<PAGE>
                                                        Exhibit 10.46
                              [NATIONAL CITY LOGO]

                          WAREHOUSING CREDIT AGREEMENT

                                      among

                       THE NEW YORK MORTGAGE COMPANY, LLC
                                   as Borrower
                                       and

                     STEVEN B. SCHNALL AND JOSEPH V. FIERRO
                                  as Guarantors

                                       and

                         NATIONAL CITY BANK OF KENTUCKY
                                     As Bank

                                JANUARY 25, 2002
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                     <C>                                                          <C>
ARTICLE 1               DEFINITIONS AND ACCOUNTING TERMS........................       1
            1.1         Definitions.............................................       1
            1.2         Accounting Terms........................................      11

ARTICLE 2               THE CREDIT LINE.........................................      11
            2.1         Warehouse Advances......................................      11
            2.2         Note....................................................      12
            2.3         Manner of Borrowing.....................................      12
            2.4         Records.................................................      13
            2.5         Certain Representations.................................      13
            2.6         Payment of the Note.....................................      13
            2.7         Rates of Interest.......................................      14
            (a)         Applicable Rates of Interest............................      14
            2.8         Fees....................................................      14
            2.9         Interest Payments.......................................      15
            2.10        Post-Maturity Interest..................................      15
            2.11        Computation of Interest.................................      15
            2.12        General Provisions Regarding Prepayments and Payments...      15
            2.13        Set-Off.................................................      16
            2.14        Commitments.............................................      16

ARTICLE 3               COLLATERAL SECURITY.....................................      16
            3.1         Collateral..............................................      16
            3.2         Security Agreement......................................      16
            3.3         Priority of Security Interests..........................      16
            3.4         Release of Security Interest............................      16

ARTICLE 4               CONDITIONS PRECEDENT....................................      17
            4.1         Closing; Initial Warehouse Advance......................      17
            4.2         All Warehouse Advances..................................      18

ARTICLE 5               FINANCIAL COVENANTS.....................................      19
            5.1         Borrowing Base..........................................      19
            5.2         GAAP Net Worth..........................................      19
            5.3         Leverage Ratio..........................................      19
            5.3         Leverage Ratio..........................................      19

ARTICLE 6               REPRESENTATIONS AND WARRANTIES..........................      19
            6.1         Corporate Organization and Good Standing................      19
            6.2         Qualification...........................................      19
            6.3         Power and Authority.....................................      20
            6.4         Binding Effect..........................................      20
            6.5         Financial Condition.....................................      20
            6.6         Properties..............................................      20
            6.7         Litigation..............................................      20
            6.8         Regulations U and X.....................................      21
            6.9         Investment Company Act..................................      21
            6.10        Securities Act..........................................      21
            6.11        Permits; Consents, etc..................................      21
            6.12        ERISA...................................................      21
</TABLE>

                                       i
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<TABLE>
<S>                     <C>                                                          <C>
            6.13        Affiliates..............................................      21
            6.15        Tax Returns and Payments................................      21
            6.16        Disclosure; Solvency....................................      22

ARTICLE 7               COVENANTS...............................................      22
            7.1         Affirmative Covenants...................................      22
            7.2         Negative Covenants......................................      24
            7.3         Reporting Requirements..................................      26

ARTICLE 8               EVENTS OF DEFAULT.......................................      28
            8.1         Events of Default.......................................      28
            8.2         Remedies Not Exclusive..................................      29
            8.3         Remedies Upon Event of Default..........................      29
            8.4         Performance by the Bank.................................      30
            8.5         Attorneys and Accountants...............................      30

ARTICLE 9               MISCELLANEOUS...........................................      31
            9.1         Expenses................................................      31
            9.2         Non-Liability of Bank...................................      31
            9.3         Waivers, etc............................................      31
            9.4         Amendments..............................................      31
            9.5         Taxes...................................................      31
            9.6         Governing Law...........................................      31
            9.7         Section Titles..........................................      32
            9.8         Reliance by the Bank....................................      32
            9.9         Severability............................................      32
            9.10        Survival of Representations and Warranties..............      32
            9.11        Termination.............................................      32
            9.12        Counterparts; Effectiveness.............................      32
            9.13        Entire Agreement........................................      32
            9.14        Exhibits and Schedules..................................      33
            9.15        Indemnity...............................................      33
            9.16        Role of the Bank........................................      33
            9.17        Notices.................................................      33
            9.18        Assignment..............................................      34

ARTICLE 10              ASSIGNMENTS AND PARTICIPATIONS..........................      35

ARTICLE 11              WAIVER OF JURY TRIAL ...................................      35
</TABLE>


                                       ii
<PAGE>
                               LIST OF EXHIBITS TO
                          WAREHOUSING CREDIT AGREEMENT

      Exhibit A - Covenant Compliance Certificate

      Exhibit B - Warehouse Borrowing Base Formula

      Exhibit C - Warehouse Promissory Note

      Exhibit D - Pledge and Security Agreement

      Exhibit E - Request for Advance

      Exhibit F - Authorized Signer Letter

      Exhibit G - Guaranty Agreement

      Exhibit H - Form of Opinion of Borrower's Counsel

                                      iii
<PAGE>
                          WAREHOUSING CREDIT AGREEMENT

      This WAREHOUSING CREDIT AGREEMENT (this "Credit Agreement") is made and
entered into as of this 25th day of January, 2002, by and among THE NEW YORK
MORTGAGE COMPANY, LLC, a New York limited liability company with its principal
place of business located at 304 Park Avenue South, 7th Floor, New York, New
York 10010 (the "Company"), and STEVEN B. SCHNALL AND JOSEPH V. FIERRO, as
Guarantors and NATIONAL CITY BANK OF KENTUCKY, a national banking association
with a place of business located at 101 South Fifth Street, Louisville, Kentucky
40202 (the "Bank").

      WHEREAS, the Company desires to obtain from the Bank a warehouse line of
credit in the original maximum principal amount as of the date hereof of FIFTEEN
MILLION DOLLARS ($15,000,000.00) (the "Line of Credit"), subject to the terms
and conditions set forth in this Credit Agreement; and

      WHEREAS, the Bank desires to establish the Line of Credit in favor of the
Company upon the terms and conditions set forth in this Credit Agreement.

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:

                                    ARTICLE 1

                        DEFINITIONS AND ACCOUNTING TERMS

      1.1 Definitions. In addition to the definitions in the opening paragraph
of this Credit Agreement, the following terms shall have the meanings set forth
below (such meanings to be equally applicable to both the singular and plural
form of the terms defined):

            "Adjusted Tangible Net Worth" shall mean, as of any date of
determination, GAAP Net Worth minus the sum of (i) capitalized purchased
servicing rights of the Company, (ii) excess servicing fees of the Company, and
(iii) all intangible assets of the Company, plus the product of the unpaid
principal balance of those one to four family residential real estate mortgage
loans owned by the Company and included in the Company's Servicing Portfolio as
of the date of determination multiplied by one and one-quarter of one percent
(1.25%).

            "Affiliate" shall mean (i) any Person that, directly or indirectly,
is in control of, is controlled by, or is under common control with, the
Company, or (ii) any Person who is a director or officer of the Company or of
any Person described in clause (i) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, to vote ten
percent (10%) or more of the securities having ordinary voting power for the
election of directors of such Person or to direct the management or policies of
such Person, whether through the ownership of voting securities, or otherwise.

            "Aged Loan" shall mean, as of any date:


            (a) Any Loan, which is not a Wet Loan, which has been pledged as
Collateral for more than ninety (90) calendar days (calculated from the date
upon which the Warehouse Advance relating to such Loan is made hereunder); and

                                       1
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               (b) Any Wet Loan, which has been pledged as Collateral for more
than ten (10) calendar days (calculated from the date upon which the Warehouse
Advance relating to such Loan is made hereunder).

               "Alt A Loan" shall mean a Loan: (i) the entire interest of which
is owned by the Company; (ii) which is a First Mortgage Loan; (iii) which is not
an FHA or VA loan; and (iv) which conforms to the underwriting criteria of
Approved Investors for loans which are commonly referred to in the secondary
market as "Alt A" loans, as defined by the Agent; provided: (a) such Loan shall
have a FICO score equal to or in excess of the requirements of the applicable
Approved Investor, but in no event, less than 580; (b) such Loan shall not have
a combined loan-to-value ratio at origination greater than [95%;] (c) such Loan
has a face amount of less than one million dollars ($1,000,000.00); (d) such
Loan is covered by a take-out commitment from an Approved Investor; (e) such
Loan is pledged as Collateral within thirty (30) calendar days of origination,
purchase or conversion, (f) such Loan has no more than one (1)
principal/interest payment past due and (g) such Loan is not an Aged Loan.

            "Alt A Advance" shall mean a Warehouse Advance requested to fund an
Alt A Loan.

            "Alt A Advance Sublimit" shall mean an amount equal to equal to
Fifty Percent (50%) of the Total Warehouse Line Commitment so long as the Alt A
Loans for which the Advance is made have a FICO score equal to or greater than
620; provided, however, that up to Twenty Percent (20%) of the Alt A Advance
Sublimit may be used for Alt A Loans with a FICO score between 580 and 620.

            "Approved Investors" shall mean the financial institutions approved
for the shipment of Eligible Collateral by the Bank and listed on SCHEDULE 1
attached hereto and made a part hereof by this reference, which listing shall
include the address of each such Approved Investor, the name of the contact
person for such Approved Investor and the telephone number of such contact
person. The Bank may from time to time agree to add financial institutions to
the list of Approved Investors provided that a financial institution shall not
be deemed to be an Approved Investor until such time as the Bank has notified
the Company that such financial institution has been approved by the Bank. The
Bank may from time to time remove any financial institution from the list set
forth in SCHEDULE 1 for cause by giving the Company prior written notice of such
removal; provided, however, the Bank agrees to honor any commitments for
delivery of Loans for purchase by any removed investor if such commitment was
entered into prior to the Company's receipt of the related removal notification.
From and after the Company's receipt of written notice removing an investor from
the Approved Investor List, the Company shall not enter into any additional
commitments for delivery of Loans for purchase by that investor.

            "Average Monthly Available Deposits" shall mean the monthly average
of free collected balances maintained in non-interest bearing accounts in the
name the Company (or held by the Company in trust for third parties) with a
Bank, after deducting any unpaid service charges or float required by such Bank
under its normal practices to compensate such Bank for the maintenance of such
accounts and taking into consideration reserve requirements and the other costs
of complying with applicable law (including but not limited to any FDIC premium
applicable to such accounts).

            "Bank's Main Office" shall mean those offices of the Bank located at
101 South Fifth Street, Louisville, Kentucky.

            "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy" as now and hereafter in effect, or any successor statute.



                                       2
<PAGE>
            "Borrowing Base" shall mean that amount which is determined
according to the borrowing base formula set forth in EXHIBIT B to this Credit
Agreement.


            "Business Day" shall mean any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the state in which the Bank
maintains its office for purposes of performing its obligations under the Credit
Agreement as set forth on the signature pages of the Credit Agreement or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close, or is a day on which the
United States Federal Reserve Bank is closed.

            "Collateral" shall mean the assets of the Company, as more
particularly described in ARTICLE 2 of the Security Agreement in which the Bank
has a Security Interest.

            "Collateral Documents" shall mean the Security Agreement and all
other agreements, instruments, documents, and other papers creating, evidencing,
or representing the Collateral or the Security Interests therein.

            "Collateral Proceeds Account" shall mean the "no access" deposit
account maintained by the Bank at the main office of the Bank in the name of the
Bank for the benefit of the Company and to which the Company shall have no
access, for the purposes of receiving the proceeds of the Collateral and other
funds as provided in this Credit Agreement and the Security Agreement.

            "Collateral Value" shall mean as of any date:

               (a) With respect to a Loan which is not a Second Mortgage Loan or
Home Equity Loan, which constitutes Eligible Collateral on such date ninety
eight percent (98%) of the least of (i) the unpaid principal balance of such
Loan; (ii) the purchase price of the takeout commitment for such Loan from an
Approved Investor or (iii) the acquisition cost of such Loan; and

               (b) With respect to a Loan which is a Second Mortgage Loan or
Home Equity Loan, which constitutes Eligible Collateral on such date ninety
seven percent (97%) of the least of (i) the unpaid principal balance of such
Loan; (ii) the purchase price of the takeout commitment for such Loan from an
Approved Investor or (iii) the acquisition cost of such Loan.

               Notwithstanding anything contained in (a) and (b) to the
contrary:

                  A. The Collateral Value of all Wet Loans shall not exceed the
            Wet Advance Sublimit;

                  B. The Collateral Value of all Conforming Loans plus the
            Collateral Value of all Government Loans shall not exceed the
            Conforming/Government Advance Sublimit;

                  C. The Collateral Value of all Alt A Loans shall not exceed
            the Alt A Advance Sublimit;

                  D. The Collateral Value of all Co-Op Loans shall not exceed
            the Co-Op Advance Sublimit;

                  E. The Collateral Value of all Second Mortgage Loans plus the
            Collateral Value of all Home Equity Loans shall not exceed the
            Second Mortgage Loan Advance Sublimit;



                                       3
<PAGE>
                  F. The Collateral Value of all Jumbo Loans shall not exceed
            the Jumbo Advance Sublimit;

                  G. The Collateral Value of all Subprime Loans shall not exceed
            the Subprime Sublimit;

                  H. Each Wet Loan in respect of which the Company shall not
            have delivered all of the Collateral Documents to the Bank within
            the number of days set forth herein after the Warehouse Advance in
            respect of such Loan is made by the Bank to the Company, shall have
            a Collateral Value of zero (0);

                  I. Each Wet Loan which the Bank determines has not been funded
            by the Company on the date the Warehouse Advance in respect of such
            Wet Loan is made by the Bank to the Company, shall have a Collateral
            Value of zero (0);

                  J. All Aged Loans shall have a Collateral Value of zero;

                  K. If the Bank shall determine that the Collateral Value
            otherwise assigned to an item of Eligible Collateral does not
            accurately reflect the value thereof, then, upon notice to the
            Company such item of Collateral,

                        (i) if it is a Loan which constitutes Eligible
                  Collateral which is not a Second Mortgage Loan or Home Equity
                  Loan, shall instead have a Collateral Value equal to ninety
                  eight percent (98%) of the market value as determined by the
                  Bank; or

                        (ii) if it is a Loan which constitutes Eligible
                  Collateral on such date which is a Second Mortgage Loan or
                  Home Equity Loan, shall instead have a Collateral Value equal
                  to ninety seven percent (97%) of the market value as
                  determined by the Bank;

                  L. Each Loan in respect of which the Company shall not have
            returned the documents released under Trust Receipt within the
            number of days required by the Security Agreement, shall have a
            Collateral Value of zero; and

                  M. The Collateral Value of all Loans which are under Trust
            Receipt in accordance with the terms of the Security Agreement shall
            not exceed, in the aggregate, One Million Dollars ($1,000,000).

            "Collections" shall mean all payments, funds or money paid by an
Obligor with respect to any liability or obligation arising under a promissory
note which evidences a Pledged Loan.

            "Commitment" shall mean a Firm Commitment or a Standby Commitment.

            "Conforming Loan" shall mean a Loan secured by a Conforming
Conventional Mortgage.

            "Conforming Conventional Mortgage" shall mean a First Mortgage
securing a Loan which is eligible for purchase by any or all of FNMA or FHLMC or
such other Approved Investors.

            "Conforming/Government Advance" shall mean a Warehouse Advance
requested by the Company to fund a Conforming Loan or Government Loan.



                                       4
<PAGE>
            "Conforming/Government Advance Sublimit" shall mean an amount equal
to one hundred percent (100%) of the Total Line Commitment.

            "Co-Op Advance" shall mean a Warehouse Advance requested to fund a
Co-Op Loan.

            "Co-Op Advance Sublimit" shall mean an amount equal to fifty percent
(50%) of the Total Line Commitment.

            "Co-Op Lease" shall mean a proprietary lease relating to the
occupancy by the lessee thereunder of a single family residential cooperative
apartment, the assignment of which secures a Co-Op Loan.

            "Co-Op Loan" shall mean a loan secured by an assignment of a Co-Op
Lease and a first lien and security interest in Co-Op Shares appurtenant to such
Co-Op Lease and which is evidenced by a negotiable promissory note executed by
each Person who is a lessee under such Co-Op Lease and owner of an interest in
such Co-Op Shares and which conforms to such additional underwriting standards
as may be in existence in the secondary market at such time as determined by
FHLMC or FNMA, as applicable.

            "Co-Op Security Agreement" shall mean, collectively, (i) the
security agreement executed by the owners of Co-Op Shares in favor of the lender
under a Co-Op Loan granting to such lender a first lien and security interest in
such Co-Op Shares, (ii) a stock power with respect to such Co-Op Shares signed
in blank, (iii) UCC-1 financing statements executed by such owners in favor of
such lender for purposes of perfecting such security interest, and (iv) an
assignment by such owners, in blank, of their interest in the Co-Op Lease to
which such Co-Op Shares are appurtenant.

            "Co-Op Shares" shall mean the shares of capital stock in a
residential cooperative housing corporation appurtenant to a Co-Op Lease issued
to the lessees under such Co-Op Lease.

            "Covenant Compliance Certificate" shall mean the certificate to be
furnished to the Bank in accordance with SECTIONS 4.2(A) AND 7.3(B) hereof and
in the form of EXHIBIT A attached to this Credit Agreement, together with a
spreadsheet or other working papers showing the calculations used to prepare
such certificate.

            "Credit Agreement" shall have the meaning assigned to that term in
the introduction of this Credit Agreement.

            "Default Rate" means, upon the occurrence and during the
continuation of any Event of Default: with respect to the then or thereafter
outstanding principal balance of the Warehouse Note, a rate per annum equal to
the sum of three percent (3.0%) per annum in excess of the rate that was in
effect under the Warehouse Note immediately prior to the occurrence of the Event
of Default.

            "Dry Loan" shall mean a Loan the Collateral Documents for which have
been delivered to the Bank.

            "Document Custodian" shall mean Bank acting as the custodian of the
Loans for purposes of facilitating the pool certification and issuance of
Mortgage-backed Securities.



                                       5
<PAGE>
            "Eligible Collateral" shall mean, collectively and as of any date,
the following:

               (a) Each Loan (i) which is a Conforming Loan, a Government Loan,
a Jumbo Loan, an Alt A Loan, a Second Mortgage Loan, a Home Equity Loan, a
Subprime Loan, or a Co-Op Loan without duplication, (ii) which constitutes
Collateral, (iii) which is not an Aged Loan, (iv) which has not been under Trust
Receipt in accordance with the terms of the Security Agreement for more than the
maximum number of days allowed under the Security Agreement, (v) which has not
been shipped to an Approved Investor for more than the maximum number of days
allowed by the Security Agreement and no purchase proceeds have been received by
the Agent, (vi) in respect of which the representations, warranties and
agreements contained in the Credit Agreement and the Security Agreement are true
and correct, and (vii) which is subject to a Firm Commitment or Standby
Commitment; and

               (b) Pledged Mortgage-backed Securities.

            "Event of Default" shall mean any of the events set forth in SECTION
8.1.

            "FDIC" shall mean the Federal Deposit Insurance Corporation.

            "FHA" shall mean the Federal Housing Administration.

            "FHLMC" shall mean the Federal Home Loan Mortgage Corporation.


            "Firm Commitment" shall mean a commitment from an Approved Investor
or security dealer satisfactory to the Bank, to purchase from the Company a Loan
or Loans or a Mortgage-backed Security or Securities under which commitment the
Company is obligated to sell such Loan, Loans, or Mortgage-backed Security or
Securities.

            "First Mortgage" shall mean a mortgage, deed of trust, or other
security deed in land and other interests in real property (including, without
limitation, leasehold interests) and the structures, improvements, fixtures, and
buildings located thereon, or in other rights and interests in real property,
which secures a Loan, and which mortgage, deed of trust, or other security deed
is subject to no prior or superior mortgage, deed of trust or other security
deed in the land and other interests in real property encumbered by such
mortgage, deed of trust, or other security deed.

            "First Mortgage Loan" shall mean a Loan secured by a First Mortgage.

            "FNMA" shall mean the Federal National Mortgage Association.

            "Funding Account" shall mean the "no access" deposit account in the
name of the Bank for the benefit of the Company and maintained by the Bank at
the main office of the Bank into which the Bank's Warehouse Advance is to be
funded.

            "GAAP" shall mean those generally accepted accounting principles set
forth in the opinions and pronouncements of the Financial Accounting Standards
Board and its predecessors and the American Institute of Certified Public
Accountants or those generally accepted principles of accounting which have
other substantial authoritative support and are applicable in the circumstances
as of the date of application, as such principles are from time to time
supplemented and amended.

            "GAAP Net Worth" shall mean, as of any date of determination, the
Company's net worth as determined in conformity with generally accepted
accounting principals consistently applied.



                                       6
<PAGE>
            "GNMA" shall mean the Government National Mortgage Association.

            "Government Loan" shall mean a Loan secured by a Government
Mortgage.

            "Government Mortgage" shall mean a First Mortgage securing a Loan
which is eligible to be (i) insured by FHA, (ii) guaranteed by VA, or (iii)
purchased by GNMA or such other investor acceptable to Bank.

            "Guarantor" shall mean either of Steven B. Schnall and Joseph V.
Fierro.


            "Guaranty" shall mean the Guaranty and Suretyship Agreement from the
Guarantors in favor of the Bank.

            "Home Equity Loan" shall mean a Loan: (i) the entire interest of
which is owned by the Company; (ii) which is secured by a First Mortgage or
Second Mortgage; and (iii) which conforms to the underwriting criteria of
Approved Investors for loans which are commonly referred to in the secondary
market as "HELOC" loans; provided: (a) such Loan shall not have a combined
loan-to-value ratio at origination greater than 100% of the Appraised Value of
the real estate securing such Loan, (b) such Loan is covered by a take-out
commitment from an Approved Investor; (c) such Loan is pledged as Collateral
within thirty (30) calendar days of origination, purchase or conversion, (f)
such Loan has no more than one (1) principal/interest payment past due and (d)
such Loan is not an Aged Loan.

            "Jumbo Advance" shall mean a Warehouse Advance requested to fund a
Jumbo Loan, which face amount shall not be in excess of One Million Dollars
($1,000,000.00).

            "Jumbo Advance Sublimit" shall mean an amount equal to Seventy Five
Percent (75%) of the Total Warehouse Line Commitment.

            "Jumbo Loan" shall mean, as applicable, either (a) a single Loan,
the amount of which exceeds FNMA or FHLMC guidelines for maximum eligible
amount, but which is not in excess of One Million Dollars ($1,000,000.00), and
the entire interest of which is owned by the Company and which is secured by a
Jumbo Mortgage covering a completed one-to-four family residential property
which is subject to a Firm Commitment or (b) two separate Loans, the aggregate
amount of which exceeds FNMA or FHLMC guidelines for maximum eligible amount,
but which Advances relating to such Loans are not in the aggregate in excess of
One Million Dollars ($1,000,000.00), and the entire interests of which are owned
by the Company and which are secured by a First Mortgage and a Second Mortgage,
respectively, each covering the same completed one-to-four family residential
property and which are each subject to a Firm Commitment, provided, in either
case, that: provided that (i) no default has occurred and is continuing on such
Loan or Loans, (ii) such Loan(s) is not an Aged Loan, (iii) such Loan(s) is
pledged as Collateral within thirty (30) calendar days of origination, purchase
or conversion, (iv) such Loan(s) has no more than one (1) principal/interest
payment past due.

            "Jumbo Mortgage" shall mean a First Mortgage securing a Loan which
meets all of the requirements of a Conforming Mortgage except that the principal
amount of such Loan exceeds the maximum amount eligible for purchase by either
FNMA or FHLMC.

            "LIBOR" shall mean the per annum rate equal to the thirty (30) day
average of the London Interbank Offered Rate, as published by Bloomberg
Financial Services or a similar service selected by the Bank during each monthly
billing cycle, or as otherwise determined in good faith by the Bank.



                                       7
<PAGE>
            "Loan" shall mean a residential real estate mortgage loan purchased,
refinanced or made by the Company, evidenced by a promissory note, and secured
by a mortgage or deed of trust or similar instrument creating an enforceable
first or second lien upon a completed one-to-four family residential property
which was financed with the proceeds of such loan.

            "Loan Documents" shall mean, collectively, the Credit Agreement, the
Warehouse Note, the Collateral Documents and any and all other documents
executed in connection therewith.

            "Maturity Date" shall mean JUNE 15, 2002; provided that the Bank
shall have the option, in its absolute discretion, either one time or from time
to time, to extend the Maturity Date for an additional period not to exceed
three hundred and sixty four (364) days. If the Maturity Date is extended, the
term Maturity Date shall mean the date of expiration of such extension.

            "Mortgage Electronic Registration Systems, Inc. ("MERS")" shall mean
the real estate finance industry's electronic registry for tracking ownership of
mortgage rights.

            "Mortgage-backed Securities" shall mean securities issued by the
Company or any Affiliate and guaranteed by GNMA or any successor, or securities
issued by FNMA, FHLMC, or any successor, which are secured by pools of
mortgages.

            "Mortgage Note" shall mean, at any time, a negotiable promissory
note executed by a competent party which either:

                  (A) (i) is secured by a Mortgage, and (ii)(a) conforms to such
            additional underwriting standards as may be in existence in the
            secondary market at such time as determined by FHLMC, FNMA, GNMA,
            FHA or VA, as applicable, or but for the original unpaid principal
            amount thereof would so conform, or (b) conforms to the standards
            and requirements of the Non-Conforming Mortgage Loan Commitment
            allocated thereto; or

                  (B) evidences a Co-Op Loan and is secured by a Co-Op Security
            Agreement.

            "Net Income" shall mean, for the period in question, the net income
(or loss) of the Company for such period taken as a single accounting period
determined in accordance with GAAP.

            "Non-Conforming Mortgage" shall mean a First Mortgage or a Second
Mortgage securing a Loan which is not eligible for purchase by FNMA or FHLMC or
any state bond/housing program or guarantee by GNMA and which is not a Jumbo
Loan.

            "Note" shall mean the Warehouse Note.

            "Obligor" shall mean a person or other entity who now or hereafter
is or becomes liable to the Company with respect to any of the Collateral.

            "Outstanding Warehouse Balance" shall mean the unpaid principal
balance of all Warehouse Advances.

            "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party, or government (whether


                                       8
<PAGE>
national, federal, state, county, city, municipal, or otherwise, and including,
without limitation, any instrumentality, division, agency, body, or department
thereof), whether acting in an individual, fiduciary, or other capacity.

            "Pledged Loan" shall mean any Loan made by the Company with respect
to which the Bank has made a Warehouse Advance, or with respect to which the
Company has requested a Warehouse Advance, or which is now or hereafter at any
time pledged, assigned, transferred, or conveyed, or a security interest therein
granted, to the Bank. If the context so requires, "Pledged Loan" shall also mean
any and all instruments and documents which evidence or relate to any such Loan.

            "Pledged Mortgage-backed Securities" shall mean Mortgage-backed
Securities with respect to which the Bank has made a Warehouse Advance, or with
respect to which the Company has requested a Warehouse Advance, or which
constitute proceeds of any Pledged Loan, or which are now or hereafter at any
time pledged, hypothecated, assigned, transferred, or conveyed, or a security
interest therein granted, to the Bank.

            "Prevailing Time" shall mean the prevailing time in Louisville,
Kentucky.

            "Prime Rate" shall mean the fluctuating rate per annum which is
publicly announced from time to time by Bank as being its so-called "prime rate"
with each change in the Prime Rate automatically, immediately and without notice
changing the rate of interest applicable to the Note. The Prime Rate is not
necessarily the lowest rate of interest then available from the Bank on
fluctuating-rate loans.

            "Request for Advance" shall mean a written request for a Warehouse
Advance by the Company substantially in the form attached hereto as EXHIBIT E.

            "Second Mortgage" shall mean a mortgage, deed of trust or other
security deed in land and other interests in real property (including, without
limitation, leasehold interests) and the structures, improvements, fixtures and
buildings located thereon, and in other rights and interests in real property
(i) which mortgage, deed of trust or other security deed is subject to only one
prior or superior mortgage, deed of trust or other security deed in the land and
other interest in real property encumbered by such mortgage, deed of trust or
other security deed, and (ii) which secures a Loan where the Loan combined with
the outstanding balance of the prior or superior mortgage, deed of trust or
other security deed does not exceed one hundred percent (100%) of the Appraised
Value of such real estate.

            "Second Mortgage Loan" shall mean a Loan made by the Company, the
entire interest of which is owned by the Company and which is secured by a
Second Mortgage.

            "Second Mortgage Loan Advance" shall mean a Warehouse Advance
requested to fund a Second Mortgage Loan or a Home Equity Loan.

            "Second Mortgage Loan Advance Sublimit" shall mean an amount equal
to Ten Percent (10%) of the Total Warehouse Line Commitment.

            "Secured Obligations" shall mean all obligations, liabilities, and
indebtedness of the Company to the Bank, due or to become due, direct or
indirect, absolute or contingent, joint or several, now existing or at any time
hereafter arising, incurred under the this Credit Agreement, the Note, any of
the other Loan Documents, any other credit agreement or note hereafter executed
and delivered by the Company in favor of the Bank, and any amendment to any of
the foregoing, or otherwise, and any amendment, renewal, or extension of any
such obligations, liabilities, and indebtedness, including without limitation
all interest, fees, charges,


                                       9
<PAGE>
expenses, and reasonable attorneys' fees, to the extent permitted by law,
incurred to enforce the Banks' rights against the Company or otherwise, or
arising out of the defense or prosecution of any matter growing out of this
Credit Agreement or any of the other documents, agreements and instruments
referred to above or any security interest granted herein.

            "Security Agreement" shall mean the Pledge and Security Agreement by
and between the Company and the Bank, in the form of EXHIBIT D to this Credit
Agreement.

            "Security Interest" shall mean every security interest, pledge,
lien, hypothecation, and other encumbrance on or in any of the assets of the
Company now or hereafter granted by the Company to the Bank whether pursuant to
this Credit Agreement, the Collateral Documents, or otherwise.

            "Servicing Portfolio" shall mean, as of any particular date, the
then aggregate unpaid principal balance of the one-to-four family residential
real estate mortgage loans which are then being serviced by the Company pursuant
to mortgage selling and servicing contracts and mortgage pool purchasing
contracts entered into with FNMA, GNMA, FHLMC, or other investors acceptable to
the Bank.

            "Standby Commitment" shall mean a commitment from an Approved
Investor or security dealer satisfactory to the Bank, to purchase from the
Company within a specified time period a Loan or Loans, or a Mortgage-backed
Security or Securities, in an aggregate principal amount which conform to the
criteria set forth therein, under which commitment the Company has the right,
but is not obligated, to sell such Loan, Loans, or Mortgage-backed Security or
Securities.

            "Sublimits" shall mean the Conforming/Government Advance Sublimit,
the Jumbo Advance Sublimit, the Alt A Advance Sublimit, the Subprime Advance
Sublimit, the Co-Op Advance Sublimit, the Second Mortgage Loan Advance Sublimit,
and the Wet Advance Sublimit.

            "Subprime Loan" shall mean one-to-four family residential first
priority mortgage loans owned by the Company that do not conform to FNMA, FHLMC
or Alt A underwriting guidelines which are originated per terms of at least two
Approved Investor takeout commitments meeting customary standards for "B" or "C"
paper, as approved by Bank; provided: (a) no default has occurred and is
continuing on such Loan, (b) such Loan has a face amount of less than two
hundred thousand dollars ($200,000); and (c) such Loan is not an Aged Loan.

            "Subprime Advance" shall mean a Warehouse Advance requested to fund
a Subprime Loan.

            "Subprime Sublimit" shall mean an amount equal to equal to Five
Percent (5%) of the Total Warehouse Line Commitment.

            "Termination Date" shall mean the earlier of (i) the Maturity Date,
or (ii) the date the Bank declares this Credit Agreement to be terminated,
pursuant to SECTION 8.3 below.

            "Total Indebtedness" shall mean, as of the date of any
determination, all indebtedness of the Company, as determined in accordance to
GAAP, including, without limitation, all unpaid Secured Obligations, all amounts
due under all capital leases, all accounts and trade payables, and all other
liabilities and obligations of the Company, but excluding all obligations of the
Company relating to its reverse repurchase facilities.

            "Total Line Commitment" shall mean the amount of FIFTEEN MILLION
DOLLARS ($15,000,000.00).



                                       10
<PAGE>
            "Trust Receipt" shall have the meaning set forth in SECTION 7(H) of
the Security Agreement.

            "Uniform Commercial Code" shall mean the Uniform Commercial Code as
adopted in the Commonwealth of Kentucky.

            "Unmatured Event of Default" shall mean any event which, with the
lapse of time, or with notice to the Company, or both, would constitute an Event
of Default.

            "VA" shall mean the Veterans Administration.

            "Warehouse Advance" shall mean the cash amount advanced under the
Warehouse Line by the Bank to or for the account of the Company under the terms
of SECTION 2.1 of this Credit Agreement.

            "Warehouse Line" shall have the meaning assigned to that term in the
Preliminary Statement of this Credit Agreement.

            "Warehouse Line Commitment" means the commitment of the Bank to
maintain or make Warehouse Advances as set forth in SECTION 2.1 hereof.

            "Warehouse Note" means that certain Warehouse Promissory Note of
even date herewith, made by the Company, payable to the order of the Bank, and
in the face principal amount of FIFTEEN MILLION DOLLARS ($15,000,000.00), a form
of which is annexed hereto as EXHIBIT C, as the same may hereafter be amended,
modified, renewed, replaced and/or restated from time to time.

            "Wet Advance" shall mean a Warehouse Advance requested by the
Company to fund a Wet Loan.

            "Wet Advance Sublimit" shall mean an amount equal to (i) forty
percent (40%) of the Total Line Commitment, during the last five (5) days of
each month and the first five (5) days of each month and (ii) thirty percent
(30%) of the Total Line Commitment at all other times.

            "Wet Loan" shall mean a Loan the entire interest of which is owned
by the Company which is secured by a Government Mortgage, Conforming
Conventional Mortgage, Non-Conforming Mortgage, Second Mortgage or Jumbo
Mortgage covering a completed one-to-four family residential property, for which
the Collateral Documents relating to such Loan have not been delivered to the
Bank and not more than ten (10) calendar days have elapsed since the day the
Warehouse Advance relating to such Loan is made by the Bank.


      1.2 Accounting Terms. All accounting terms, except as their meanings may
be modified by this Agreement, shall have the meanings given them in accordance
with GAAP.



                                    ARTICLE 2

                                 THE CREDIT LINE

      2.1 Warehouse Advances. The Bank agrees to lend to the Company, and the
Company agrees to borrow from the Bank, on the terms and conditions of this
Credit Agreement, an aggregate amount not exceeding the Bank's Warehouse Line
Commitment, subject to the Sublimits. Subject to the terms and conditions
contained herein, Warehouse Advances may be repaid and reborrowed until the
Termination Date.


                                       11
<PAGE>
The Bank's commitment to make Warehouse Advances under this SECTION 2.1 is
herein called its "Warehouse Line Commitment".

      Notwithstanding the foregoing, the Bank shall not be obligated to make a
Warehouse Advance which, (a) when added to the Outstanding Warehouse Balance
would exceed the Borrowing Base at such time; (b) when added to the sum of the
Outstanding Warehouse Balance would cause or result in a violation of the
financial covenants set forth in ARTICLE 5; (c) if the Warehouse Advance is a
Conforming/Government Loan Advance, when added to the outstanding balance of all
Conforming/Government Loan Advances would cause or result in a violation in the
Conforming/Government Loan Advance Sublimit; (d) if the Warehouse Advance is a
Co-Op Advance, when added to the outstanding balance of all Co-Op Advances would
cause or result in a violation in the Co-Op Advance Sublimit; (e) if the
Warehouse Advance is a Jumbo Advance, when added to the outstanding balance of
all Jumbo Advances would cause or result in a violation in the Jumbo Advance
Sublimit; (f) if the Warehouse Advance is a Second Mortgage Loan Advance, when
added to the outstanding balance of all Second Mortgage Loan Advances would
cause or result in a violation in the Second Mortgage Loan Advance Sublimit; (g)
if the Warehouse Advance is a Wet Advance, when added to the outstanding balance
of all Wet would cause or result in a violation in the Wet Advance Sublimit; (h)
if the Warehouse Advance is an Alt A Advance, when added to the outstanding
balance of all Alt A Advances would cause or result in a violation in the Alt A
Advance Sublimit; (i) if the Warehouse Advance is a Subprime Advance, when added
to the outstanding balance of all Subprime Advances would cause or result in a
violation in the Subprime Sublimit; or (j) if the Warehouse Advance would cause
or result in the Outstanding Warehouse Balance to exceed the Total Line
Commitment. The Bank shall not be obligated to honor any Request for Advance if
the disbursement of funds thereunder would occur on or after the Termination
Date, or if an Event of Default has occurred and has not been cured within the
specified grace period, or would cause or result in an Event of Default or an
Unmatured Event of Default.

      2.2 Note. The lending described in SECTION 2.1 above, to be made through
Warehouse Advances made by the Bank in accordance with the terms set forth
herein, shall be evidenced by the Warehouse Note of the Company substantially in
the form of EXHIBIT C to this Credit Agreement. The aggregate amount of the
Warehouse Advances made under the Warehouse Note, less repayments of principal,
shall be the principal amount owing and unpaid on the Warehouse Note. The
Warehouse Note shall be payable in the manner, and shall bear interest at the
rates specified in this Credit Agreement.

      2.3 Manner of Borrowing.

            A. Request for Advance. The Company shall deliver to the Bank, not
later than 2:00 p.m. Prevailing Time on the Business Day on which the Company
desires to obtain a Warehouse Advance an original (or facsimile copy) executed
Request for Advance (which shall be irrevocable upon Bank's transfer of funds
related to such Warehouse Advance) specifying the amount of the Warehouse
Advance which it desires to borrow. On the date of the Bank's receipt of a
Request for Advance requesting a Warehouse Advance if: (a) no Event of Default
has occurred and is then existing; (b) all terms and conditions of this Credit
Agreement required to be satisfied prior to the making of the Warehouse Advance
are in fact satisfied; (c) all terms and conditions of the Security Agreement
required to be satisfied prior to the making of a Warehouse Advance are in fact
satisfied; and (d) the making of the Warehouse Advance shall not cause or result
in either a violation of any of the terms of this Credit Agreement or of the
Security Agreement, an Event of Default, or an Unmatured Event of Default, the
Bank shall credit the amount of such Warehouse Advance to the Company according
to the terms below. Bank may, in its sole discretion, extend the deadline for
requests for advances from 2:00 p.m. to 3:00 p.m. Prevailing Time. Requests for
a Warehouse Advance received by the Bank after 3:00 p.m. Prevailing Time will
not be processed until the next Business Day.



                                       12
<PAGE>
            B. Disbursement of Warehouse Advances. Subject to the conditions
contained herein, and provided the Request for Advance is received by 2:00 p.m.
Prevailing Time, the Bank shall disburse the amount of the Warehouse Advance to
be made to the Company, in same day funds, to the Funding Account, maintained at
the Bank's Main Office not later than 3:00 p.m. Prevailing Time on the date the
Request for Advance from the Company is received by the Bank; provided, however,
with respect to each Wet Advance, the proceeds thereof shall be (a) wire
transferred by the Bank through the Federal Reserve Wire Transfer System
directly to the Company's agent responsible for closing such Wet Loan, (b)
funded by a draft on the Bank, which draft shall be made payable jointly to the
Company's agent responsible for closing such Wet Loan and the mortgagor(s) under
such Wet Loan, or (c) disbursed in such other manner as is acceptable to the
Bank.

      2.4 Records.


            A. Warehouse Advances. The Bank shall record the Warehouse Advances
of the Bank in the records of the Bank. The Bank's records maintained pursuant
to this SECTION 2.4 shall be available for inspection by the Company at any
reasonable time and from time to time upon reasonable prior notice to the Bank.

            B. Payments. The Bank shall record each repayment or prepayment in
respect of the principal amount of the Warehouse Advances in the Bank's records.
Any such recordation in accordance with the terms of this Credit Agreement shall
be conclusive and binding on the Company absent manifest error; provided, that
failure to make any such recordation, or any error in such recordation, shall
not affect the Company's obligation to repay all Warehouse Advances to the Bank
in accordance with this Credit Agreement and the Warehouse Note.

            C. Bank's Records. The Bank shall record on its internal records
each Warehouse Advance made by it to the Company and each payment in respect
thereof. Any such recordation in accordance with the terms of this Credit
Agreement shall be conclusive and binding on the Company absent manifest error;
provided, that failure to make any such recordation, or any error in such
recordation, shall not affect the Company's obligation to repay all Warehouse
Advances to the Bank in accordance with this Credit Agreement and the Warehouse
Note.

      2.5 Certain Representations. Each Request for Advance shall be deemed to
be the representation of the Company and of the officer making the request that:
(a) all conditions precedent set forth in ARTICLE 4 hereof have been satisfied;
(b) the Company is in compliance with all financial covenants set forth in
ARTICLE 5 hereof; (c) the representations and warranties contained in ARTICLE 6
hereof remain true and correct; and (d) no Event of Default and no Unmatured
Event of Default has occurred and is then existing, or will exist upon
completion of the requested Warehouse Advance.

      2.6 Payment of the Note.


            A. Termination Date. On the Termination Date, without necessity of
notice or demand, the Company shall pay to the Bank the full amount of the
outstanding principal balance of, and all accrued but unpaid interest on the
Warehouse Note.


            B. Borrowing Base Deficiency. If, at any time, and for any reason,
including without limitation a reduction in the Collateral Value or any part
thereof by virtue of a "mark to market" valuation, the outstanding warehouse
balances owed to the Bank exceeds the Borrowing Base, as determined by the Bank,
then the Company shall immediately pay to the Bank, an amount equal to the
amount by which the sum of the outstanding balances owed to the Bank exceeds the
Warehouse Borrowing Base.



                                       13
<PAGE>
            C. Proceeds of Collateral. The proceeds from the Collateral shall be
payable to the Bank for application to the Warehouse Note and other Secured
Obligations under and in accordance with the terms of the Security Agreement.


      2.7 Rates of Interest.


            A. Rates of Interest Election. The Company shall have the option,
not later than three (3) business days prior to the end of each calendar month,
to elect, in writing, the applicable rate of interest to be applied in SECTION
2.7( B) below (the "Elected Rate"). Unless notified by the Company otherwise,
the Bank shall apply the previous month's Elected Rate to the current calendar
month's outstanding principal balance of the Notes. The Elected Rate options
shall include, and are limited to, the Prime Rate and LIBOR, as defined herein.

            B. Applicable Rates of Interest. Each Warehouse Advance made under
the Note shall bear interest on the unpaid principal amount thereof from the
date made through maturity (whether by acceleration or otherwise) at:

               (i) If the Elected Rate is the LIBOR, at the per annum rate equal
to (i) LIBOR plus one and one-half of one percent (1.50%) (the "LIBOR-Based
Rate") for that portion of the average monthly aggregate outstanding principal
balance of the Warehouse Note which exceeds the Average Monthly Available
Deposits, and (ii) one and one-half of one percent (1.50%) for the portion of
the average monthly aggregate outstanding principal balance which does not
exceed such Average Monthly Available Deposits; or

               (ii) If the Elected Rate is the Prime Rate, at the per annum rate
equal to (i) the Prime Rate for that portion of the average monthly aggregate
outstanding principal balance of the Warehouse Note which exceeds the Average
Monthly Available Deposits, and (ii) one and one-half of one percent (1.50%) for
the portion of the average monthly aggregate outstanding principal balance which
does not exceed such Average Monthly Available Deposits.

            B. Highest Lawful Rate. Notwithstanding anything to the contrary
contained in this Credit Agreement or the Note, at no time shall the interest
rate payable on the Warehouse Advances, together with all fees and other amounts
payable hereunder to the extent the same constitute or are deemed to constitute
interest, exceed the maximum rate of interest allowed by applicable law (the
"Highest Lawful Rate"). In respect of any period during the term of this Credit
Agreement, any amount paid to any Bank, to the extent the same shall (but for
the provisions of this SECTION 2.7B) constitute or be deemed to constitute
interest, would exceed the maximum amount of interest permitted by the Highest
Lawful Rate during such period (such amount being hereinafter referred to as an
"Unqualified Amount"), then, notwithstanding anything to the contrary contained
in this SECTION 2.7, such Unqualified Amount shall be applied or shall be deemed
to have been applied as a prepayment on the Warehouse Advances.

      2.8 Fees.


            A. Non-Usage. Commencing with the period beginning May 1, 2002, the
Company agrees to pay to the Bank a non-usage fee (the "Non-Usage Fee") computed
at the rate of 25/100ths of one percent (0.25%) per annum of the monthly average
amount of the Bank's Total Line Commitment available each month, less the
monthly average of the Bank's Outstanding Warehouse Balance; provided, however,
that no Non-Usage Fee shall be due for any month in which the monthly average of
the Bank's Outstanding Warehouse Balance is equal to or greater than 50% of the
monthly average amount of the Bank's Total Line Commitment available in such
month.



                                       14
<PAGE>
            B. Collateral Handling. The Company agrees to pay to the Bank such
collateral handling fees ("Collateral Handling Fees") in the amounts and at the
times set forth in the fee letter issued by the Bank to the Company.


            C. Payment of Fees. The Non-Usage Fees and Collateral Handling Fees
shall be payable in arrears each month. The Bank shall compute the amounts of
the Non-Usage Fees and Collateral Handling Fees and include such fee on the
Billing Statement to be delivered to the Company each month under SECTION 2.9
hereof. The Company shall pay to the Bank the Non-Usage Fees and Collateral
Handling Fees set forth in such Billing Statement within five (5) calendar days
of its receipt of a Billing Statement.

            D. Fees Non-Refundable. The fees payable under this SECTION 2.8 once
paid shall be non-refundable, in whole or in part under any circumstances,
absent demonstrable error in the calculation of such fees.

      2.9 Interest Payments. As soon as reasonably possible subsequent to the
availability of the account analysis statement, the Bank shall deliver to the
Company an interest billing statement (the "Billing Statement"), which Billing
Statement shall set forth the interest accrued with respect to the outstanding
principal balance of the Warehouse Note bearing interest from and including the
first day of the preceding month through the last day of such month; provided,
that any failure or delay in delivering such Billing Statement or any inaccuracy
therein shall not affect any of the Company's obligations and liabilities
hereunder. Interest shall be payable, (i) in the case of the outstanding
principal balance of the outstanding principal balance of the Warehouse Note on
the fifth (5th) calendar day after receipt of the Billing Statement and (ii)
upon repayment of any of the outstanding principal balance of the Warehouse Note
at maturity (by reason of acceleration or otherwise). Any interest accruing at
the Default Rate shall be payable on demand.

      2.10 Post-Maturity Interest. Any principal payments on the Warehouse Note
not paid when due and, to the extent permitted by applicable law, any interest
payments on the Warehouse Note or any fees or other amounts owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate equal to the applicable
Default Rate. Payment or acceptance of the increased rates of interest provided
for in this SECTION 2.10 is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of the Bank.

      2.11 Computation of Interest. Interest on the Warehouse Advances and all
fees shall be computed on the basis of a three hundred sixty (360) day year, in
each case for the actual number of calendar days elapsed in the period during
which it accrues.


      2.12 General Provisions Regarding Prepayments and Payments.


            A. Prepayments. The Company may, at any time and from time to time,
prepay all or any portion of the Outstanding Warehouse Balance without premium
or penalty. All prepayments (whether voluntary or involuntary at maturity, by
acceleration or otherwise) of the Outstanding Warehouse Balances shall be
applied first, to any delinquent fees, costs or expenses and second, to the
repayment of the outstanding principal balance of all Warehouse Advances.

            B. Manner and Time of Payment. All payments of principal, interest
and fees hereunder, under the Warehouse Note by the Company shall be made
without defense, setoff and counterclaim and upon the Bank's receipt of notice
from the Company, which notice shall not be given later than the fifth (5th)
calendar day after the Company's receipt of the Billing Statement under SECTION
2.9 hereof, the Bank shall be


                                       15
<PAGE>
authorized to charge the Company's demand deposit account maintained at Bank
(Account # 754270103) (the "DDA Account") to pay all principal (to the extent
that the funds in the Collateral Proceeds Account are not sufficient to make a
payment of principal), interest and fees due hereunder, provided there are
sufficient funds available in such account for that purpose. If there are not
sufficient funds available in such account for that purpose or if the Bank has
not received notice from the Company authorizing the Bank to charge the
Company's DDA Account, the Company shall make such payments in same day funds
and delivered to the Bank not later than 1:00 p.m. Prevailing Time on the date
due at the Bank's Main Office, for the account of the Bank; funds received by
the Bank after that time shall be deemed to have been paid by the Company on the
next succeeding Business Day.

            C. Payments on a Business Day. Whenever any payment to be made
hereunder or under the Warehouse Note shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest on the underlying principal payment due hereunder or under
the Warehouse Note or of the fees hereunder, as the case may be.

      2.13 Set-Off. The Company hereby irrevocably authorizes the Bank, upon the
occurrence of an Event of Default to setoff the liability of the Company on the
Warehouse Note without notice, against all deposits and credits of the Company
with, and any and all claims of the Company against, the Bank at any time
outstanding provided, however, that the Bank shall not offset against deposits
and credits of the Company held in trust or in a custodial capacity for third
parties.

      2.14 Commitments. The Company shall obtain and maintain Commitments which,
in the aggregate, equal or exceed the aggregate amount of the advances for all
Pledged Loans financed and outstanding under this Credit Agreement. If an Event
of Default shall occur hereunder, at the option of the Bank, such Commitments
shall be assigned by the Company to the Bank.

                                    ARTICLE 3

                               COLLATERAL SECURITY

      3.1 Collateral. To secure the payment of the Warehouse Note and all other
Secured Obligations, the Company shall grant to the Bank, Security Interests in
such of its Loans, Mortgage-backed Securities, and other assets constituting
Collateral as may be required under the terms of the Security Agreement.


      3.2 Security Agreement. The Company shall execute and deliver to the Bank,
the Security Agreement.


      3.3 Priority of Security Interests. The Security Interests shall be first
and prior security interests subject to the limitations set forth in the Loan
Documents. The Company hereby acknowledges and agrees that the Bank now has, and
shall continue to have, a first and prior pledge and security interest in and to
the Collateral, as collateral security for the Note, the other Secured
Obligations, and any obligations and/or liabilities due and owing by the Company
pursuant to this Credit Agreement and each of the other Loan Documents, without
priority, distinction or preference of any kind whatsoever.

      3.4 Release of Security Interest. If no Event of Default or Unmatured
Event of Default has occurred and is then continuing, the Bank, at the request
of the Company, shall release its Security Interest in any item of Collateral;
provided, however, that after giving effect to any such requested release, the
Borrowing Base shall not be less than the Outstanding Warehouse Balance, and
provided further, that any such release of


                                       16
<PAGE>
Collateral shall occur only if expressly permitted by the terms of the Security
Agreement, and then only strictly in compliance with the terms thereof.

                                    ARTICLE 4

                              CONDITIONS PRECEDENT

      4.1 Closing; Initial Warehouse Advance. The obligation of the Bank to
close the financing contemplated hereunder and make the initial Warehouse
Advance shall be subject to the satisfaction of the following conditions
precedent:


            (a) Evidence of Corporate Existence of the Company. The Company
      shall have furnished the Bank with a copy of the Company's Articles of
      Organization and all amendments thereto, certified by the New York
      Secretary of State, together with an original certificate from said
      Secretary of State, dated not more than ten (10) calendar days prior to
      the date of this Credit Agreement, stating that the Company is a limited
      liability company duly organized, validly existing, and in good standing
      under the laws of such state, and a copy of the Operating Agreement of the
      Company.

            (b) Corporate Resolutions. The Company shall have furnished to the
      Bank copies of resolutions reflecting all necessary corporate action taken
      by the Company to authorize the execution, delivery, and performance of
      the Credit Agreement and all documents contemplated thereunder, certified
      by the secretary of the Company to be true, correct, and in full force and
      effect as of the date of the Credit Agreement.

            (c) Incumbency Certificate. The Company shall have furnished the
      Bank with incumbency certificates with respect to the officers of the
      Company, as applicable, authorized to execute and deliver the Credit
      Agreement and the instruments and documents contemplated thereunder.


            (d) Credit Agreement. This Credit Agreement shall have been executed
      by the Company and the Bank.


            (e) Loan Documents. The Loan Documents shall have been executed by
      the Company and delivered to the Bank.


            (f) Guaranties. The Unconditional and Continuing Guaranty of
      Payment, in the form of Exhibit G to this Credit Agreement, shall have
      been executed by each of the Guarantors and delivered to the Bank.


            (g) Warehouse Note. The Warehouse Note shall have been executed by
      the Company and delivered to the Bank.

            (h) Legal Opinion. The opinion of the Company's legal counsel, in a
      form of Exhibit H, shall have been delivered to the Bank.

            (i) Financing Statements. The Company shall have executed and
      delivered, in appropriate form for filing in all appropriate governmental
      offices, such Uniform Commercial Code financing statements with respect to
      the Collateral as the Bank shall reasonably request.

                                       17
<PAGE>
            (k) Evidence of Insurance. The Company shall have furnished the Bank
      with evidence of the insurance coverage required to be maintained by the
      Company pursuant to SECTION 7.1(I) hereof.

            (l) Financial Statements. The Company shall furnish the Bank with a
      copy of its audited financial statements as of December 31, 2000 and its
      unaudited financial statements as of September 30, 2001.

            (m) Termination Statements and Releases. All Uniform Commercial Code
      Termination Statements and mortgage releases necessary to release of
      record all existing liens and security interests encumbering any of the
      Collateral other than those in favor of Bank shall have been duly executed
      and delivered by all appropriate or necessary parties.

            (n) UCC Search Reports. UCC Search Reports in the name of the
      Company shall have been obtained from the Office of the Secretary of State
      of New York.


            (o) Other Loans. The Company shall have furnished the Bank with a
      summary description of any and all existing loan agreements for amounts of
      fifty thousand dollars ($50,000.00) or more to which the Company is a
      party.


            (p) Other Documents. Company shall have delivered such other
      documents or instruments or reports as the Bank may reasonably request.


            (q) Reimbursement for Field Exam. Company shall have reimbursed the
      Bank for the costs of a field exam conducted by Reynolds & Associates, not
      to exceed $3,500.


            (r) Payment of Bank's Legal Fees. Company shall have paid the
      reasonable legal fees incurred by the Bank in drafting and closing the
      Credit Agreement and related documents; provided that the Borrower's share
      of such legal fees shall not exceed $4,000 and any portion of reasonable
      legal fees in excess of $4,000 shall be paid by the Bank.

      4.2 All Warehouse Advances. The obligation of the Bank to make a Warehouse
Advance hereunder shall be subject to each of the following conditions
precedent:


            (a) Covenant Compliance Certificate. In accordance with the
      provisions of SECTION 7.3(B) below, the Company shall have executed and
      delivered to the Bank a completed Covenant Compliance Certificate, in the
      form of EXHIBIT A, together with a spreadsheet or other working papers
      showing the calculations used to prepare such certificate.

            (b) No Default. As of the date of the making of such Warehouse
      Advance, no Event of Default shall have occurred and be then existing.

            (c) Compliance with Loan Documents. The Company shall be in full
      compliance with all conditions and provisions of this Credit Agreement,
      the Loan Documents, and all related instruments and documents.

            (d) No Adverse Change. No material adverse change shall have
      occurred in the condition of the Company, financial or otherwise, or in
      the earnings, affairs, or business prospects of the Company, since the
      date of the Credit Agreement.



                                       18
<PAGE>
            (e) Representations and Warranties. The representations and
      warranties contained in ARTICLE 6 of this Credit Agreement and in the
      Security Agreement shall be true in all material respects on the date of
      such Warehouse Advance with the same force and effect as though made on
      and as of that date.


                                    ARTICLE 5

                               FINANCIAL COVENANTS

      So long as any portion of the Warehouse Advances made under this Credit
Agreement remains unpaid or this Credit Agreement continues in effect, unless
the Bank otherwise consents in writing, the Company shall abide by each of the
following covenants:

      5.1 Borrowing Base. The Outstanding Warehouse Balance shall not exceed the
Borrowing Base.


      5.2 GAAP Net Worth. The GAAP Net Worth of the Company shall, at all times,
be greater than the sum of Three Million Eight Hundred Thousand Dollars
($3,800,000.00).


      5.3 Leverage Ratio. The ratio of Total Indebtedness to Adjusted Tangible
Net Worth shall not exceed ten (10) to one (1).


      5.4 Minimum Liquidity. The Company shall maintain minimum cash and cash
equivalents of at least Five Hundred Thousand Dollars ($500,000.00).


      The parties hereto acknowledge and agree that in the event that any of the
foregoing covenants are materially changed as a result of a change in GAAP, the
Bank and the Company will amend the terms of this ARTICLE 5 to accurately
reflect the agreement between the Bank and the Company with respect to such
financial covenants.

                                    ARTICLE 6

                         REPRESENTATIONS AND WARRANTIES

      To induce the Bank to enter into the Credit Agreement and to make
Warehouse Advances pursuant thereto, the Company represents and warrants to the
Bank as follows, which representations and warranties shall survive the
execution and delivery of this Credit Agreement and shall be deemed to be
continuing representations and warranties until the Warehouse Note and the other
obligations herein have been respectively paid in full to the Bank and this
Credit Agreement has been fully terminated:

      6.1 Corporate Organization and Good Standing. The Company is a limited
liability company duly organized, validly existing, and in good standing under
the laws of its state of formation, and it has the requisite power and authority
to own its properties and to conduct its business in the manner in which such
business is presently conducted. The correct legal name of the Company, its
state of organization, and the correct address of its principal place of
business are set forth in SCHEDULE 6.1 to this Credit Agreement.

      6.2 Qualification. The Company is duly qualified to transact business and
is in good standing as a foreign limited liability company in every foreign
jurisdiction where the failure to so qualify would materially and adversely
affect the Company's business or its properties.




                                       19
<PAGE>
      6.3 Power and Authority. The Company has the requisite power and
authority, corporate and otherwise, to enter into this Credit Agreement, to make
the borrowings herein contemplated, to execute and deliver the Loan Documents to
which it is a party, and to perform its obligations hereunder and thereunder,
all of which have been duly authorized by all proper and necessary corporate
action, and the same do not and will not:

            (a) violate or conflict with any provision of the articles of
      incorporation or bylaws of the Company;

            (b) violate or conflict with the provisions of any agreement, law,
      rule, regulation, order, writ, judgment, injunction, decree, determination
      or award to which the Company is a party or by which it or its property is
      bound;

            (c) result in, or require the creation or imposition of, any lien,
      pledge, security interest, charge or encumbrance of any nature upon or
      with respect to any property now or hereafter owned by the Company, other
      than such liens and security interests as contemplated by the Security
      Agreement; or

            (d) conflict with, result in a breach of, or constitute a default
      under, any indenture, loan agreement, credit agreement, or any other
      agreement or instrument to which the Company is a party or by which it or
      its property is bound.

      6.4 Binding Effect. The Credit Agreement and the other Loan Documents to
which the Company is a party are valid, binding, and legally enforceable
obligations of the Company in accordance with their respective terms (subject
only to limitations as to enforceability which might result from bankruptcy,
reorganization, insolvency, or similar laws affecting creditors' rights
generally).

      6.5 Financial Condition. The Company's audited financial statements as of
December 31, 2000 (which have been prepared in conformity with GAAP applied on a
basis consistent with that of the preceding fiscal year), copies of which have
been furnished to the Bank, pursuant to SECTION 4.1(K) of this Credit Agreement,
present fairly the financial condition of the Company as at such date and the
results of their operations for the period then ended. There has been no
material adverse change in said financial condition except as disclosed in
SCHEDULE 6.1 to this Credit Agreement. The Company does not have any contingent
obligations, liabilities, taxes, or other outstanding financial obligations
which are material in the aggregate, except as described in SCHEDULE 6.1 to this
Credit Agreement.

      6.6 Properties. The Company has good and marketable title to all of its
properties and assets, and none of its assets are subject to any mortgage,
pledge, title retention lien, security interest, or encumbrance, except for
those permitted by SECTION 7.2(G) and those described in SCHEDULE 6.1 to this
Credit Agreement.


      6.7 Litigation. No litigation, tax claim, proceeding, dispute, or
governmental proceeding is pending or, to its knowledge, threatened against the
Company, which (a) involves an uninsured claim of over One Hundred Fifty
Thousand Dollars ($150,000.00) against the Company, or (b) in the opinion of the
Company, may have a material adverse effect on the business or condition
(financial or other), affairs, or operations of the Company, or (c) involves or
may affect the validity or enforceability of any Loan Document or the perfection
or priority of any lien created thereby, except those matters described in
SCHEDULE 6.1 to this Credit Agreement.



                                       20
<PAGE>
      6.8 Regulations U and X. No part of the proceeds of the borrowings
hereunder will be used to purchase or carry any margin stock (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any margin
stock, and the Company is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any such margin stock. If requested by the Bank, the Company will
furnish the Bank with a statement in conformity with the requirements of Federal
Reserve Form U-1 referred to in said Regulation. The Company also warrants that
no part of the proceeds of the borrowing hereunder will be used by it for any
purpose which violates, or which is inconsistent with, the provisions of
Regulation X of said Board of Governors.

      6.9 Investment Company Act. The Company is not an investment company or a
company controlled by an investment company within the meaning of the Investment
Company Act of 1940, as amended.

      6.10 Securities Act. The Company has not issued any unregistered
securities in violation of the registration requirements of the Securities Act
of 1933, as amended, or of any other law, and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended. The Company is not required to
qualify an indenture under the Trust Indenture Act of 1939, as amended, in
connection with its execution and delivery of the Warehouse Note.

      6.11 Permits; Consents, etc. The Company has all necessary certificates,
licenses, authorizations, registrations, permits and approvals necessary to own
and operate its property and to conduct its business as it is currently being
conducted. No consent, approval, authorization of, or registration, declaration,
or filing with, any governmental authority is required on the part of the
Company in connection with the execution and delivery of the Credit Agreement or
the other Loan Documents (other than filings to perfect the Security Interests),
or in connection with the performance of or compliance with the terms,
provisions, and conditions hereof except for those that have been obtained.

      6.12 ERISA. No fact or circumstance, including but not limited to any
Reportable Event within the meaning of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), exists in connection with any Plan of the
Company ("Plan" shall mean an employee pension benefit plan or pension covered
by ERISA which is guaranteed by the Pension Benefit Guaranty Corporation or any
successor thereto) which might constitute grounds for the termination of any
such Plan by the Pension Benefit Guaranty Corporation or for the appointment of
a trustee to administer any such Plan. For purposes of this representation and
warranty, the Company shall be deemed to have knowledge of all facts
attributable to any administrator of any such Plan.

      6.13 Affiliates. The correct legal name of each Affiliate, the state of
its organization (or, if a natural person, of his or her domicile), and the
percentage of its capital stock or equity that is directly or indirectly owned
by the Company, where the percentage of the Company's stock which is directly or
indirectly owned by each Affiliate, are set forth in SCHEDULE 6.13 to this
Credit Agreement.

      6.14 Tax Returns and Payments. The Company has filed all tax returns
required by law to be filed by it and has paid all taxes, assessments and other
governmental charges levied upon its properties, assets, income and franchisees,
other than those not yet delinquent and those, not substantial in aggregate
amount, which are being contested in good faith by the Company. The charges,
accruals and reserves on the books of the Company in respect of their taxes are
adequate in the opinion of the Company. The Company knows of no material unpaid
assessment for additional taxes or any basis therefor.



                                       21
<PAGE>
      6.15 Disclosure; Solvency. Neither this Credit Agreement nor any other
document furnished to the Bank by or on behalf of the Company in connection with
the credit facilities contemplated herein, contains any statement of any
material fact which is untrue or misstates a material fact necessary in order to
make the statements contained herein or therein not misleading. There is no fact
known to the Company which materially adversely affects or in the future will
(so far as the Company can now foresee) materially adversely affect the
business, operations, affairs or condition of the Company or any of its
properties which has not been set forth in this Credit Agreement or in the other
documents furnished to the Bank by or on behalf of the Company in connection
with the credit facilities contemplated herein. The Company is currently
solvent; and neither the issuance and delivery of the Warehouse Note, nor the
performance of the transactions contemplated hereunder or thereunder, will
render the Company insolvent, inadequately capitalized to undertake the
transactions contemplated hereunder or to undertake the businesses in which it
is presently engaged or about to engage or render the Company unable to pay its
debts as they become due; the Company is not contemplating either the filing of
a petition by it or the commencement of a case by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
its property; and the Company has no knowledge of any Person contemplating the
filing of any such petition or commencement of any such case against the
Company.

                                    ARTICLE 7

                                    COVENANTS

      7.1 Affirmative Covenants. So long as any portion of the Secured
Obligations under the Credit Agreement, including the Note, remains unpaid or
this Credit Agreement continues in effect, unless the Bank otherwise consents in
writing, the Company shall abide by each of the following covenants and
agreements:

            (a) Payment and Performance of Obligations. The Company will pay all
      principal, interest, fees, and other charges with respect to the Note and
      any other obligations when and as the same become due and payable, will
      strictly observe and perform all covenants, agreements, terms, conditions,
      and limitations contained in this Credit Agreement and the other Loan
      Documents, and will do all things necessary to prevent any forfeiture or
      impairment of the Bank's rights thereunder, and to prevent the occurrence
      of any Event of Default.

            (b) Notice of Default. The Company shall promptly notify the Bank in
      writing of the occurrence of any Event of Default or Unmatured Event of
      Default, specifying in connection with such notification all actions
      proposed to be taken to remedy such circumstance.

            (c) Notice of Non-Payment. The Company shall notify the Bank in
      writing of the occurrence of any failure or refusal by the Company to pay
      any single amount in excess of One Hundred Fifty Thousand Dollars
      ($150,000.00) payable under any agreement or agreements to which it is a
      party (other than trade payables less than sixty (60) calendar days past
      due), within ten (10) calendar days of such failure or refusal, unless the
      Company is diligently and in good faith contesting its obligations to make
      such payment by appropriate action.

            (d) Notice of Legal Proceedings. The Company shall, promptly upon
      becoming aware of the existence thereof, notify the Bank in writing of the
      institution of any litigation, legal proceeding, or dispute with any
      person or tribunal, that might materially and adversely affect the
      condition, financial or otherwise, or the earnings, affairs, business
      prospects, or properties of the Company.


                                       22
<PAGE>
            (e) Continuation of Primary Business. The Company shall continue to
      maintain the character of its primary business as currently conducted.

            (f) Maintenance of Corporate Existence, Qualification and Assets.
      The Company shall at all times maintain (i) its legal existence; (ii) its
      qualification to transact business and good standing as a foreign limited
      liability company in all jurisdictions where the failure to so qualify
      would materially and adversely affect the nature of its properties or the
      conduct of its businesses; and (iii) all franchises, licenses, rights, and
      privileges necessary for the proper conduct of its businesses.

            (g) Maintenance of Security. The Company shall execute and deliver
      to the Bank all mortgages, security agreements, financing statements,
      assignments, and such other documents and instruments, and all supplements
      thereto, and continuation statements thereof, and take such other actions
      as the Bank deems reasonably necessary in order to maintain as valid,
      enforceable, and first priority liens and security interests granted to
      the Bank.

            (h) Payment of Taxes and Claims. The Company shall pay all taxes
      imposed upon it or upon any of its properties or with respect to its
      franchises, business, income, or profits before any material penalty or
      interest accrues thereon. The Company shall also pay all material claims
      (including without limitation claims for labor, services, materials, and
      supplies) for sums which have or shall become due and payable and which by
      law have or might become a vendors lien or a mechanics, laborers',
      materialmen's, statutory, or other lien affecting any of its properties;
      provided, however, that the Company shall not be required to pay any such
      taxes or claims if (i) the amount, applicability, or validity thereof is
      being contested in good faith by appropriate legal proceedings promptly
      initiated and diligently conducted; and (ii) the Company shall have set
      aside on its books reserves (segregated to the extent required by
      generally accepted accounting principles) adequate with respect thereto.

            (i) Maintenance of Insurance. The Company shall at all times
      maintain, or cause to be maintained, insurance covering such risks as is
      customarily carried by prudent businesses similarly situated, including,
      without limitation, hazard, fidelity, errors and omissions, and blanket
      bond coverages in conformity with the Uniform Single Audit Program for
      Mortgage Bankers. All such insurance shall be written by such insurers and
      in such form, amount, and coverage as may be satisfactory to the Bank,
      naming the Bank as additional insured or loss payee, as applicable. The
      Company shall provide the Bank with a certificate from one or more
      reputable insurance companies setting forth the amount or amounts of
      coverage and containing an agreement from each such insurance company that
      no termination, expiration, cancellation, or lapse of any such insurance
      policy shall occur without at least thirty (30) calendar days advance
      written notice to the Bank.

            (j) Compliance with Laws and Agreements. The Company shall comply
      with the provisions of any laws and the provisions of any agreements
      material to its businesses and operations and shall maintain its abilities
      to perform its obligations under all agreements material to its businesses
      and operations.

            (k) Inspections. The Company shall, at any reasonable time and from
      time to time upon one (1) Business Day's prior notice, permit any agents
      or representatives of the Bank to inspect, examine, and make copies of and
      abstracts from its records and books of account, and to discuss its
      affairs, finances, and accounts with any of its officers, management
      employees, or independent public accountants (and by this provision the
      Company hereby authorizes said accountants to discuss with the Bank and
      their respective agents or representatives the Company's affairs,
      finances, and accounts). The Company shall have the right to have a
      representative present at


                                       23
<PAGE>
      any of the inspections, examinations or discussions conducted by the Bank;
      provided, however, the Bank shall not be required to delay any of such
      inspections, examinations or discussions to accommodate the presence of
      such representative or representatives.

            (l) Records. The Company shall keep accurate records and books of
      account reflecting all of its financial transactions, in which complete
      entries shall be made in accordance with generally accepted accounting
      principles consistently applied.

            (m) ERISA. With respect to any Plan maintained or adopted by the
      Company, the Company shall (i) at all times make prompt payments of
      contributions required to be made to meet the minimum funding standards of
      ERISA; (ii) promptly, after the filing thereof, furnish to the Bank copies
      of all reports of prohibited transactions and accumulated funding
      deficiencies required to be made pursuant to the provisions of ERISA; and
      (iii) notify the Bank promptly of the occurrence of any Reportable Event.

            (n) Further Assurances. The Company shall execute and deliver such
      other and further instruments, documents, or assurances as in the judgment
      of the Bank may be reasonably required to more effectively create or
      perfect the Security Interests or to confirm or evidence the obligations
      imposed by the terms and provisions of the Credit Agreement and the Loan
      Documents.

            (o) Change in Name or Location. The Company shall notify the Bank in
      writing at least thirty (30) calendar days in advance of any change in
      location of its principal place of business, chief executive office, or
      place where records are kept, or of any proposed change of corporate name.
      To the extent not in the physical possession of the Bank, the Collateral
      and all books and records pertaining thereto shall be maintained and
      stored at the location specified on SCHEDULE 6.1 to this Credit Agreement,
      and the Company shall not remove any part of the Collateral from such
      location, other than temporarily in the ordinary course of business,
      unless the Company shall have provided the Bank with prior written
      notification of such change in location in accordance with the terms of
      this section and shall have assisted the Bank in filing such security
      agreements, financing statements, or other notices deemed necessary by the
      Bank to preserve and maintain the continued validity, enforceability, and
      priority of the Banks' lien on and Security Interest in the Collateral.

            (p) Change in Management. The Company shall notify the Bank in
      writing within fourteen (14) calendar days of any change in the Company's
      senior management.

            (q) Change in Ownership. The Company shall notify the Bank in
      writing of any proposed change in control in the ownership of the capital
      stock of the Company promptly upon obtaining knowledge of the same.

            (r) Inter-Creditor Agreements. The Company shall furnish the Bank
      with the Inter-Creditor Agreement duly executed and delivered by HSBC
      within thirty (30) days of the date hereof.

      7.2 Negative Covenants. So long as any portion of the Secured Obligations
under the Credit Agreement including the Note, remains unpaid or this Credit
Agreement continues in effect, the Company shall not violate any of the
following covenants:

            (a) Limitation on Indebtedness. The Company shall not incur, create,
      assume, or otherwise be or become directly or indirectly liable with
      respect to any indebtedness if, as a result thereof, the Company is in
      violation of any of the covenants set forth in ARTICLE 5.


                                       24
<PAGE>
            (b) Amendment of Corporate Documents. The Company shall not cause or
      permit any amendment of its Articles of Organization or any material
      change in its Operating Agreement in effect as of the date hereof except
      with the prior consent of the Bank which consent shall not be unreasonably
      withheld.

            (c) Distributions. Except as permitted under SECTION 7.2(L) hereof,
      Company shall not without the prior written consent of the Bank, which
      consent shall not be unreasonably withheld: (i) set apart any sum for the
      payment of any dividends or distributions to its members, except to the
      extent that the Company, after making such distributions, will remain in
      compliance with its financial and other covenants hereunder.

            (c) Mergers, Sales, Transfers or Other Disposition of Assets. The
      Company shall not: (i) dissolve or otherwise dispose of all or any
      material portion of its assets, or acquire all or any material portion of
      the assets or outstanding capital stock of any other business entity; (ii)
      sell, lease, or otherwise transfer or dispose of any material assets for
      less than the higher of book value or fair market value (except assets no
      longer usable in Company's business); (iii) consolidate with or merge into
      another corporation or other legal entity or permit one or more other such
      entities to consolidate with or merge into it; (iv) effect any material
      adverse change in its capitalization; or (v) sell, lease, transfer, lend,
      or convey any of its material assets to an Affiliate.

            (d) VA Guaranties and FHA Insurance. The Company shall not commit or
      suffer to be committed any act which would invalidate the guarantee of the
      VA or insurance by FHA or cause any impairment to the validity of or
      priority of the mortgage lien which secures any of the Loans, pledged to
      the Bank hereunder. In the event that any such guarantee or insurance
      should lapse or otherwise be invalidated, the Company shall, within
      fifteen (15) calendar days of such lapse or invalidation, cause the Loan
      affected by such lapse or invalidation to be removed from Collateral, with
      either (i) substitution of such other property constituting Collateral
      hereunder of at least equal value, or (ii) payment of the Warehouse
      Advance made by the Bank with respect to such Loan.

            (e) Maintenance of Qualifications. The Company shall not commit or
      suffer to be committed any act which would adversely affect its
      eligibility to participate as an FHA approved mortgagee, as an approved
      lender under the VA guarantee program, as an approved seller-servicer by
      GNMA, as an approved seller-servicer of mortgage notes to FNMA and to
      FHLMC in the FHLMC regions in which it operates, or its eligibility to
      issue Mortgage-backed Securities or to service the mortgage pools formed
      with respect to Mortgage-backed Securities.

            (f) Liens. The Company shall not create or permit to exist, any
      mortgage, pledge, title retention lien, lease purchase, or other
      encumbrance or security interest, with respect to any assets now owned or
      hereafter acquired by the Company except: (i) the Security Interests and
      the liens and security interests created under the Collateral Documents;
      (ii) materialmen's, mechanics', suppliers', tax, or warehousemen's liens,
      statutory liens of landlords and other like liens arising in the ordinary
      course of business which are not yet due or which are being contested in
      good faith by appropriate proceedings; (iii) liens incurred or deposits
      made in the ordinary course of business in connection with workers'
      compensation, unemployment compensation, and other types of social
      security, or to secure the performance of other statutory obligations;
      (iv) encumbrances consisting of zoning regulations, easements, rights of
      way, survey exceptions, and other similar restrictions on the use of real
      property, and minor irregularities in titles thereto which do not
      materially impair their use in the operation of its business; (v) liens on
      Mortgage-backed Securities which are not pledged to the Bank and liens on
      such Mortgage-backed Securities which secure the repurchase obligations of
      the Company with respect to


                                       25
<PAGE>
      such Mortgage-backed Securities; (vi) liens and security interests
      incurred or made in the purchase of property or equipment in the ordinary
      course of business; (vii) existing liens and security interests described
      in SCHEDULE 6.1 to this Credit Agreement; (viii) such other liens and
      security interests on the assets of the Company which do not constitute
      Collateral which are consented to in writing by the Bank.

            (g) Guaranties. The Company shall not, without the prior written
      consent of the Bank, guaranty, endorse, assume, become surety for,
      indemnify, or otherwise become or be responsible for the obligations of
      any Person except: (i) endorsements of negotiable instruments for deposit
      or collection in the ordinary course of business and (ii) obligations
      incurred in connection with the sale of Loans and servicing rights owned
      by the Company in the ordinary course of business of the Company.

            (h) Use of Funds. The Company shall not use any funds provided by
      the Bank under this Credit Agreement, nor under any Warehouse Advance, for
      any purpose other than funding or purchasing Loans. The Company shall not
      use the proceeds of any Conforming/Government Advance, Jumbo Advance,
      Second Mortgage Loan Advance, Alt A Advance, Subprime Advance, Wet Advance
      or Co-Op Advance for any purpose other than the purposes encompassed by
      the definition of those terms in ARTICLE 1 of this Credit Agreement.

            (i) Capital Expenditures. The Company shall not, without the prior
      written consent of the Bank, make, or incur obligations for, any capital
      expenditures in any fiscal year, including, without limitation,
      capitalized lease obligations, in excess of seven and one-half of one
      percent (7.50%) of the Company's GAAP Net Worth determined on a
      non-cumulative basis.

            (j) Loans. The Company shall not, other than in the ordinary course
      of its business, make any loan to any Person if such loan would cause the
      aggregate amount of such loans to be in excess of One Hundred Thousand
      Dollars ($100,000.00), unless it obtains prior consent from the Bank, such
      consent not to be unreasonably withheld.

            (k) Dividends. The Company shall not declare or pay cash or stock
      dividends upon any of the stock of the Company or make any distributions
      of the property or assets of the Company if, at the time of the payment of
      any such dividends by the Company under this Section, an Event of Default
      has then occurred and is continuing or will occur by virtue of the payment
      of such dividends.

            (l) Servicing Portfolio. The Company shall not commit or suffer to
      be committed any act which would constitute a breach of any contract to
      which he Company now or hereafter becomes a party under which the Company
      is obligated to service Loans for a third party. The Company shall not
      pledge, assign, grant a security interest in, or otherwise encumber any
      servicing rights or any other interest in its Servicing Portfolio without
      the prior written consent of the Bank. The Company shall not permit the
      Servicing Portfolio to include any recourse servicing obligations other
      than those recourse servicing obligations which exist as of the date of
      this Agreement and which are identified in the form acceptable to Bank.

      7.3 Reporting Requirements. So long as any portion of the Company's
liabilities under the Credit Agreement, including the Note, remains unpaid or
this Credit Agreement remains in effect, unless the Bank otherwise consents in
writing, the Company shall furnish the following reports:


                                       26
<PAGE>
            (a) Annual Reports. As soon as available, and in any event within
      ninety (90) calendar days after the end of each fiscal year of the
      Company, the Company shall furnish to the Bank (i) a complete annual
      audited financial statement with all notes thereto, prepared in reasonable
      detail in accordance with generally accepted accounting principles
      consistently applied, and in detail reasonably satisfactory to the Bank,
      which shall contain at least a balance sheet, a statement of profit and
      loss and stockholder's or members equity, and a statement of cash flows,
      set forth in each case in comparative form with corresponding figures from
      the preceding fiscal year for the Company, and (ii) to the extent the same
      is prepared by the Company, the management letter prepared by the firm of
      independent certified public accountants in connection with the
      certification of the annual audited financial statements of the Company.
      Each annual audited financial statement of the Company shall be duly
      certified by a firm of independent certified public accountants of
      recognized national standing or otherwise acceptable to the Bank. The
      certified report of such firm shall include a statement to the effect that
      the examination made in preparing and certifying such annual audited
      financial statement has not disclosed the existence of a condition or
      event at the end of the fiscal year which constitutes an Event of Default
      or Unmatured Event of Default hereunder, or a statement specifying the
      nature and period of existence of any such condition or event disclosed by
      such examination.

            (b) Quarterly Reports. As soon as available, and in any event within
      forty five (45) calendar days after the end of each quarter, the Company
      shall furnish to the Bank (i) financial statements for the preceding
      quarter, prepared on a basis consistent with prior periods and in
      accordance with generally accepted accounting principles, such quarterly
      financial statements shall contain at least a balance sheet of the Company
      as of the end of such quarter and a statement of profit and loss for such
      quarter and for the fiscal year to date, (ii) a duly executed Covenant
      Compliance Certificate, (iii) a servicing report, which shall show the
      status of the Servicing Portfolio, including the delinquency status, all
      in such form and detail as the Bank shall reasonably request.

            (c) Agency Audits. Promptly upon delivery to the Company, the
      Company shall furnish to the Bank a copy of the results of any field or
      desktop audit of the Company's business and/or records performed by GNMA,
      FNMA, FHLMC, the Department of Housing and Urban Development or any state
      agency audit, together with a copy of all subsequent correspondence
      relating to such audit between the Company and such agency.

            (d) Mortgage Position Report. Within seven (7) calendar days after
      the end of each month, a Mortgage Position Report which details the
      Company's market and commitment positions relative to Loans in pipeline
      and closed Loans in inventory, such Mortgage Position Report to be in form
      as is reasonably acceptable to the Bank.

            (e) Personal Financial Statements and Tax Returns of Guarantors. As
      soon as available, and in any event no less frequently then annually, the
      Company shall furnish to the Bank copies of each Guarantor's (i) current
      personal financial statement and (ii) federal income tax return for the
      preceding year.

            (f) Other Reports and Information. The Company shall deliver or
      cause to be delivered to the Bank such information (not otherwise required
      to be furnished under this Credit Agreement or the Loan Documents)
      respecting its business, affairs, assets, and liabilities, and such
      statements, lists of property and accounts, reports, opinions,
      certifications, and documents as the Bank may from time to time reasonably
      request.


                                       27
<PAGE>
                                    ARTICLE 8

                                EVENTS OF DEFAULT

      8.1 Events of Default. The occurrence of one or more of the following
events shall constitute an "Event of Default" hereunder immediately upon the
expiration of any grace or cure period which is specifically set forth herein as
being applicable with respect to such event:

            (a) Default under the Loan Documents. The occurrence of an Event of
      Default under any of the Loan Documents.

            (b) Payments. The Company shall fail to make any payment of
      principal, interest, fees, or other amounts with respect to the
      obligations or liabilities of the Company to a Bank, whether under this
      Credit Agreement, including without limitation the obligations set forth
      in the Note, or otherwise, on or before the date such payment is due, and
      such failure shall continue for a period of ten (10) calendar days.

            (c) Covenant Defaults. The Company shall fail to perform or observe
      any covenant, agreement, or provision contained in this Credit Agreement
      or the other Loan Documents by it to be performed or observed, including
      without limitation the covenants set forth in ARTICLES 5 AND 7 of this
      Credit Agreement and such failure with respect thereto shall continue for
      a period of thirty (30) calendar days after receiving written notice of
      such failure from the Bank, except for the covenants contained in SECTIONS
      7. L(A), (B), (C), (E), (F), (G), (I), (O), (Q) AND (R), AND SECTION 7.2
      of this Credit Agreement, for which there shall be no grace period unless,
      and only to the extent, specified in such SECTIONS.

            (d) Representations and Warranties. Any representation or warranty
      made by the Company herein or in any other Loan Document, including
      without limitation the representations and warranties set forth in ARTICLE
      6 of this Credit Agreement, or in any certificate, schedule, statement,
      report, notice or writing furnished by or on behalf of the Company to the
      Bank, whether furnished prior to, contemporaneously with, or subsequent to
      the execution of this Credit Agreement, is untrue or is breached in any
      material respect.

            (e) Default on Indebtedness. Any creditor or any representative of
      any creditor of the Company declares, or is or becomes entitled to
      declare, any indebtedness of the Company which exceeds One Hundred Fifty
      Thousand Dollars ($150,000.00), to be due and payable prior to its
      expressed maturity by reason of any default by the Company in the
      performance or observance of any obligation or condition, or any such
      indebtedness becomes due by its terms and is not promptly paid or
      extended.

            (f) Insolvency. The Company becomes insolvent or generally does not
      pay its debts as they become due, or applies for, consents to, or
      acquiesces in the appointment of a trustee or receiver of the Company or
      its property; or in the absence of such application, consent, or
      acquiescence, a trustee or receiver is appointed for the Company or for a
      substantial part of its property and is not discharged within forty five
      (45) calendar days; or any bankruptcy, reorganization, debt arrangement,
      or other proceeding under any bankruptcy or insolvency law is instituted
      by or against the Company and, if instituted against the Company, is
      consented to or acquiesced in by the Company, or remains for thirty (30)
      calendar days undismissed.


                                       28
<PAGE>
            (g) Dissolution or Liquidation. Any dissolution or liquidation
      proceeding is instituted by or against the Company and, if instituted
      against the Company, is consented to or acquiesced in by the Company, or
      remains for thirty (30) calendar days undismissed.

            (h) Termination or Suspension of Business. The transaction of the
      usual business of the Company is terminated or suspended; provided,
      however, that a suspension of business related to a natural disaster shall
      not constitute an Event of Default unless such suspension shall last for
      more than fifteen (15) days.

            (i) Judgments. The entry of an uninsured money judgment against the
      Company in excess of One Hundred Fifty Thousand Dollars ($150,000.00),
      unless such judgment shall be satisfied, discharged, or stayed within
      sixty (60) calendar days after the entry thereof, and if stayed, within
      ten (10) calendar days after the expiration or lapse of any such stay.

            (j) Material Adverse Change. The occurrence of any material adverse
      change in the condition of the Company, financial or otherwise.

            (k) ERISA. The occurrence of any Reportable Event or any other fact
      or circumstance which constitutes grounds for the termination of any Plan,
      as defined in SECTION 6.12 hereof, of the Company by the Pension Benefit
      Guaranty Corporation or for the appointment by an appropriate United
      States District Court of a trustee to administer any such Plan shall have
      occurred and be continuing for thirty (30) calendar days; or any Plan of
      the Company shall be terminated within the meaning of ERISA; or a trustee
      shall be appointed by the appropriate United States District Court to
      administer any Plan of the Company; or the Pension Benefit Guaranty
      Corporation shall institute proceedings to terminate any Plan of the
      Company or to appoint a trustee to administer any such Plan; and, upon the
      occurrence of any of the foregoing, the aggregate amount of the vested
      unfunded liability under all such Plans exceeds ten percent (10%) of the
      stockholders' equity of the Company, and such liability is not covered by
      insurance.

      8.2 Remedies Not Exclusive. The rights and remedies provided in this
Credit Agreement, the Note, the Collateral Documents and all other Loan
Documents are cumulative, may be exercised in such sequence or combination as
the Bank may elect, and are not exclusive of any rights or remedies otherwise
provided by law.

      8.3 Remedies Upon Event of Default. If an Event of Default shall have
occurred, the Bank shall exercise any one or more of the other rights and
remedies, and any other remedies provided in any of the Loan Documents, as the
Bank may deem necessary or appropriate; provided, however, that if any Event of
Default specified in SECTIONS 8.1(B), 8.1(F) or 8.1(G) shall occur, the
principal of, and all interest on, the Notes and other liabilities hereunder
shall thereupon become due and payable concurrently therewith and the Banks'
obligation to make Warehouse Advances hereunder shall immediately terminate,
without any further action by the Bank and without presentment, demand, protest,
notice of default, notice of acceleration or of intention to accelerate or other
notice of any kind, all of which the Company hereby expressly waives:

            (a) Acceleration. Declare the unpaid balance of the Note, including
      principal, interest, and any fees or other obligations, or any part
      thereof, to be immediately due and payable, without demand, presentment,
      or further notice of any kind, the same being hereby expressly waived by
      the Company, whereupon it shall be due and payable.


                                       29
<PAGE>
            (b) Warehouse Advances; Termination. Refuse to make any further
      Warehouse Advances or readvances under the Note, and terminate this Credit
      Agreement and the other Loan Documents.

            (c) Judgment. Reduce any claim to judgment.

            (d) Offset. Exercise the rights of offset and/or banker's lien
      against the interests of the Company in and to every property of the
      Company (other than escrow deposits or custodial trust accounts managed by
      the Company) which is in the possession of a Bank to the extent of the
      full amount of the Company's obligations to the Bank.

            (e) Foreclosure/Repurchase. Exercise all those rights and remedies
      allowed to secured parties by all applicable laws, including without
      limitation the Uniform Commercial Code or any other jurisdiction in which
      the Collateral or any portion thereof may be located.

            (f) Possession. Enter upon the premises of the Company and take
      immediate possession of the Collateral, with or without legal process,
      either personally or by means of a receiver appointed by a court of
      competent jurisdiction.

            (g) Collection of Accounts. Collect and receive all accounts, rents,
      income, revenue, earnings, issues, and profits arising from the Collateral
      or any part thereof.

            (h) Exercise of Rights. Exercise any and all other rights afforded
      by any applicable laws or by this Credit Agreement and the other Loan
      Documents at law, in equity, or otherwise, including, but not limited to,
      the rights to bring suits or other proceedings before any tribunal of
      competent jurisdiction, either for specific performance of any covenant or
      condition contained in the Loan Documents or in aid of the exercise of any
      right granted to the Bank in this Credit Agreement or any other Loan
      Document.

      8.4 Performance by the Bank. Should the Company fail to observe or perform
any covenant, duty, or promise by it to be observed or performed under the terms
of the Credit Agreement or the other Loan Documents, the Bank may, in its
discretion and without any obligation to do so, perform or attempt to perform,
such covenant, duty, or promise on behalf of the Company, and, in the event the
Bank should do so, the Company shall immediately upon demand reimburse the Bank
for all its expenses, disbursements, fees, and costs incurred in connection
therewith, with interest thereon at the rate specified in the Note. The Bank
does not assume and shall never have, except by its express written consent, any
liability or responsibility for the performance of any covenant, duty, or
promise of the Company hereunder.

      8.5 Attorneys and Accountants. In the exercise of their rights under this
Credit Agreement, the Note, or the other Loan Documents, the Bank may retain,
consult with, and otherwise utilize the services of counsel and of accountants.
Whenever attorneys or accountants are used by the Bank in the exercise of any of
its remedies under this Credit Agreement, the Note, or the other Loan Documents,
or otherwise, including collection or enforcement of this Credit Agreement, the
Note, or the other Loan Documents, or to enforce, defend, declare, or adjudicate
any of the Bank's rights under any of such instruments and documents or in any
of the Collateral, whether by suit, negotiation, or otherwise, such reasonable
attorneys' and accountants' fees as are incurred by the Bank in connection
therewith shall be payable by the Company to the fullest extent allowed by law
provided that an Event of Default has occurred hereunder or it is otherwise
determined that the Company is liable to the Bank hereunder or under the other
Loan Documents.


                                       30
<PAGE>
                                    ARTICLE 9

                                  MISCELLANEOUS

      9.1 Expenses. The Company agrees to reimburse the Bank, upon demand, for
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses), if an Event of Default has occurred hereunder or if it is
otherwise determined that the Company is liable to the Bank, for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal
expenses), incurred in enforcing or attempting to enforce the obligations of the
Company hereunder and under the Note and the other Loan Documents, which
obligations shall survive any termination of this Credit Agreement.

      9.2 Non-Liability of Bank. The relationship between the Company and the
Bank is, and shall at all times remain, solely that of debtor and creditor, and
the Bank neither undertakes nor assumes any responsibility or duty to review,
inspect, supervise, pass judgment upon, or inform the Company of any matter in
connection with any aspect or phase of the Company's businesses, operations, or
condition, financial or otherwise. The Company shall rely entirely upon its own
judgment with respect to all such matters, and any review of, inspection of,
supervision of, exercise of judgment on, or supply of information to the Company
by the Bank in connection with any such matter is for the protection and benefit
of the Bank, and neither the Company nor any third party is entitled to rely
thereon.

      9.3 Waivers, etc. No failure to exercise and no delay in exercising, on
the part of the Bank or any holder of the Notes, of any power or right hereunder
or under the Note or the Loan Documents and no course of dealing between the
Company and the Bank or the holder of the Note, shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right.

      9.4 Amendments. No amendment, modification, or supplement to this Credit
Agreement, the Note, or the other Loan Documents, or to any other document or
instrument executed or issued by any of the parties hereto in connection with
the transactions contemplated herein, shall be binding unless executed in
writing by all parties hereto; and this provision of this Credit Agreement shall
not be subject to waiver by any party and shall be strictly enforced.

      9.5 Taxes. The Company agrees to pay, and save the Bank harmless from all
liability for, any stamp or other taxes (otherwise than by a change in taxation
of a Bank's overall net income) which may be payable with respect to the
execution or delivery of this Credit Agreement, the Note, and the other Loan
Documents, which obligation of the Company shall survive the termination of this
Credit Agreement.

      9.6 Governing Law.

      THIS CREDIT AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE COMMONWEALTH OF KENTUCKY, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF. ANY SUIT, ACTION, OR PROCEEDING AGAINST THE
COMPANY WITH RESPECT TO THIS CREDIT AGREEMENT, THE NOTE, THE OTHER LOAN
DOCUMENTS OR THE COLLATERAL OR ANY PART THEREOF, MAY BE BROUGHT IN THE COURTS OF
THE COMMONWEALTH OF KENTUCKY, OR IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY, AS THE BANK IN ITS SOLE DISCRETION MAY ELECT, AND
THE COMPANY HEREBY CONSENTS TO THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE
OF ANY SUCH SUIT, ACTION, OR PROCEEDING. ANY SUIT, ACTION, OR PROCEEDING BROUGHT
BY THE COMPANY AGAINST


                                       31
<PAGE>
THE BANK WITH RESPECT TO THIS CREDIT AGREEMENT, THE NOTE, THE OTHER LOAN
DOCUMENTS OR THE COLLATERAL OR ANY PART THEREOF, SHALL BE BROUGHT IN ANY OF SUCH
COURTS; PROVIDED, HOWEVER, THAT THE BANK DOES NOT WAIVE THEIR RIGHT TO PETITION
FOR REMOVAL OF ANY ACTION BROUGHT IN THE COURTS OF THE COMMONWEALTH OF KENTUCKY
TO A UNITED STATES DISTRICT COURT SHOULD IT ELECT TO DO SO. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY AND ALL OBJECTIONS TO THE JURISDICTION OF SAID COURTS,
INCLUDING WITHOUT LIMITATION LACK OF PERSONAL JURISDICTION, LACK OF VENUE, AND
FORUM NON CONVENIENS. SERVICE OF ANY WRIT, PROCESS, SUMMONS, OR COMPLAINT UPON
THE COMPANY MAY BE MADE BY MAIL UPON IT AT THE ADDRESS STATED IN THIS CREDIT
AGREEMENT, UPON ANY REGISTERED AGENT FOR SERVICE OF PROCESS, OR BY ANY OTHER
METHOD PROVIDED BY LAW. SERVICE BY ANY SUCH METHOD SHALL BE CONCLUSIVELY DEEMED
TO BE LEGALLY SUFFICIENT IN ALL RESPECTS, AND THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION TO THE SERVICE OR SUFFICIENCY OF SERVICE OF ANY WRIT,
PROCESS, SUMMONS, OR COMPLAINT WHICH IS SERVED IN ACCORDANCE WITH THE FOREGOING.

      9.7 Section Titles. The section titles contained in this Credit Agreement
are inserted for convenience only and shall not govern the interpretation of any
of the provisions of this Credit Agreement.

      9.8 Reliance by the Bank. All covenants, agreements, representations, and
warranties made herein by the Company shall, notwithstanding any investigation
by the Bank, be deemed to be material to the Bank and to have been relied upon
by the Bank and shall survive the execution and delivery of this Credit
Agreement.

      9.9 Severability. The provisions of this Credit Agreement are severable.
If any provision hereof shall be held invalid or unenforceable in whole or in
part by a court of competent jurisdiction, the remainder of this Credit
Agreement shall not thereby fail or be rendered void or unenforceable, but shall
continue in full force and effect, with only the invalid or unenforceable
provision rendered a nullity and severed from this Credit Agreement.

      9.10 Survival of Representations and Warranties. All representations and
warranties made by the Company in this Credit Agreement shall survive the
execution hereof, the delivery of the Note and the making of all Warehouse
Advances, and the Bank shall be entitled to rely on such representations and
warranties at all times.

      9.11 Termination. Upon the Termination Date, the Warehouse Note shall be
immediately due and payable at which time no further Warehouse Advances shall be
made. This Credit Agreement shall terminate on the Termination Date.

      9.12 Counterparts; Effectiveness. This Credit Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Credit Agreement shall become effective upon the later of: (a) the receipt by
the Bank of a counterpart hereof executed by the Company; or (b) the delivery to
the Company of a counterpart hereof executed by the Bank.

      9.13 Entire Agreement. This Credit Agreement, the Note, the Loan Documents
and all other documents related to any of the foregoing or otherwise
contemplated hereunder embody the final and entire agreement between the parties
hereto relating to the subject matter hereof and supersede any and all prior
commitments, arrangements, representations, understandings and agreements and
any and all oral agreements


                                       32
<PAGE>
between the parties relating to the subject matter hereof. There are no
unwritten oral agreements between the parties.

      9.14 Exhibits and Schedules. The Exhibits and Schedules to this Credit
Agreement are a part hereof, and are hereby incorporated by reference as if
fully set out where first mentioned herein.

      9.15 Indemnity. The Company shall indemnify and hold harmless the Bank,
their respective successors, assigns, agents and employees, from and against any
and all claims, actions, suits, proceedings, reasonable costs, expenses,
damages, fines, penalties and liabilities, including, without limitation,
reasonable attorneys' fees and costs, arising out of, connected with or
resulting from (a) the operation of the business of the Company, (b) the Bank's
preservation or attempted preservation of the Collateral, or (c) any failure of
the Liens granted to the Bank in the Collateral to be or to remain perfected or
to have the priority as contemplated herein and in the Collateral Documents.
Provided, the Company shall have no obligation to indemnify the Bank for any
loss caused in whole or in part by the Bank's gross negligence or willful
misconduct. At the Bank's request, the Company shall, at its own cost and
expense, defend or cause to be defended any and all such actions or suits that
may be brought against the applicable Bank as a result of this Agreement, unless
the claim arose due to gross negligence or willful misconduct on the part of the
Bank and, in any event, shall satisfy, pay and discharge any and all judgments,
awards, penalties, costs and fines that may be recovered against the Bank in any
such action, plus all reasonable attorneys' fees and costs related thereto to
the extent permitted by applicable law; provided, however, that the Bank shall
give the Company, to the extent the applicable Bank seeks indemnification from
the Company under this SECTION 9.15, written notice of any such claim, demand or
suit as soon as practicable after the Bank has received written notice thereof,
and the Bank shall not settle any such claim, demand or suit, if the Bank seeks
indemnification therefor from the Company, without first giving written notice
to Company of the Bank's desire to settle and obtaining the written consent of
Company to the same, which consent Company hereby agrees not to unreasonably
withhold.

      9.16 Role of the Bank. Notwithstanding any of the terms or conditions
hereof or of the other Loan Documents to the contrary, the Bank shall not have,
and by their execution and acceptance of this Credit Agreement hereby expressly
disclaim, any obligation or responsibility for the management, conduct or
operation of the business and affairs of the Company. Any term or condition
hereof, or of any of the other Loan Documents, permitting the Bank to take or
refrain from taking any action with respect to the Company or the Collateral
shall be deemed solely to permit the Bank to audit and review the management,
operation and conduct of the business and affairs of the Company and to maintain
and preserve the security given by the Company to the Bank, for the Secured
Obligations, and may not be relied upon by any other Person. Further, the Bank
shall not have, have not assumed, and by their execution and acceptance of this
Credit Agreement hereby expressly disclaim, any liability or responsibility for
the payment or performance of any indebtedness or obligation of the Company, and
no term or condition hereof, or of any of the other Loan Documents, shall be
construed otherwise.

      9.17 Notices. All notices required or permitted to be given hereunder
shall be given in writing and shall be personally delivered or sent by
telecopier, by express courier service or by registered or certified United
States mail, return receipt requested, postage prepaid, addressed as follows (or
to such other address as to which any party hereto shall have given the other
written notice):


                                       33
<PAGE>
               If to the Company:   THE NEW YORK MORTGAGE COMPANY, LLC
                                    304 Park Avenue South, 7th Floor
                                    New York, New York 10010
                                    Attn: Steven B. Schnall, President
                                    Ph:      (212) 634-9449
                                    Fax:     (212) 779-3943

               If to the Bank:      National City Bank of Kentucky
                                    421 West Market
                                    Louisville, Kentucky 40202
                                    Attn:  Paul A. Best, Senior Vice President
                                    Ph:      (502) 581-4148
                                    Fax:     (502) 581-4154

      All notices hereunder shall be deemed given upon the earliest of (a)
actual delivery in person or by telecopier, (b) one (1) Business Day after
delivery to an express courier service, or (c) five (5) Business Days after
having been deposited in the United States mails, in accordance with the
foregoing. Any notice of an Event of Default to the Company shall be sent by
personal delivery, express courier service or by registered or certified mail in
accordance with this SECTION 9.17. The parties hereto agree that they shall use
reasonable efforts to send all notices hereunder by telecopier or express
courier service prior to utilizing the United States mail or actual delivery in
person for such notice purposes.

      9.18 Assignment. This Credit Agreement may not be assigned by the Company.


                                       34
<PAGE>
                                   ARTICLE 10

                         ASSIGNMENTS AND PARTICIPATIONS

            The Bank may, at no additional cost to the Company, grant
participations in all or any part of the outstanding principal balance of its
Warehouse Note to one or more Persons provided that (i) any such disposition
shall not, without the consent of the Company, require the Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify the Warehouse Advances or the Note under the blue sky law of any state;
(ii) the holder of any such participation shall not be entitled to require the
Bank to take or omit to take any action hereunder; and (iii) any Person to whom
such disposition has been made shall not be considered a "Bank" for purposes of
this Credit Agreement. The Bank shall, as between the Company and the Bank, be
relieved of any of its obligations hereunder as a result of any granting of
participations in all or any part of the outstanding principal balance of its
Warehouse Note or other obligations owed to the Bank.

                                   ARTICLE 11

                              WAIVER OF JURY TRIAL

      THE COMPANY AND THE BANK HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND THE BANK ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR EACH SUCH PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT THE COMPANY AND THE BANK HAVE ALREADY RELIED ON THE WAIVER IN
ITS RELATED FUTURE DEALINGS WITH THE OTHER. THE COMPANY AND THE BANK FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS CREDIT
AGREEMENT OR THE OTHER LOAN DOCUMENTS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


                                       35
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

      THE NEW YORK MORTGAGE COMPANY, LLC        NATIONAL CITY BANK OF KENTUCKY


      By: /s/ Steven B. Schnall                 By: /s/ Michael A. Johnson
         _______________________________           _____________________________

      Title: President                          Title: Vice President
             ___________________________              __________________________

      (the "Company")                           (the "Bank")


                                       36