, financing
                  statements, consents, bailments, and other instruments,
                  documents and agreements as Bank or its counsel may deem
                  necessary or appropriate to evidence, confirm, effect or
                  perfect any security interest granted or required to be
                  granted under this Agreement, the Master Promissory Note, or
                  any other instrument or agreement as may be acceptable to
                  Bank, Borrower hereby irrevocably authorizes the Bank in its
                  discretion: (i) to file without the signature of the Borrower
                  any and all financing statements, modifications and
                  continuations in respect to the Collateral and the
                  transactions contemplated by this Agreement (ii) to sign any
                  such statement, modification or continuation on behalf of the
                  Borrower if the Bank deems such signature necessary or
                  desirable under applicable law and (iii) to file a carbon,
                  photographic or other reproduction of any financing statement
                  or modification if the Bank deems such filing necessary or
                  desirable under applicable law provided that so long as no
                  Event of Default is then continuing, the Bank shall accord the
                  Borrower an opportunity to review and sign any proposed
                  financing statement or modification (but not continuation),
                  with the Bank exercising its authority hereunder to sign on
                  behalf of the Borrower if the Borrower has not signed within a
                  reasonable period of time (not to exceed 30 days) and provided
                  further that the failure to send any such copy for review or
                  signature shall not affect the validity or enforceability of
                  any such signature and filing by the Bank. The Borrower shall
                  promptly reimburse the Bank for all costs and expenses
                  incurred in connection with the preparation and filing of any
                  such document, including, but not limited to, stamp taxes,
                  recording taxes, privilege taxes, and filing fees. The Bank
                  shall send a copy of any such filing to the Borrower Provided,
                  however, that the failure to send that copy shall not affect
                  the validity or enforceability of any such filing. The Bank
                  shall not be liable for any mistake in or failure to file any
                  financing statement, modification or continuation.

         2.8.4.   Right of Setoff. Borrower acknowledges that in addition to the
                  Collateral which Borrower has pledged to Bank to secure its
                  obligations to the Bank pursuant to this Agreement, and any
                  other borrowings, Bank shall have such other or additional
                  liens and rights as may be available, including, but not
                  limited to, the right of setoff against all of Borrower's
                  right, title and interest in and to the balance of every
                  deposit account of Borrower at Bank, now or at anytime
                  hereafter existing. Bank shall have a right to offset any
                  amounts owed by the Borrower under this Agreement and/or the
                  Master Promissory Note against amounts held in every deposit
                  account of the Borrower at the Bank. Borrower acknowledges and
                  agrees that in addition to such other rights as Bank may have,
                  and not by way of limitation, should Bank in good faith ever
                  deem itself to be insecure at any time in relation to any
                  obligations of Borrower to Bank, whether arising in connection
                  with this Agreement or otherwise, any and all obligations and
                  liabilities of Borrower to Bank shall become due and payable
                  forthwith without notice or demand and Borrower hereby
                  expressly authorizes Bank to apply any balance of deposits and
                  any sums credited by or due from Bank to Borrower in general
                  account or otherwise, to the payment of any and all
                  obligations and liabilities of Borrower to Bank.

         3.1.1.   Release of Security Interests and Liens, With respect to the
                  Eligible Mortgage Loans that are subject to this Agreement,
                  Bank shall, upon receipt in full of the entire Purchase


<PAGE>   10

                  Price and upon the request of Borrower, execute and promptly
                  deliver to Borrower a security release certification
                  certifying to Borrower that Bank has released its security
                  interest in and to the related Eligible Mortgage Loans and any
                  and all contract rights with respect to the related Lock.
                  Borrower acknowledges and understands, however, that any
                  release under this section is not intended to nor shall it be
                  construed as a release of any security interest Bank may have
                  in the proceeds from the sale of such Eligible Mortgage Loans,
                  or of any other security interests Bank may have pursuant
                  hereto.

3.   WARRANTIES, COVENANTS AND REPORTS OF BORROWER

3.1 Warranties and Affirmative Covenants of Borrower. While any obligation
hereunder remains unpaid, Borrower represents and warrants to, and covenants
with Bank:

         3.1.1.   Payment of Amounts Due. Borrower will pay the fees, interest
                  and principal on Advances and the debit balance, if any, of
                  Borrower's Loan Account and Master Promissory Note executed
                  pursuant hereto in accordance with the terms hereof and
                  thereof, and will observe, perform and comply with every
                  covenant, term and condition herein and therein expressed or
                  implied on the part of Borrower to be observed, performed or
                  complied with.

         3.1.2.   Corporate Existence and Business. Borrower is duly organized,
                  qualified and in good standing under the laws of the State of
                  CALIFORNIA and in those states where it does business, and
                  Borrower will maintain and preserve its corporate existence,
                  rights and franchises in full force and effect.

         3.1.3.   Authorization. The execution of this Agreement and the
                  consummation of the transactions contemplated hereby have been
                  duly authorized by all requisite corporate action and this
                  Agreement, the Master Promissory Note, and all other documents
                  to be executed by Borrower in connection herewith and
                  therewith are valid and binding obligations of the Borrower
                  enforceable against Borrower in accordance with their
                  respective terms.

         3.1.4.   Accounts and Reports. Borrower will maintain a standard system
                  of accounting in accordance with generally accepted accounting
                  principles and practices and will furnish to Bank any
                  financial reports or other information requested as normally
                  prepared by the Borrower. At reasonable times Bank may inspect
                  and copy Borrower's books and records which relate to Bank's
                  collateral.

         3.1.5.   Adverse Changes. Borrower will promptly notify Bank of any
                  material adverse change in its financial condition, of the
                  occurrence of an Event of Default hereunder, or of the filing
                  of any suit or proceeding in which an adverse decision could
                  have a material adverse effect upon it or its business.

         3.1.6.   Known Defaults. Borrower is not knowingly in default in the
                  performance of any obligations to other financial institutions
                  or to Federal, State or Municipal authorities.

         3.1.7.   Use of Proceeds. Borrower will not request an Advance under
                  the Line of Credit or otherwise use or attempt to use the
                  proceeds of any such Advance other than to fund the
                  origination or acquisition of the specific Eligible Mortgage
                  Loan for which Borrower requests funding under the Line of
                  Credit. In addition, Borrower will not use or draw a Closing
                  Check for any other purpose but to fund all or some portion of
                  the closing or acquisition of the Eligible Mortgage Loan for
                  which the documents required by Section


<PAGE>   11

                  2.3.4 have been provided to Bank, and no Closing Check shall
                  be written for an amount which exceeds the Advance Amount.

         3.1.8.   Qualified Closing Agent. Borrower will employ or engage only
                  those persons or entities as a Closing Agent for any Eligible
                  Mortgage Loan to be funded with an Advance under the Line of
                  Credit as shall not have been disapproved by Bank prior to the
                  date the Eligible Mortgage Loan is scheduled to close.
                  Borrower represents and warrants that as to each Closing Agent
                  who is an attorney, Borrower will have satisfied itself as to
                  the character, standing, integrity, and ability of such
                  Closing Agent and, at a minimum, will have in its possession
                  and insured attorney closing letter or similar certification
                  for the proposed Closing Agent issued by a reputable title
                  company. In no event, however, shall a Closing Agent be an
                  employee, director, officer, shareholder or interest holder of
                  the Borrower, or otherwise an affiliate of Borrower.

         3.1.9.   Standard Documentation. Borrower will use its best efforts to
                  ensure that the Closing Agent uses only such documentation as
                  is acceptable to FHA, VA or FNMA, or that of the Qualified
                  Investor which has issued a Lock to Purchase the Eligible
                  Mortgage Loan. In the event the Closing Agent proposes to use
                  a nonconforming document, Borrower will provide, or cause such
                  Closing Agent to provide, a copy of said documentation to Bank
                  at least ten (10) Business Days prior to the scheduled closing
                  of such Eligible Mortgage Loan. Notwithstanding the provision
                  of such nonconforming documentation to Bank, Borrower
                  represents and warrants that the use of such nonconforming
                  documentation in connection with the Eligible Mortgage Loan
                  will not violate the Lock in respect thereof, will not give
                  the Qualified Investor the right to refuse to Purchase the
                  Eligible Mortgage Loan for the Purchase Price, and will not
                  otherwise adversely affect the marketability of such Eligible
                  Mortgage Loan in the secondary mortgage market.

         3.1.10.  Possession of Eligible Mortgage Loan Documents. Prior to the
                  time Bank has received payment in full for any Advance to fund
                  a particular Eligible Mortgage Loan, Borrower will not request
                  or accept delivery of the original Mortgage Note, and if any
                  such documents are delivered to Borrower in error or
                  otherwise, Borrower will immediately notify Bank of such event
                  by telephone and cause such documents to be delivered as soon
                  as practical to Bank.

         3.1.11.  Net Worth, Liquidity, and Debt-to-Equity.

                  3.1.11.1    Borrower's Tangible Net Worth will at all times
                              remain above $1,000,000.00.

                  3.1.11.2    Combined Net Worth shall at all times meet or
                              exceed 5% of Borrower's total liabilities.

                  3.1.11.3    Combined Net Worth shall at all times meet or
                              exceed $1,000,000.00.

                  3.1.11.4    Borrower's Liquidity when combined with the
                              Liquidity of all guarantors shall at all times
                              meet or exceed 5% of the Maximum Line amount.

3.2.     Borrower's Covenants with Respect to All Mortgages. Borrower covenants
         with respect to each Eligible Mortgage Loan to be funded hereunder that
         as of the closing of each such Eligible Mortgage Loan:

         3.2.1.   Title Insurance. Such Eligible Mortgage Loan will have the
                  form of title insurance or title opinion required by FHA, VA,
                  FNMA, GNMA, FHLMC, or the Qualified Investors requirements,
                  whichever is applicable.


<PAGE>   12

         3.2.2.   Mortgages Will Comply With Locks. Such Eligible Mortgage Loan
                  will conform in all material respects with all requirements of
                  the Lock to Purchase it, and with customary standards and
                  requirements for purchase and sale by investors in the
                  secondary market.

         3.2.3.   Validity and Enforceability. To the best of Borrowers
                  knowledge, each deed of trust note or mortgage note,
                  promissory note or bond, deed of trust, mortgage and similar
                  instrument included in each Eligible Mortgage Loan shall have
                  been executed by a person legally competent to execute such
                  papers and shall be a legally valid and enforceable obligation
                  of said person. In addition each mortgage note, promissory
                  note or similar instrument will be a negotiable instrument
                  under the laws of the state having jurisdiction over such note
                  and the negotiability thereof, and the endorsement of such
                  note or instrument by Borrower, whether such endorsement
                  appears on the body of the note or is accomplished by use of
                  an allonge, is an effective endorsement of the note which does
                  not and will not adversely affect the negotiability of such
                  note or instrument.

         3.2.4.   Maintain Records of Eligible Mortgage Loans. Borrower will
                  maintain complete and accurate records and books of account
                  covering all collections, payments on and other proceeds of
                  each Eligible Mortgage Loan, and all payments from Qualified
                  Investors with respect to any such loans. Borrower will permit
                  Bank to inspect all the records and books and supporting data
                  and to make copies and extracts therefrom at its place of
                  business during ordinary business hours and upon request of
                  Bank will furnish to Bank any information with respect to any
                  Eligible Mortgage Loan.

         3.2.5.   Maintain Security Interest of Bank. Borrower will furnish to
                  Bank such documents as Bank may at any time deem necessary or
                  desirable to perfect and maintain in perfected status Bank's
                  security interest in the Collateral hereunder, to enable Bank
                  to enforce any Eligible Mortgage Loan or Lock, or to enable
                  Bank to make direct sales and transmittals of Eligible
                  Mortgage Loans to Qualified Investors, and have the proceeds
                  of such sales remitted directly to Bank.

         3.2.6.   Fidelity Bond. Borrower will maintain fidelity bond coverage
                  in an amount at least equal to $300,000 per incident with a
                  maximum $15,000 deductible, and an errors and omissions
                  insurance policy in an amount at least equal to $300,000 per
                  incident with a maximum of $15,000 deductible, in form and
                  coverage and with a company satisfactory to Bank with respect
                  to all officers, directors, agents, employees of Borrower.
                  Borrower agrees to name Bank as direct loss payee with respect
                  to both policies and/or coverages. Borrower agrees to provide
                  satisfactory evidence of in-force policies upon request,
                  including irrevocable designation of loss payee.

         3.2.7.   Cooperate with Bank. Borrower will cooperate at all times
                  through its officers, agents, employees and directors with all
                  officers, agents, employees, attorneys, audit representatives,
                  and accountants of the Bank with respect to this Agreement and
                  all actions contemplated or permitted hereunder.

         3.2.8.   Deliver Collateral. If at any time the value of the
                  Collateral, as determined by Bank with reference to objective
                  secondary market criteria such as, for example, the FHLMC
                  posted rate, securing the obligations of Borrower hereunder,
                  shall be less than the amount Advanced on such Eligible
                  Mortgage Loan, Borrower shall, upon demand of Bank, deliver to
                  Bank additional collateral or other Eligible Mortgage Loan
                  documentation or related papers as may be deemed necessary by
                  Bank to meet said requirements and secure the obligation of
                  Borrower hereunder.


<PAGE>   13

         3.2.9.   Notice of Cancellation. If any Lock, which is part of the
                  Collateral pledged to Bank is canceled, or should a Qualified
                  Investor threaten to cancel any such Lock, Borrower will
                  immediately notify Bank of such cancellation or threat in
                  writing.

3.3.     Negative Covenants of Borrower. Without the prior written consent of
         the Bank, which consent shall not be unreasonably withheld, and while
         any obligation hereunder remains unpaid

         3.3.1.   Merger, Consolidation, Sale of Assets. Borrower will not enter
                  into any merger, consolidation, share exchange or similar
                  transaction or, except in the ordinary course of business,
                  sell or transfer all or a substantial part of its assets or
                  earning power.

         3.3.2.   Change of Management. Borrower will not change its management
                  or substantially change its ownership.

         3.3.3.   Prepayment of Eligible Mortgage Loans. Borrower will not
                  permit any Mortgagor to prepay any installment of principal
                  and interest on any Eligible Mortgage Loan, unless such
                  prepayments is remitted directly to Bank to reduce Borrowers
                  indebtedness arising under this Agreement.

3.4.     Reports to be Furnished by Borrower. While any obligation hereunder
         remains unpaid, Borrower agrees to provide Bank with the following
         reports and information on the following time basis:

         3.4.1.   To be provided annually, within 90 days of the fiscal year end
                  of Borrower:
                  - Audited financial statements of Borrower prepared in
                  accordance with GAAP.

         3.4.2.   To be provided quarterly, within 45 days of the end of
                  Borrower's fiscal quarter:
                  - Unaudited financial statements of Borrower, prepared in
                  accordance with GAAP.

4.   LOCKS

Borrower agrees to have a Lock in its possession related to each Eligible Prime
Mortgage Loan to be originated or acquired hereunder, and to comply with all
Qualified Investor requirements in order to maintain each such Lock in full
force until the Purchase Date.

4.1.     Compliance with Locks. Prior to funding any Advance requested under the
         Line of Credit, Bank may require (I) evidence of a Lock with respect to
         the Eligible Mortgage Loan to be funded by such Advance, and (ii) that
         it be satisfied that Borrower can meet the requirements of each such
         Lock, and (iii) that notice has been given to the Closing Agent of
         Bank's security interest in the Collateral, and (iv) that the Eligible
         Mortgage Loans can be and will be assigned to Qualified Investors
         directly by Bank, and (v) that Bank will be entitled and able receive
         the Purchase Price therefore under each Lock,

4.2.     Sale of Eligible Mortgage Loans. With respect to each Eligible Mortgage
         Loan, Borrower agrees that:

         4.2.1.   It will cooperate with Bank to ensure that the Eligible
                  Mortgage Loan is sold to the applicable or appropriate
                  Qualified Investor within the time provided in the Lock unless
                  extended by mutual agreement of which Bank is a party.

         4.2.2.   Bank shall have the right to deliver all Eligible Mortgage
                  Loans sold to Qualified Investors and to receive the proceeds
                  from the sale thereof, and Borrower shall provide all papers,
                  documents and instruments not in the possession of Bank
                  required by the Lock, and will take all acts necessary to
                  comply with the requirements of Qualified Investor within the
                  relevant time period.


<PAGE>   14

         4.2.3.   If an Eligible Mortgage Loan is not sold within the applicable
                  time limits provided in paragraphs 1 or 2 above, the Borrower
                  shall immediately reduce its indebtedness under this Agreement
                  by the amount of the Advance to fund the closing of the
                  Eligible Mortgage Loan affected, with applicable interest
                  thereon, unless Bank, in its sole and absolute discretion,
                  should determine to allow otherwise or to, for example, enter
                  into a "workout" situation with Borrower with respect to such
                  Eligible Mortgage Loan or Loans.

5.   RESERVED

6.   EVENTS OF DEFAULT: REMEDIES

6.1.     Events of Default. Upon the occurrence of any of the following events,
         all of the Borrowers liabilities hereunder and under the Master
         Promissory Note shall, without further notice, at the sole option of
         the Bank, become immediately due without demand for payment thereof:
         (a) the failure of any obligor (which term shall include the Borrower,
         together with all endorsers, sureties and guarantors of the note) to
         perform any agreement hereunder or related to the loan evidenced by the
         Note (b) the filing of any action for the appointment of a receiver
         for, the making of a general assignment for the benefit of creditors
         by, or any other act of insolvency of any obligor, however expressed or
         indicated (c) the entry of a materially adverse judgment against any
         obligor (d) the filing of any materially adverse lien against any
         property of any obligor (e) the taking of possession of any substantial
         part of the property of any obligor at the instance of any governmental
         authority (@ the dissolution, merger, consolidation or reorganization
         or change in control of any obligor (g) the reasonable determination by
         the Bank that a material adverse change has occurred in the financial
         condition of any obligor (h) the assignment by the undersigned of any
         equity or other right in any of the Collateral to any person or entity
         other than Bank without the prior written consent of Bank (i) the Bank
         deeming itself to be insecure or 0) the failure to make any payment or
         any other default on any other indebtedness owing by the undersigned to
         Bank.

6.2.     Bank's Rights and Remedies Upon Default. Upon the occurrence of an
         Event of Default or upon default in any payment of principal or
         interest when due or at the time or on the terms provided in any
         instrument evidencing or related to any indebtedness of Borrower
         arising hereunder or in connection herewith, the indebtedness arising
         hereunder shall, at the absolute option of Bank, become immediately due
         and payable, or upon the nonperformance by Borrower or any secondarily
         liable party of any of the agreements or covenants contained herein or
         in any of the papers related to the indebtedness arising hereunder or
         in connection herewith, or in case of any depreciation in the value of
         said Collateral below the market value agreed upon, the said
         indebtedness shall at the absolute option of the Bank become
         immediately due and payable, and in any such event Bank shall have full
         power and authority at any time or times thereafter to exercise all or
         any one or more of the remedies and shall have all of the rights of a
         secured party under the Uniform Commercial Code of Tennessee (Code),
         and is hereby authorized immediately to sell the whole or any part of
         the Collateral for the indebtedness evidenced hereby and by the Master
         Promissory Note, or any substitute therefore or additions thereto, at
         any brokers' board or at public or private sale, at the sole option of
         Bank, without notice of the amounts due or claimed to be due, without
         demand for payment, without advertisement and without notice of sale,
         each and all of which is hereby expressly waived, except such notice as
         is required under said Code and to apply the net proceeds of such sale
         after deduction of all expenses for collection, sale or delivery,
         including, but not limited to, attorneys fees and expenses, to the
         payment of the indebtedness to Bank specifically secured hereby,
         returning the surplus, if any, to Borrower unless other disposition
         thereof is required by said Code. Upon any sale by virtue hereof, Bank
         may purchase, unless otherwise prohibited by said Code, the whole or
         any part of the aforesaid Collateral discharged from any statutory
         right of redemption, equity or redemption, exemption from execution, or
         similar rights all of which are hereby expressly waived and released.
         Any


<PAGE>   15

         requirement of said Code for reasonable notice shall be met, if such
         notice is mailed, postage prepaid, to Borrower at the address of
         Borrower as shown on the records of Bank at least five (5) days prior
         to the time of the sale, disposition or other event or thing giving
         rise to the requirement of notice.

6.3.     Deposits, Set-off, Etc. It is further agreed that any moneys or other
         property at any time in the possession of Bank belonging to Borrower,
         and any deposits, balance of deposits or other sums at any time
         credited by or due from Bank to Borrower, may at all times, at the
         option of Bank, be held and treated as collateral security for the
         payment of liability of Borrower to Bank as provided hereunder and
         under the terms of the Master Promissory Note, and Bank may, at its
         sole option and at any time or from time to time after default, set off
         the amount due or to become due hereon against any claim of Borrower
         against Bank. To effect these rights Borrower agrees, upon request by
         Bank, immediately to endorse, sign and execute all necessary
         instruments as Bank may request.

6.4.     Exercise of Rights and Remedies. No delay or omission to exercise any
         right, remedy or power shall impair the right, remedy or power nor
         shall be construed to be a waiver of any Event of Default or an
         acquiescence therein. No waiver of any Event of Default shall extend to
         any subsequent Event of Default.

7.   POWER OF ATTORNEY

Borrower shall execute a power of attorney substantially in the form attached as
Exhibit D.

8.   TERMINATION

This Agreement shall terminate on the Termination Date, unless terminated
earlier due to a breach by Borrower provided, however, the indebtedness arising
under this Agreement shall mature as provided in Section 2.6 hereof. Termination
of this Agreement shall not affect the rights, liabilities, and obligations of
the parties with respect to Eligible Mortgage Loans funded prior to or after
termination, or with respect to any security therefore. At the termination,
Borrower shall pay to Bank in full all obligations, which may have arisen under
this Agreement, specifically including the payment of the debit balance of the
Loan Account and the Master Promissory Note.

9.   INDEMNITY

Borrower shall indemnify Bank and hold Bank harmless against each and every
cost, loss, or expense, including court costs and attorney's fees, arising from
any failure of Borrower to comply with any governmental or regulatory
requirements in connection with any Eligible Mortgage Loan.

10.      MISCELLANEOUS

10.1.    Place of Payment of Obligations. All sums payable to Bank hereunder
         shall be paid in Memphis, Tennessee, at Bank's principal banking
         office, the address of which is set forth above, or such other place as
         Bank may designate.

10.2.    Notices. All notices, requests, consents and demands shall be in
         writing and shall be mailed by certified or registered mail, return
         receipt requested, postage prepaid, to the addresses of Borrower and
         Bank, respectively, at the addresses above set out.

10.3.    Survival of Agreements. All covenants, agreements, representations and
         warranties made herein shall survive the termination of this Agreement
         with respect to all Eligible Mortgage Loans made hereunder prior to
         such termination, until payment in full of Borrower's obligations
         hereunder and under the Master Promissory Note. All statements
         contained in any certificate or other instrument delivered by Borrower
         hereunder shall be deemed to constitute representations and warranties
         made by Borrower.


<PAGE>   16

10.4.    Parties in Interest. All covenants and agreements contained in this
         Agreement shall bind and inure to the benefit of the respective
         successors and assigns of the parties hereto.

10.5.    Entire Agreement. This Agreement embodies the entire agreement and
         understanding between the parties and supersedes all prior agreements
         and understandings relating to the subject matter hereof.

10.6.    Governing Law. This Agreement shall be deemed a contract made under the
         laws of Tennessee, and shall be construed and enforced in accordance
         with and governed by the laws of Tennessee, except with respect to the
         rate of interest on the Master Promissory Note or Loan Account, which
         shall be governed by applicable provisions of federal law.

10.7.    Counterparts. This Agreement may be executed simultaneously in several
         counterparts, all of which together shall constitute one and the same
         instrument.

10.8.    Expenses of Enforcement. Borrower agrees to pay all reasonable
         attorneys' fees, expenses and other costs and charges incurred in the
         execution of the transaction described herein, including, but not
         limited to, the documentation thereof, the collection of any
         indebtedness arising under this Agreement, the enforcement of the
         Bank's rights hereunder, the protection and preservation of any
         Collateral securing any indebtedness hereunder, the perfection of any
         security interest or lien contemplated hereby, and maintaining the
         perfected status of the same. Borrowers Loan Account may be debited by
         the amount of such expenses the payment of which shall be secured in
         the same manner as loans made hereunder.


IN WITNESS WHEREOF, the parties, through their authorized officers have executed
this Agreement effective as of the date set out above on this __________ day of
_____________, 20_____.


<PAGE>   17

First Tennessee Bank                               Duxford Financial, Inc.

By:                                                By:
    ------------------                                  ------------------------
Its: Vice President                                Its:
                                                        ------------------------


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

                                                   Guarantors:

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

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

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

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