Document:

Mortgage Warehouse Loan and Security Agreement dated as of June 1, 2003

 EXHIBIT 10.2 
  
 MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT 
  
 THIS AGREEMENT entered into effective as of this day, June 1, 2003, by and between Duxford Financial, Inc. and/or
Bayport Mortgage, L. P., a California Corporation_with offices at 1300 Dove Street, Suite 200, Newport Beach, CA 92660 (hereinafter sometimes referred to as “Borrower”) and First Tennessee Bank, 165 Madison
Ave., Memphis, Tennessee (hereinafter referred to as “Bank”). 
  
 W I T N E S S E T H 
  
 WHEREAS, Borrower is engaged in the business of
originating and/or acquiring mortgage loans secured by mortgages upon improved, residential real property, including mortgage loans insured or to be insured by the Federal Housing Administration (FHA), loans guaranteed or to be guaranteed by the
Veterans Administration (VA) and conventional loans and 
  
 WHEREAS, Borrower
desires to borrow money from Bank under the Line of Credit to assist in funding the origination and/or acquisition of such mortgage loans, granting unto the Bank a first lien security interest in (i) each such mortgage loan (ii) all contract and
related rights with respect to each such Lock related thereto (iii) the proceeds from the sale of such mortgage loans (iv) all deposit accounts of Borrower maintained at Bank and (v) other collateral (collectively, “Collateral”) to secure
such Line of Credit, and the Bank is willing to provide financing to assist in funding the origination and/or acquisition of such mortgage loans with advances under the Line of Credit on the security of such Collateral and 
  
 WHEREAS, this Agreement has been entered into by the parties for the purpose of confirming
the terms and conditions under which all advances under the Line of Credit shall be made by the Bank on behalf of the Borrower to assist in funding the origination and/or acquisition of such mortgage loans. 
  
 NOW, THEREFORE, the parties mutually agree as follows: 
  
 1. DEFINITIONS 
  
 “Advance” shall mean any provision of money or credit to or for the benefit of Borrower pursuant to this Agreement. 
  
 “Advance Amount” shall mean the lesser of: 
  

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

  

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

  

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

  
 “Advance Date” shall mean the date the Closing Check is presented to the Bank’s Mortgage Warehouse Lending Division for
payment in accordance with Section 2.3. hereof. 
  
 “Advance Documents” with respect to any funding, shall mean the documentation described in Section 2.3.5. 
  
 “Advance Request and Supplemental Closing Instructions” shall mean that document to be executed by Borrower and Closing Agent
with respect to each Eligible Mortgage Loan to be funded hereunder and which shall serve as a cash advance request hereunder by Borrower, in the form of Exhibit A attached hereto, which may be changed from time to time at the sole discretion of the
Bank. 
  
 “Bailee Letter” shall mean a
letter in the form of Exhibit C attached hereto which shall be attached to the front of every Mortgage Note by the Bank and used by the Bank and its bailees for the purposes stated therein. 
  
 “Bank” shall mean First Tennessee Bank, Memphis,
Tennessee. 
  
 “Base Rate” shall mean
the Bank’s base commercial rate of interest which is established from time to time by the Bank, each change in the Base Rate to become effective, without notice to the Borrower, on the effective date of each change in the Base Rate. 

 
 “Business Day” shall mean 8:30 AM until 4:00
PM, Central Time, any Monday, Tuesday, Wednesday, Thursday or Friday on which the Bank is open for the transaction of business in Memphis, Tennessee. All payments to the Warehouse Line of Credit received after 4:00 PM shall be included in the
following Business Day. 
  
 “Closing
Agent” shall mean the attorney or title company designated by the Borrower to close the Eligible Mortgage Loan on behalf of Borrower. 
  
  

	

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 “Closing Check” shall mean a check or wire transfer drawn on the Warehouse
Clearing Account and payable to the closing agent for the sole purpose of closing or acquiring an Eligible Mortgage Loan. 
  
 “Collateral” shall mean each Mortgage Note and such other collateral as may be pledged to Bank pursuant to this Agreement as
described in section 2.8.1. 
  
 “Combined
Net Worth” shall mean that sum calculated as follows from borrower and guarantor financial statements, each prepared as of the same date: Borrower’s Tangible Net worth plus Guarantor(s)’ Tangible Net Worth minus the sum of the
following, if included in the Guarantor’s Tangible Net Worth: assets held jointly unless all owners guaranty the debt secured hereby, Guarantor’s equity in the Borrower, receivables due from the Borrower, unverified and unrealized
appreciation in personal residence(s), equity in automobiles and other personal property, and unsecured receivables, MINUS payables due to Borrower. 
  
 “Commitment Letter” shall mean that letter from the Bank to the Borrower which describes the terms under which this Agreement
is being entered into and which shall be considered a part hereof, a copy of which is attached hereto as Exhibit “F”. 
  
 “Eligible Mortgage Loan” shall mean each residential loan evidenced by a Mortgage Note, Mortgage and related documents, which
has been originated or acquired by the Borrower, and which has been, or is to be, pledged to the Bank as Collateral for the Line of Credit, and which meets all criteria specified in the Schedule of Eligible Mortgage Loan Criteria attached hereto as
Exhibit “G”, and which may change from time to time at the sole discretion of the Bank. 
  
 “Eligible Prime Mortgage Loan” shall mean an Eligible Mortgage Loan which conforms to FHA, VA, FHLMC, or FNMA guidelines. An
Eligible Mortgage Loan which conforms to all FNMA guidelines except maximum loan size and debt ratios shall be considered to be an Eligible Prime Mortgage Loan. 
  

“Eligible Sub-prime Mortgage Loan” shall mean any Eligible Mortgage Loan which is not an Eligible Prime Mortgage Loan.

  
 “Funding Date” shall mean the
earlier of: 
  

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

  

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

  

“Guarantor(s)” shall mean None. 
  
 “Line of Credit” or “Loan” shall mean the credit facility governed hereby. 

 
 “Liquidity” shall mean the sum of all Borrower
and Guarantor assets owned and held in cash or accounts which can be converted to cash within 30 days, including but not limited to checking accounts, money market or savings, certificates of deposit, and marketable securities. IRA’s owned and
held in assets which can be converted to cash within 30 days will be discounted by a factor of 40%. 
  
 “Loan Account” shall mean that account established by the Bank pursuant to Section 2.2. hereof. 
  
 “Lock” with respect to any Eligible Mortgage Loan
shall mean the obligation of a Qualified Investor to Purchase such Eligible Mortgage Loan upon its presentation to the Qualified Investor by or on behalf of the Borrower, as well as the full amount which such Qualified Investor has committed to pay
for the same. 
  
 “Master Promissory
Note” shall mean that note of even date herewith described in Section 2.2., a copy of which is attached hereto as Exhibit “B”, and any extensions, modifications, and renewals thereof. 
  
 “Maximum Line of Credit” shall be Twenty
Million and no/100 dollars Dollars ($20,000,000.00). 
  
 “Mortgage” shall mean or refer to the deed of trust, mortgage or other instrument granting to the Borrower, or the holder of such deed of trust, mortgage or instrument, a mortgage lien upon the property
therein described. 
  
 “Mortgage Note
Rate” shall mean the interest rate stated on each Mortgage Note. 
  
 “Mortgage Note” shall mean an original promissory note evidencing an Eligible Mortgage Loan. 
  

	

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 “Mortgagor” shall mean that person or persons executing and delivering the
Mortgage Note and Mortgage. 
  
 “One Month
LIBOR” shall mean the London Inter-Bank Offered Rate for a one month term as published in the Wall Street Journal, each change in One Month LIBOR to become effective, without notice to the Borrower, on the date of publication of each such
change. 
  
 “Purchase” shall mean the
act of a Qualified Investor or other person or entity providing funds and remittance advice to the Bank in accordance with the wire transfer instructions set forth on the applicable Bailee Letter in an amount and in a manner sufficient to cause Bank
to release its security interest as provided hereunder. 
  
 “Purchase Date” shall mean the Business Day upon which the Bank receives both 1) the Purchase Price, plus all accrued interest and other payments, if any, due on the Purchase of the Eligible Mortgage Loan,
and 2) remittance instructions pertaining to such purchase proceeds. 
  
 “Purchase Price” shall mean the dollar amount the Qualified Investor has contracted or agreed to pay for the Purchase of the particular Eligible Mortgage Loan, not including any premium or other sums
allocated to or for the purchase of servicing rights and not including any sums for any interest that has or will have accrued on the Eligible Mortgage Loan from the date it is closed by the Closing Agent until the date the Eligible Mortgage Loan is
actually purchased by the Qualified Investor. 
  
 “Qualified Investor” shall mean an investor listed on Exhibit E attached hereto and approved by the Bank to Purchase Mortgage Loans. 
  
 “Tangible Net Worth” shall mean total assets minus total liabilities MINUS the sum of: goodwill, organization costs,
receivables due from parties related to this credit, and other assets as specified by Bank as unacceptable, PLUS payables due to parties related to this credit, all measured in accordance with GAAP. 
  
 “Termination Date” shall mean the first to occur
of (i) the maturity date stated in the Master Promissory Note, or (ii) the occurrence of an Event of Default. 
  
 “Warehouse Clearing Account” shall mean that account at Bank on which the Closing Checks will be drawn to fund, in whole or in
part, the closing and/or acquisition of Eligible Mortgage Loans. 
  
 All financial
terms used herein shall have the meaning ascribed thereto in accordance with generally accepted accounting principles. 
  
 2. WAREHOUSE LINE USAGE. 
  

	2.1.	 	Maximum Line. The sum of all outstanding advances under this Agreement shall not exceed the Maximum Line of Credit. Bank and Borrower agree that $10,000,000.00 of the
Maximum Line of Credit shall be offered by the Bank on a committed basis, and that $10,000,000.00 of the Maximum Line of Credit shall be offered by the Bank on an uncommitted basis. Requests for advances of amounts offered on an uncommitted
basis may or may not be honored by the Bank at the Bank’s sole discretion. Subject to the foregoing, the total amount of funds to be provided to the Closing Agent on Borrower’s behalf to assist in funding the origination of an Eligible
Mortgage Loan shall not exceed the Advance Amount, unless otherwise agreed upon by Bank in writing. Bank shall have no obligation to make any advance under this Line of Credit against the security of any residential loan, the original principal
amount of which exceeds five hundred thousand dollars ($500,000). In no case shall Bank have any obligation to make any Advance under this Line of Credit to the extent that such action may, in the judgment of the Bank, violate the legal lending
limits applicable to Bank imposed by any applicable laws, rules, regulations or interpretations thereof. Borrower is aware that Advances made under the Line of Credit must be aggregated with other loans to Borrower and certain affiliates of Borrower
for purposes of calculating Bank’s legal lending limit. Borrower represents and warrants to Bank that Borrower does not exceed Bank’s loan to one borrower limits. 

  

	2.2.	 	Loan Account. Borrower shall execute a Master Promissory Note in the amount of the maximum Line of Credit and Bank shall maintain a Loan Account for the Borrower which shall
be debited to the extent of any loans to or Advances for the account of Borrower made by Bank pursuant to this Agreement. Borrower’s Loan Account shall be credited with the proceeds of the sale of Eligible Mortgage Loans to Qualified Investors
which are received in good funds by Bank, and with such other funds actually received by Bank to reduce Borrower’s indebtedness under the Line of Credit. Bank shall render to Borrower a monthly statement of Borrower’s Loan Account
established pursuant to this 

  

	

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 Agreement showing all debits and credits thereto, which statement of account shall be considered correct
and binding upon Borrower unless Borrower should give to Bank, within seven (7) days from receipt of such statement, written notice of any exceptions thereto, each of which exception shall be specified in such notice. It is the intention of the
parties that Borrower’s indebtedness under this Agreement shall be evidenced by this Agreement and the Master Promissory Note. 
  

	2.3.	 	Funding of Line. Bank will provide a Warehouse Clearing Account upon which Borrower will draw funds either by check or by wire transfer in an amount equal to the Advance
Amount of the Eligible Mortgage Loan to be closed or acquired in accordance with Bank’s then-current funding procedures, which procedures Bank may change from time to time at its sole discretion. Advances under the Line of Credit will be made
by the Bank (assuming all conditions precedent thereto have been met or waived by the Bank) to cover the Closing Check(s) given by Borrower to close or acquire the applicable Eligible Mortgage Loans. The Bank will charge a warehouse fee of
$40.00 for each Advance under the Line of Credit funded via check. The Bank will charge a warehouse fee of $125.00 for each Advance under the Line of Credit funded via wire transfer. However, the Bank’s obligation to fund Advances
under the Line of Credit to cover the Closing Check presented to Bank in respect to any Eligible Mortgage Loan is subject to satisfaction of the following conditions precedent: 

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	2.3.5.5.	 	A copy of the HUD-1 Settlement Statement 

  

	 	2.3.5.6.	 	A Certified True Copy of the Mortgage 

  

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

  

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

  

	

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 All documentation shall be satisfactory in form and substance to Bank. All such documentation requiring
the signature of the Borrower shall have been signed by a duly authorized officer of Borrower, and Bank shall be and it is hereby so authorized, to rely upon any signature on any such document as having been authorized. Bank may, in its sole and
absolute discretion, agree to and make an Advance to cover the Closing Check presented with regard to an Eligible Mortgage Loan(s) regardless of whether all of the documents required by Section 2.3.5. have been delivered to Bank within two (2)
Business Days after the Eligible Mortgage Loan is closed if the requirements of Sections 2.3.1. through 2.3.4. have been met provided, however, that Bank’s determination to waive the requirements of the delivery of the Advance
Documents to the Bank in accordance with Section 2.3.5. and to Advance funds sufficient to cover the Closing Check issued to the Closing Agent in respect to the particular Eligible Mortgage Loan(s) shall not be deemed to be or construed as a waiver
of such term or condition with respect to any other Eligible Mortgage Loan or Loans, nor shall such operate as a waiver of Borrower’s breach of this Agreement by its failure to fulfill all conditions precedent. In such event, notwithstanding
Bank’s decision to make the Advance sufficient to cover the Closing Check, Bank still may, in its sole and absolute discretion, declare an Event of Default hereunder and take such steps or actions hereunder or under the Master Promissory Note
as are available, including, but not limited to, refusing to make any further Advances under this Agreement and/or accelerating the maturity of the Master Promissory Note. 
  
 Notwithstanding the occurrence of Termination Date, the Bank, at its sole and absolute discretion, may thereafter permit the
Borrower to draw funds hereunder in accordance with the terms, conditions and provisions hereof. Any draws permitted by Bank after the Termination Date shall not constitute an extension, renewal or modification of the Line of Credit or the
Termination Date, the waiver by Bank of any Event of Default, or otherwise obligate the Bank to permit subsequent draws hereunder. 
  

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

  

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

  

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

  

	 	2.6.1	 	Forty-Five (45) days from the Funding Date of the Eligible Mortgage Loan, or 

  

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

  

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

  

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

  

	 	2.6.5.	 	Termination of this Agreement. 

  
 Interest on Line of Credit. Borrower agrees to pay interest from the Funding Date until the repayment of such Advance in accordance with Section
2.6., above. The disbursed and unpaid principal balances of the indebtedness secured hereby shall bear interest prior to repayment at a variable rate per annum (“Warehouse Rate”) which shall, from day to day, be equal to the lesser of (a)
the maximum effective variable contract rate of interest (“Maximum Rate”) which Bank may from time to time lawfully charge, or (b) a rate equal to the Mortgage Note Rate. However, if the Mortgage Note Rate is greater than
One Month LIBOR + 2.75%, the Warehouse Rate shall be equal to One Month LIBOR + 2.75%, or if the Mortgage Note Rate is less than One Month LIBOR, the Warehouse Rate shall be equal to One Month LIBOR. It is agreed that
interest on the Master Promissory Note shall be calculated on the basis of a 365 (366 in Leap year) day year unless calculation on that basis would result in Bank receiving interest at a rate in excess of the maximum rate of interest which Bank is
permitted by law to contract for and charge, in which case such indebtedness shall bear interest at such maximum rate. The indebtedness shall also bear interest after maturity 
  

	

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	 	(whether	 	by demand, acceleration or otherwise) at the maximum rate of interest which Bank is permitted by law to contract for and charge thereon. 

  

	2.8.	 	Bank’s Security Interest and Lien. 

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

 

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

  

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

  

	

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

  

	 	2.8.2	 	Collateral Assignments. Notwithstanding the security interest granted by Borrower to Bank in the Collateral, Borrower understands and agrees that should Bank request such in
writing, Borrower will execute and deliver to its Closing Agent(s) for subsequent delivery to Bank, a separate Collateral Assignment of Notes, Deeds of Trust/Mortgages and Security Agreement with respect to each Eligible Mortgage Loan to be funded,
in whole or in part with an Advance or Advances hereunder. Borrower also will execute and deliver with this Agreement a separate Collateral Assignment of Contract Rights and Security Agreement with respect to each Qualified Investor to which it will
sell Eligible Mortgage Loans funded, in whole or in part hereunder, and for each new Qualified Investor with which Borrower contracts hereafter to sell Eligible Mortgage Loans to be funded, in whole or in part hereunder. Notwithstanding the fact
that separate instruments will be used, the security interests granted herein shall be in addition to the security interests granted in each such document, and not in substitution or cancellation thereof, so that Bank’s security interest in the
Collateral shall be construed and expanded to the fullest extent possible. 

  

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

  

	 	2.8.4.	 	Right of Setoff. Borrower acknowledges that in addition to the Collateral which Borrower has pledged to Bank to secure its obligations to the Bank pursuant to this Agreement,
and any other borrowings, Bank shall have such other or additional liens and rights as may be available, including, but not limited to, the right of setoff against all of Borrower’s right, title and interest in and to the balance of every
deposit account of Borrower at 

  

	

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Bank, now or at anytime hereafter existing. Bank shall have a right to offset any amounts owed by the Borrower under this Agreement and/or the Master
Promissory Note against amounts held in every deposit account of the Borrower at the Bank. Borrower acknowledges and agrees that in addition to such other rights as Bank may have, and not by way of limitation, should Bank in good faith ever deem
itself to be insecure at any time in relation to any obligations of Borrower to Bank, whether arising in connection with this Agreement or otherwise, any and all obligations and liabilities of Borrower to Bank shall become due and payable forthwith
without notice or demand and Borrower hereby expressly authorizes Bank to apply any balance of deposits and any sums credited by or due from Bank to Borrower in general account or otherwise, to the payment of any and all obligations and liabilities
of Borrower to Bank. 

  

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

  
 3. WARRANTIES, COVENANTS AND REPORTS OF BORROWER 
  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	3.1.7.	 	Use of Proceeds. Borrower will not request an Advance under the Line of Credit or otherwise use or attempt to use the proceeds of any such Advance other than to fund the
origination or acquisition of the specific Eligible Mortgage Loan for which Borrower requests funding under the Line of Credit. In addition, Borrower will not use or draw a Closing Check for any other purpose but to fund all or some portion of the
closing or acquisition of the Eligible Mortgage Loan for which the documents required by Section 2.3.4. have been provided to Bank, and no Closing Check shall be written for an amount which exceeds the Advance Amount. 

  

	 	3.1.8.	 	Qualified Closing Agent. Borrower will employ or engage only those persons or entities as a Closing Agent for any Eligible Mortgage Loan to be funded with an Advance under
the Line of Credit as shall not have been disapproved by Bank prior to the date the Eligible Mortgage Loan is scheduled to close. Borrower represents 

  

	

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and warrants that as to each Closing Agent who is an attorney, Borrower will have satisfied itself as to the character, standing, integrity, and ability of
such Closing Agent and, at a minimum, will have in its possession an insured attorney closing letter or similar certification for the proposed Closing Agent issued by a reputable title company. In no event, however, shall a Closing Agent be an
employee, director, officer, shareholder or interest holder of Borrower, or otherwise an affiliate of Borrower. 

  

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

  

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

  

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

  

	 	3.1.11.1	 	Borrower’s Tangible Net Worth will at all times remain above $1,500,000.00. 

  

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

  

	 	3.1.11.3	 	Combined Net Worth shall at all times meet or exceed $1,500,000.00. 

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	3.2.5.	 	Maintain Security Interest of Bank. Borrower will furnish to Bank such documents as Bank may at any time deem necessary or desirable to perfect and maintain in perfected
status Bank’s security interest in the 

  

	

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Collateral hereunder, to enable Bank to enforce any Eligible Mortgage Loan or Lock, or to enable Bank to make direct sales and transmittals of Eligible
Mortgage Loans to Qualified Investors, and have the proceeds of such sales remitted directly to Bank. 

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	3.4.1.	 	To be provided annually, within 90 days of the fiscal year end of Borrower: 

  

	 	-	 	Audited financial statements of Borrower prepared in accordance with GAAP. 

  

	 	3.4.2.	 	To be provided quarterly, within 45 days of the end of Borrower’s fiscal quarter: 

  

	 	-	 	Unaudited financial statements of Borrower, prepared in accordance with GAAP. 

  

4. LOCKS 
  
 Borrower agrees to have a Lock in its possession related to each Eligible Prime Mortgage Loan to be originated or acquired hereunder, and to comply with all Qualified Investor requirements in order to maintain each
such Lock in full force until the Purchase Date. 
  
 4.1.   Compliance with Locks. Prior to funding any Advance requested under the Line of Credit, Bank may require (i) evidence of a Lock with respect to the Eligible Mortgage Loan to be funded by such Advance, and (ii)
that it be satisfied that Borrower can meet the requirements of each such Lock, and (iii) that notice has been given to the 
  

	

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 Closing Agent of Bank’s security interest in the Collateral, and (iv) that the Eligible Mortgage
Loans can be and will be assigned to Qualified Investors directly by Bank, and (v) that Bank will be entitled and able receive the Purchase Price therefor under each Lock. 
  
 4.2. Sale of Eligible Mortgage Loans. With respect to each Eligible Mortgage Loan, Borrower agrees that: 
  

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

  

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

  

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

  
 5. RESERVED 
  
 6. EVENTS OF DEFAULT: REMEDIES 
  

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

  

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

  

	

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 records of Bank at least five (5) days prior to the time of the sale, disposition or other event or thing
giving rise to the requirement of notice. 
  
 6.3.    Deposits, Set-off, Etc. It is further agreed that any moneys or other property at any time in the possession of Bank belonging to Borrower, and any deposits, balance of deposits or other sums at any time
credited by or due from Bank to Borrower, may at all times, at the option of Bank, be held and treated as collateral security for the payment of liability of Borrower to Bank as provided hereunder and under the terms of the Master Promissory Note,
and Bank may, at its sole option and at any time or from time to time after default, set off the amount due or to become due hereon against any claim of Borrower against Bank. To effect these rights Borrower agrees, upon request by Bank, immediately
to endorse, sign and execute all necessary instruments as Bank may request. 
  
 6.4.    Exercise of Rights and Remedies. No delay or omission to exercise any right, remedy or power shall impair the right, remedy or power nor shall be construed to be a waiver of any
Event of Default or an acquiescence therein. No waiver of any Event of Default shall extend to any subsequent Event of Default. 
  
 7. POWER OF ATTORNEY 
  
 Borrower shall execute a power of attorney substantially in the form attached as Exhibit D. 
  
 8. TERMINATION 
  
 This Agreement shall terminate on the Termination Date, unless terminated earlier due to a breach by Borrower provided, however, the indebtedness arising under this Agreement shall mature as provided in Section 2.6.
hereof. Termination of this Agreement shall not affect the rights, liabilities, and obligations of the parties with respect to Eligible Mortgage Loans funded prior to or after termination, or with respect to any security therefore. At the
termination, Borrower shall pay to Bank in full all obligations which may have arisen under this Agreement, specifically including the payment of the debit balance of the Loan Account and the Master Promissory Note. 
  
 9. INDEMNITY 
  
 Borrower shall indemnify Bank and hold Bank harmless against each and every cost, loss, or expense, including court costs and
attorney’s fees, arising from any failure of Borrower to comply with any governmental or regulatory requirements in connection with any Eligible Mortgage Loan. 
  
 10. MISCELLANEOUS 
  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

	10.8.	 	Expenses of Enforcement. Borrower agrees to pay all reasonable attorneys’ fees, expenses and other costs and charges incurred in the execution of the transaction
described herein, including, but not limited to, the documentation 

  

	

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thereof, the collection of any indebtedness arising under this Agreement, the enforcement of the Bank’s rights hereunder, the protection and
preservation of any Collateral securing any indebtedness hereunder, the perfection of any security interest or lien contemplated hereby, and maintaining the perfected status of the same. Borrower’s Loan Account may be debited by the amount of
such expenses the payment of which shall be secured in the same manner as loans made hereunder. 
  
 IN WITNESS WHEREOF, the parties, through their authorized officers have executed this Agreement effective as of the date set out above on
this 23rd day of June, 2003. 
  
  

	 First Tennessee Bank
	 	 	 	Duxford Financial, Inc.
					
	By:	 	 /s/    GAITHER DAUGHERTY

	 	 	 	By:	 	 /s/     RICHARD E. FRANKEL

	 Its:
	 	 Vice President
	 	 	 	 Its:
	 	 Chairman

					
	 	 	 	 	 	 	By:	 	 /s/     MARK CARVER

	 	 	 	 	 	 	 Its:
	 	 President

				
	 	 	 	 	 	 	Bayport Mortgage L.P.
					
	 	 	 	 	 	 	By:	 	 /s/     RICHARD E. FRANKEL

					
	 	 	 	 	 	 	 Its:
	 	 Chairman

					
	 	 	 	 	 	 	By:	 	 /s/     MARK CARVER

					
	 	 	 	 	 	 	Its:	 	 President

  

	

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	  	Page 13 of 24

 EXHIBIT A 
 ADVANCE REQUEST and 
 SUPPLEMENTAL CLOSING INSTRUCTIONS 
 Duxford Financial, Inc. and/or Bayport Mortgage, L. P. 
  

	 I. ADVANCE REQUEST
	  	 	 	 	  	 	  	 	 	 
	 A. Borrower & Property Address
	  	 B. Mortgage Loan description:
	  	 Loan Number:
                                       
 

	 	  	 Loan Type: FHA/VA
	 	 Jumbo
	  	 Conventional Conforming
	 	 Conventional Non-Conforming

	
	  	 
	 Last Name                    First Initial
	  	 Amt of
Note: $                    
	 	 	  	 	  	For Conventional Non-Conforming Only:	 	 
	 	  	 Date of Note:                     
	 	 	  	 	  	 Lien Position:            1st            2nd
	 	 
	
 Address
	  	 Interest
Rate:                         
	 	 	  	 	  	 FICO
Score:                    
	 	 
						
	 	  	 Pymt. Term (Months)
            
	 	 	  	 	  	 Loan to Value Ratio:             
	 	 
	
	  	 	 	 	  	 	  	 Debt Ratios:                /               
 
	 	 
	 City                     ST
            Zip
	  	 Investor:
                    
	 	 	  	 	  	 	 	 
	 	  	 	 	 	  	 	  	 	 	 
	 Cashier’s Check To Be Payable EXACTLY As
Follows:                                      
                                        
          
	 	 
	         ____________________________________________________________________________
	  	 	 	 	  	 	  	 	 	 
	 Title
Insurer:                                      
                                        
                                        
                                        
  
	  	 

  
 The undersigned authorized
representative of Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (“Mortgage Company”) hereby requests an advance under that certain Mortgage Warehouse Loan and Security Agreement (the “Agreement”), between Mortgage
Company and First Tennessee Bank, Memphis, Tennessee (the “Bank”) and hereby certifies each of the following: 1) all of the information set forth above is true and correct, and 2) the property which will be used to secure the above
Mortgage Loan is one-to-four family residential real property ready for immediate occupancy, and 3) the mortgage loan is an Eligible Mortgage Loan as that term is defined within the Agreement. Pursuant to the Agreement, the undersigned authorized
representative hereby 1) pledges, assigns, transfers and grants to Bank a security interest in the Mortgage Loan described above and all related Collateral as defined in the Agreement to secure the indebtedness and obligations of the Mortgage
Company to the Bank, and 2) agrees to hold all documents related to the Mortgage Loan funded hereby in trust for and on behalf of Bank until delivered to Bank in accordance with the Agreement, and 3) hereby certifies that it has in its possession an
insured closing letter pertaining to the closing agent used to close this Mortgage Loan, and 4) the closing agent is not in any way affiliated with either the Mortgage Company or the borrower. 
  
 Duxford Financial, Inc. and/or Bayport Mortgage, L. P. 

		
	By:	 	  

	 	 	 Authorized Representative

  

 MORTGAGE COMPANY’S SUPPLEMENTAL CLOSING INSTRUCTIONS 

  
 In addition to all other loan closing instructions, and superceding any instructions to the contrary, Duxford Financial, Inc. and/or Bayport Mortgage, L. P. hereby
instructs the closing agent (whether attorney or title company) as follows: 
  

	 	1.	 	As Closing Agent in this transaction, you are hereby expressly authorized by Duxford Financial, Inc. and/or Bayport Mortgage, L. P. to close the loan described in Section I.A.,
above, (the “Mortgage Loan”) as its agent in the loan closing. However, if you do not agree to follow these Supplemental Closing Instructions or will not sign this document, you are not authorized to close the Mortgage Loan nor to accept
the proceeds from the Mortgage Loan. 

  

	 	2.	 	Please be aware that First Tennessee Bank (the “Bank”), as warehouse lender in this transaction, will have a first priority security interest in the Mortgage Loan
to be closed herewith. On behalf of the Bank, Duxford Financial, Inc. and/or Bayport Mortgage, L. P. hereby instructs you to hold the note evidencing the Mortgage Loan for the benefit of the Bank, and to transmit same to the delivery address
indicated below, and to no other address except pursuant to written instructions delivered to you by Bank. 

  

	 	3.	 	After consummation of the loan closing, please sign this document indicating that the loan described in 1.A. has been closed and that all loan closing instructions have been
followed. 

  

	 	4.	 	Within 1 business day after settlement, please sign below and deliver this document, AND the original note evidencing the Mortgage Loan, AND such other documents as the Mortgage
Company may direct you to deliver to the address indicated below. 

  

	 	5.	 	Submit the mortgage or deed of trust to the proper recording agent for recording, thereby creating a valid lien on the property described in Section 1.A., above, subject only to
those encumbrances shown in Schedule B of the title insurance binder. 

  

	 	6.	 	The documents described in paragraph 4 above must be sent via overnight courier as soon as reasonably practical after disbursement of the Mortgage Loan but in no event later than
the first business day after the loan is disbursed. If for any reason you should be unable to provide these documents by the second business day after the date the loan is closed, or should you identify any problems with any of the documents, you
should then immediately contact the Bank’s Vice President of Mortgage Warehouse Lending at (888) 297-0222 and inform such person of the delay, reasons therefor or problems identified. 

  

	 Bank’s Address:
	  	First Tennessee Bank	 	Mortgage Co.’s Address	  	Duxford Financial, Inc. and/or Bayport Mortgage, L.P.
	 	  	 Mortgage Warehouse Lending
 7640 Poplar,
Suite 210
 Germantown, TN 38138
	 	 	  	 In Trust For First Tennessee Bank
 1300 Dove Street, Suite 200
 Newport Beach, CA 92660

  

 CLOSING ATTORNEY OR TITLE COMPANY SIGNATURE 

  
 Receipt of these Supplemental Closing Instructions is hereby acknowledged. 
  

	
	  	

  

	

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	  	Page 14 of 24

	Closing Attorney (if any)	 	By	 	Title Company (if any)	  	By

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 15 of 24

 EXHIBIT B 
 MASTER PROMISSORY NOTE 
  

	$20,000,000.00	 	June 1, 2003
	 	 	Memphis, Tennessee

  
 FOR VALUE RECEIVED, the undersigned
(“Borrower”)(jointly and severally if more than one) promises to pay to the order of First Tennessee Bank, Memphis, Tennessee (“Bank”), or to the order of any subsequent holder hereof, in lawful money of the United States of
America, the principal sum of the aggregate unpaid principal amount of all advances pursuant to that certain Mortgage Warehouse Loan Agreement of even date herewith (“Agreement”) between the undersigned and the Bank, together with interest
thereon at the rate hereinafter specified from the Funding Date of each advance. The maximum aggregate unpaid principal amount of all advances pursuant to the Agreement shall be $20,000,000.00 unless the Bank, in its sole discretion, honors
Borrower requests for aggregate advances in excess of $20,000,000.00. 
  
 Capitalized terms not defined herein shall have the meaning defined within the Agreement. 
  
 Subject to the limitations hereinafter set forth, the disbursed and unpaid principal balances of the indebtedness evidenced hereby shall bear interest prior to repayment at a variable rate per annum (“Warehouse
Rate”) which shall, from day to day, be equal to the lesser of (a) the maximum effective variable contract rate of interest (“Maximum Rate”) which Bank may from time to time lawfully charge, or (b) a rate equal to the
Mortgage Note Rate. However, if the Mortgage Note Rate is greater than One Month LIBOR + 2.75%, the Warehouse Rate shall be equal to One Month LIBOR + 2.75%, or if the Mortgage Note Rate is less than One Month
LIBOR, the Warehouse Rate shall be equal to One Month LIBOR. It is agreed that interest shall be calculated on the basis of a 365 (366 in Leap year) day year unless calculation on that basis would result in Bank receiving interest at a
rate in excess of the maximum rate of interest which Bank is permitted by law to contract for and charge, in which case such indebtedness shall bear interest at such maximum rate. The indebtedness shall also bear interest after maturity (whether by
demand, acceleration or otherwise) at the maximum rate of interest which Bank is permitted by law to contract for and charge thereon. 
  
 Principal and interest as computed above shall be payable in the following manner: 
  
 As to Principal and accrued interest, each advance hereunder, and interest accrued thereon shall be payable on the earlier
of: 
  
 (i) Forty-Five (45) days from the Advance Date of
the Eligible Mortgage Loan, 
  
 (ii) On the date of funding of
the Purchase Price by any Qualified Investor for the Purchase of an Eligible Mortgage Loan which was funded by the advance, or 
  
 (iii) Termination of this Note. 
  
 Maturity. Notwithstanding the foregoing, the entire outstanding principal balance hereunder together with all accrued but unpaid interest shall be due and
payable in full on May 31, 2004. 
  
 The Bank may, in its sole discretion,
honor one or more advances requested hereunder by the Borrower after maturity, and any such advance shall be considered an extension of credit hereunder and governed by the terms of the Agreement. Any such advance shall be immediately due and
payaple. 
  
 Any unpaid principal and interest accrued thereon shall also bear
interest, from the date of maturity as set forth above, (whether by demand, acceleration or otherwise) until the unpaid advance is fully satisfied, at the maximum rate of interest which Bank is permitted by law to contract for and charge on the date
hereof or such maximum rate so permitted on the maturity date hereof, whichever is greater. 
  
 The Base Rate is one of several interest rate indices employed by the Bank. The undersigned acknowledges that the Bank has made, and may hereafter make, loans bearing interest at rates which are higher or lower than
the Base Rate. 
  
 Any renewal or extension of the debt evidenced hereby shall
bear interest at the rate of interest set by Bank at that time, not to exceed the maximum rate which Bank is permitted by law to contract for and charge either on the date hereof or on the date of such renewal or extension, whichever is greater.

  
 All installments, prepayments and payments of principal and interest shall be
applied first to fees, then to interest, and the 
  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 16 of 24

 
balance to principal due hereunder and are payable at Bank, 165 Madison, Memphis, Tennessee 38103, or such other place or places as the holder hereof may
from time to time designate in writing, in lawful money of the United States of America which shall be legal tender in payment of all debts and dues, public and private, at the time of payment. This note and the indebtedness evidenced hereby are
secured by an assignment of all mortgages and deeds of trust together with an endorsement of all notes evidencing Eligible Mortgage Loans under the Agreement, Commitments from Qualified Investors to Purchase the Eligible Mortgage Loans, the proceeds
of such Eligible Mortgage Loans, and any accounts maintained by Borrower at Bank. 
  
 The undersigned hereby agree(s) to pay all reasonable expenses directly related to the loan evidenced hereby incurred or to be incurred in its making, servicing or collection, including without limitation reasonable attorney’s fees.
The undersigned further agree to pay to Bank upon demand all reasonable charges for services rendered or to be rendered, and reasonable expenses incurred or to be incurred, to or on behalf of the undersigned in connection with borrowing evidenced
hereby including, but not limited to, fees of any Custodian, provided that charges for such services rendered by officers or employees of the Bank shall be limited to those rendered directly for the inspecting and verification of collateral prior to
the loan being made, servicing and verifying the collateral securing said loan, and the collection of said loan. 
  
 It is contemplated that the original principal sum evidenced hereby shall be reduced from time to time, and that additional loans and advances may be made in the future,
which additional loans and/or advances shall be evidenced by this Note and subject to its terms and conditions. 
  
 Upon the happening of any of the following events, all of the aforesaid liabilities shall, without notice except as provided under the terms of the Agreement, at the
option of the Bank, become immediately due without demand for payment thereof: (a) the failure of any Obligor (which term shall include the undersigned makers, together with all endorsers, sureties and guarantors of this Note) to perform any
agreement hereunder or related to the loan evidenced hereby (b) the filing of any action for the appointment of a receiver for, the making of a general assignment for the benefit of creditors by, or any other act of insolvency of any Obligor,
however expressed or indicated (c) the entry of a materially adverse judgment against any Obligor (d) the filing of any materially adverse lien against any property of any obligor (e) the taking of possession of any substantial part of the property
of any Obligor at the instance of any governmental authority (f) the dissolution, merger, consolidation or reorganization of change in control of any Obligor (g) the reasonable determination by the Bank that a material adverse change has occurred in
the financial condition of any Obligor (h) the assignment by the undersigned of any equity or other right in any of the collateral without the written consent of the Bank (i) the Bank deeming itself to be insecure or (j) the occurrence of any event
of default under the Agreement or the failure to make any payment or any other default on any other indebtedness owing by the undersigned to Bank. 
  
 The undersigned shall have the privilege, at any time and from time to time, of prepaying, in whole or in part, the then outstanding principal balance hereunder, together
with accrued interest thereon, without penalty or premium. 
  
 If this Note is
placed in the hands of an attorney for collection, by suit or otherwise, or to enforce its collection, or to protect the security for its payments, the undersigned will pay all reasonable costs of collection and litigation, together with a
reasonable attorney’s fee. 
  
 The makers, endorsers, sureties and guarantors
hereof waive presentment, demand, protest and notice or protest of demand and of dishonor and nonpayment and expressly agree that this Note, or any payment or installment hereunder, may be extended, modified or renewed from time to time, in whole or
in part, without limit as to the number of such extensions or modifications or the period or periods thereof and without notice to them and without in any way affecting their liability, and further expressly agree that any present or future security
for the indebtedness evidenced hereby or for any indebtedness due by the undersigned to the holder hereof may be released or, after default, liquidated from time to time, in whole or in part, without notice to them and without in any way affecting
their liability. 
  
 No delay on the part of the holder hereof in exercising any
right shall operate as a waiver of any such right. 
  
 This document and
associated documents will be governed by and construed in accordance with the laws of the State of Tennessee, except with respect to interest which shall be governed by applicable provisions of federal law. 
  
 EXHIBIT ONLY 
  

	By:	 	 	 	 EXHIBIT ONLY

	 	 	Its:	 	 EXHIBIT ONLY

  
  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 17 of 24

 EXHIBIT C 
  

	                                      
                              BAILEE LETTER	  	 Loan Name                        

	 	  	 Loan Amount                        

  
 Dear Investor: 
  
 The mortgage notes and other documents enclosed herewith (“the Collateral”) have
been assigned and pledged to First Tennessee Bank of Memphis, TN. (the “Bank”) to secure payment of all sums owing the Bank by Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (“Borrower”) arising under that
certain Mortgage Warehouse Loan and Security Agreement dated June 1, 2003, and certain related security agreements. 
  
 The Mortgage Note(s), and all other documents relating thereto, whether now or hereafter delivered to you, are to be held by you as a bailee in possession on behalf of
and for the benefit of the Bank, for the purpose of perfecting the security interest of the Bank in such Mortgage Note(s), and subject to the Bank’s direction and control. It is our mutual understanding that the Mortgage Note(s) constitute
collateral securing the obligations of the Borrower to the Bank and that all proceeds thereof should be promptly paid to the Bank for application to such obligation. The Mortgage Note(s) held by you hereunder for any period shall at all times be
segregated from other property owned or held by you. 
  
 In addition to the
foregoing, (1) if the Mortgage Note(s) is/are accepted for purchase by you, the applicable proceeds of such purchase are, within twenty-one (21) calendar days after the date of delivery of this letter, to be wire transferred using the following

  

	WIRE TRANSFER INSTRUCTIONS:
	 First Tennessee Bank / Memphis, Tennessee

	 ABA #084000026

	 For Credit to: FTB Warehouse Clearing Account

	     Account #100108253

	     For Final Credit to:    BRKR0032 / Duxford Financial, Inc. and/or Bayport
Mortgage, L. P.

	                                       REF:
{Loan(s) being purchased by you}

  
 to the Bank in immediately available
funds at the Bank for credit to the account of the Borrower, and (2) any Mortgage Note which is not accepted for purchase by you should be returned via overnight delivery, within twenty-one (21) days after the date of delivery of this letter, to:

  
 FIRST TENNESSEE BANK 
 ATTN: MORTGAGE WAREHOUSE LENDING 
 7640 POPLAR AVE. SUITE 210 
 GERMANTOWN, TENNESSEE 38138 
 along with all other documents relating to such Mortgage Note(s), unless otherwise directed by the Bank. In no event should the Mortgage Note(s) be delivered to
any party other than the Bank, or otherwise dealt with by you, without the prior written consent of the Bank. The Mortgage Note(s) and related documents have not been assigned or transferred by the Bank to any other party. The Bank’s
security interest in the Mortgage Note(s) shall be deemed to have been released only upon the receipt by the Bank of the full amount of cash proceeds from the purchase of such Mortgage Note(s). The Bank’s security interest in the Mortgage
Note(s) shall then terminate and be canceled without further action upon Bank’s receipt of said proceeds. You are not to honor any requests or instructions from the Borrower relating to any Mortgage Note(s), or any other documents relating
thereto, unless you have received the prior written consent of the Bank to such new or variant instructions, or until the Bank has received the applicable proceeds from the sale of such Mortgage Note(s). If you have any questions, please address
your inquiries to the Bank’s Vice President of Mortgage Warehouse Lending, whose phone number is (888) 297-0222. 
  
 If the terms hereof are acceptable to you, please have an authorized officer of your institution execute the enclosed copy of this letter in the space provided below and
promptly return such copy to the Bank at the above address. 
  
 Thank you for your
cooperation with this matter. 
  

	FIRST TENNESSEE BANK
	 By:
	 	  

	
	INVESTOR ACCEPTANCE:
	 ALL TERMS ACKNOWLEDGED, AGREED AND ACCEPTED THIS DATE:

	 By:
	 	  

	 Title:
	 	  

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 18 of 24

 EXHIBIT D 
  
 POWER OF ATTORNEY 
  
 Duxford Financial, Inc. and/or Bayport Mortgage, L. P. hereby irrevocably appoints Robert A. Garrett as its attorney-in-fact with full power of substitution for,
and on behalf of it, and in its name, to endorse or to cancel the endorsement of any mortgage notes, to complete, execute, deliver and record any assignment, mortgage, financing statement or other instrument; to take all necessary and appropriate
action in its name with respect to any mortgage loan and any commitment for sale of the mortgage loan and the servicing of any mortgage loan transferred to Bank pursuant to the Mortgage Warehouse and Security Agreement (the “Agreement”)
executed June 1, 2003 including but not limited to selling the Mortgage Loans to an investor, to commence, prosecute, settle, discontinue, defend or otherwise dispose of any claim relating to any mortgage note, commitment, mortgage, and loan,
or any collateral under the Agreement and to sign the name of Duxford Financial, Inc. and/or Bayport Mortgage, L. P. wherever appropriate to any power granted by the Mortgage Warehouse and Security Agreement executed June 1, 2003. 

 

		
	 By:
	 	  

		
	 Its:
	 	  

  

		
	 STATE OF
	 	  

	 COUNTY OF
	 	  

  
 Personally appeared
before me, the undersigned authority in and for the said county and state, on this              day of
                , 200     , within my jurisdiction, the within named
                        , who acknowledged that (he)(she) is
                 of Duxford Financial, Inc. and/or Bayport Mortgage, L. P., a California Corporation, and that for and on behalf of the said
Corporation, and as its act and deed (he)(she) executed the above and foregoing instrument, after first having been duly authorized by said Corporation so to do. 
  

	  

	 NOTARY PUBLIC

  

	
	 My Commission Expires:

	
	  

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 19 of 24

 EXHIBIT E 
 QUALIFIED INVESTORS 
 (To be provided by Borrower 
 and subject to Bank’s approval.) 
  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 20 of 24

 EXHIBIT F 
 Commitment Letter 
  
 Wednesday, August 06,
2003 
  
 Mark Carver 
 Duxford Financial, Inc. and/or Bayport Mortgage, L. P. 
 1300 Dove Street, Suite 200 
 Newport Beach, CA 92660 
  
 Re: Warehouse Facility Commitment Terms 
  
 Dear
Mr. Carver, 
  
 First Tennessee Bank (“Bank”) is pleased to make a
warehouse line of credit available to Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (“Borrower”) based upon the following terms and in accordance with terms and conditions stated within the Mortgage Warehouse Loan and Security
Agreement (“Agreement”) pertaining to this facility. All terms contained within this letter (“Commitment Letter”) shall be binding and shall be considered to be part of the Agreement upon mutual acceptance by all parties. This
loan commitment shall expire 30 days from the date of this letter unless accepted and executed prior to that date. This commitment replaces all prior warehouse facility commitments made to Duxford Financial, Inc. and/or Bayport Mortgage, L. P. by
the Bank and is not in addition to any such prior commitments. 
  

	 The terms of this commitment are as follows:

		
	 Total Maximum Line Amount:
	  	$20,000,000.00
		
	 Committed Line:
	  	$10,000,000.00
		
	 Uncommitted Line:
	  	$10,000,000.00
		
	 Purpose:
	  	To fund Borrower’s origination of single family residential mortgage loans which meet all eligible collateral criteria, as may be amended by Bank from time to
time.
		
	 Interest Rate:
	  	Equal to the Mortgage Note Rate, but no less than the Rate Floor, and no more than the Rate Cap.
		
	 Rate Floor:
	  	Bank Base Rate minus 3.00%
		
	 Rate Cap:
	  	Bank Base Rate plus 2.00%
		
	 Fees:
	  	$40.00 per advance under the line. Each mortgage loan must be funded with a separate advance made payable to a title company or insured closing attorney. Fee may include spot
flood certification.
		
	 Advance rate:
	  	The lesser of:
		
	 	  	 1. 100% of the net funding amount on the HUD-1, or

		
	 	  	 2. The unpaid principal balance of the mortgage loan being originated.

		
	 	  	 3. 99% of the Market Value of the mortgage loan being funded.

		
	 Maximum Dwell:
	  	Forty-Five (45) days
		
	 Maximum Wet Period:
	  	3 business days
		
	 Commitment Expiration:
	  	May 31, 2004
		
	 Eligible Collateral:
	  	See Exhibit G of the Mortgage Warehouse Loan and Security

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 21 of 24

	 	  	Agreement.
		
	 Maximum Loan Size:
	  	Loans in excess of $500,000.00 must be approved by Bank prior to funding.
		
	 Guarantor(s):
	  	None
			
	 Financial Covenants:
	  	1.	  	$250,000.00 minimum net worth in Borrower at all times,
	 	  	2.	  	Borrower and Guarantor(s) agree to maintain a minimum combined net worth of $1,500,000.00 as described within the Agreement,
	 	  	3.	  	Combined net worth of Borrower and Guarantor(s) to meet or exceed 5% of Borrower’s outstanding liabilities at all times.
	 	  	4.	  	Borrower’s Liquidity when combined with the Liquidity of all guarantors shall at all times meet or exceed 5% of the Maximum Line amount.
			
	 Other Covenants:
	  	1.	  	Borrower agrees to maintain fidelity and E&O coverage in force in an amount equal to at least $300,000 per incident, with a maximum deductible of $15,000.
	 	  	2.	  	Borrower agrees to provide Bank audited financial statements prepared in accordance with GAAP annually,
	 	  	3.	  	Borrower agrees to provide Bank unaudited financial statements prepared in accordance with GAAP quarterly,
	 	  	4.	  	Borrower agrees to provide Bank guarantors’ unaudited personal financial statements on the Bank’s then-current form annually,
	 	  	5.	  	Borrower agrees not to use or attempt to use this warehouse facility to repurchase any mortgage loan,
	 	  	6.	  	Various other covenants, representations, and warranties as listed in the Mortgage Warehouse Loan and Security Agreement.

  
 Please indicate your acceptance of
these terms by executing below. 
 If you have any questions or I may be of assistance in any way, please call. 
  
 Sincerely 
  
 Robert A. Garrett 
 Vice President –
Warehouse Lending 
  
 Agreed to and accepted this
             day of
                                        ,
            . 
  
 Duxford Financial, Inc. and/or Bayport Mortgage, L. P. 

	 By:
	 	  

	 Its:
	 	  

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 22 of 24

 EXHIBIT G 
 ELIGIBLE MORTGAGE LOAN CRITERIA 
  
 Subject to change from time to time at the Bank’s sole discretion, the following loans will be considered eligible for warehousing under each Mortgage Warehouse Loan and Security Agreement: 
  
 To be warehoused, each loan must: 
  

	 	A.	 	be secured by one-to-four family residential real property, AND 

  

	 	B.	 	be ready for immediate occupancy, AND 

  

	 	C.	 	be located within one of the 48 contiguous United States, AND 

  

	 	D.	 	be no more than 30 days old on the Advance Date. 

  

	1.	 	Loans which conform to FHA, VA, FNMA, or FHLMC guidelines and certain other loans covered by private mortgage insurance may always be warehoused, subject to each warehouse
line’s maximum line of credit. 

  

	2.	 	Conventional Non-conforming loans may also be warehoused, subject to each warehouse line’s maximum line of credit and subject to the following: 

  

	 	A.	 	No more than 5% of a warehouse line may be used to warehouse loans graded 5; AND 

  

	 	B.	 	No more than 15% of a warehouse line may be used to warehouse the combined total of all loans graded 4 or 5; AND 

  

	 	C.	 	No more than 35% of a warehouse line may be used to warehouse the combined total of all loans graded 3, 4 or 5; AND 

  

	 	D.	 	No more than 85% of a warehouse line may be used to warehouse the combined total of all loans graded 2, 3, 4 or 5; AND 

  

	 	E.	 	Up to 100% of a warehouse line may be used to warehouse the combined total of all loans graded 1, 2, 3, 4 or 5. 

  

	 	F.	 	Loans which fall below the minimum grade 5 FICO criterion or which fall above the maximum grade 5 CLTV criterion may not be warehoused. 

  

	3.	 	All loans warehoused will be graded by the Bank in accordance with the following “Table of Mortgage Loan Grades” (Table on next page): 

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 23 of 24

 TABLE OF MORTGAGE LOAN GRADES 
  
 Combined Loan to Value Ratio 
  

	 	  	 	  	 100%
 or Less

	  	 95%
 or Less

	  	 90%
 or Less

	  	85%
or Less

	  	80%
or Less

	  	70%
or Less

	  	60%
or Less

	  	50%
or Less

										
	 F
 I
 C
 O
  
 C
 r
 e
 d
 i
 t
  
 S
 c
 o
 r
 e
	  	 FHA, VA, FNMA,
 FHLMC, or Loans
 covered by MI*
	  	1	  	1	  	1	  	1	  	1	  	1	  	1	  	1
	  	720 or Above	  	2	  	2	  	2	  	1	  	1	  	1	  	1	  	1
	  	700 to 719	  	3	  	2	  	2	  	2	  	2	  	2	  	1	  	1
	  	670 to 699	  	3	  	3	  	2	  	2	  	2	  	2	  	2	  	2
	  	640 to 669	  	4	  	3	  	3	  	3	  	3	  	3	  	3	  	3
	  	620 to 639	  	5	  	4	  	3	  	3	  	3	  	3	  	3	  	3
	  	600 to 619	  	5	  	5	  	4	  	4	  	4	  	4	  	4	  	4
	  	550 to 599	  	5	  	5	  	5	  	5	  	4	  	4	  	4	  	4
	  	500 to 549	  	5	  	5	  	5	  	5	  	5	  	5	  	4	  	4
	  	Below 500	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed	  	Not
Allowed

	*	 	Non-conforming loans are considered Grade 1 if covered to 75% or less by private mortgage insurance naming the lender as the insured. MI coverage must be noted on the ARC and
certificate must be faxed with the ARC to qualify for this special grading. 

  

	4.	 	Mortgage Loans which have been previously warehoused or which have been re-purchased by the warehouse borrower are specifically not eligible for warehousing.

  

	

	 Loan Agreement - Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (32) - June 1, 2003
	  	Page 24 of 24<PAGE>

                                ACE LIMITED 1995
                                ----------------
                             OUTSIDE DIRECTORS PLAN
                             ----------------------

                   (AS AMENDED THROUGH THE SEVENTH AMENDMENT)
                   ------------------------------------------

<PAGE>

TABLE OF CONTENTS                                                          Page

SECTION 1 GENERAL ............................................................1

     1.1.  PURPOSE ...........................................................1

     1.2.  OPERATION AND ADMINISTRATION ......................................1

SECTION 2 RETAINER AWARDS ....................................................1

     2.1.  GENERAL ...........................................................1

     2.2.  VESTING ...........................................................2

     2.3.  LIMIT ON STOCK ....................................................2

SECTION 3  COMMITTEE CHAIRMAN AWARDS .........................................3

SECTION 3A  MEETING AWARDS ...................................................3

SECTION 3B  OPTION AWARDS ....................................................5

     3B.1. GENERAL ...........................................................5

     3B.2. TERMS OF OPTION AWARDS ............................................5

SECTION 4  OPERATION AND ADMINISTRATION ......................................6

     4.1.  EFFECTIVE DATE ....................................................7

     4.2.  SHARES SUBJECT TO PLAN ............................................7

     4.3.  FRACTIONAL SHARES .................................................7

     4.4.  ADJUSTMENTS TO SHARES .............................................8

     4.5.  LIMIT ON DISTRIBUTION .............................................9

     4.6.  TAXES .............................................................9

     4.7.  DISTRIBUTIONS TO DISABLED PERSONS .................................9

     4.8.  TRANSFERABILITY ..................................................10

     4.9.  ADMINISTRATION ...................................................10

     4.10. FORM AND TIME OF ELECTIONS .......................................10

     4.11. AGREEMENT WITH COMPANY ...........................................10

     4.12. EVIDENCE .........................................................10

     4.13. ACTION BY COMPANY ................................................10

     4.14. GENDER AND NUMBER ................................................10

SECTION 5  COMMITTEE ........................................................10

     5.1.  SELECTION OF COMMITTEE ...........................................11

     5.2.  POWERS OF COMMITTEE ..............................................11

     5.3.  INFORMATION TO BE FURNISHED TO COMMITTEE .........................11

     5.4.  LIABILITY AND INDEMNIFICATION OF COMMITTEE .......................11

SECTION 6  AMENDMENT AND TERMINATION ........................................11

                                      -1-

<PAGE>

SECTION 7  DEFINED TERMS ....................................................12

SECTION A- 1  DEFERRAL ELECTION...............................................I

     A-1-1. GENERAL...........................................................I

     A-1-2. STOCK DEFERRAL ELECTION...........................................I

     A-1-3. CASH DEFERRAL ELECTION...........................................II

SECTION A- 2  ACCOUNTS.......................................................II

     A-2-1. STOCK ACCOUNT....................................................II

     A-2-2. CASH ACCOUNT....................................................III

     A-2-3. STATEMENT OF ACCOUNTS...........................................III

SECTION A- 3  DISTRIBUTIONS.................................................III

     A-3-1. GENERAL.........................................................III

     A-3-2. LIMITATION OF IMPLIED RIGHTS.....................................IV

                                      -2-

<PAGE>

                                ACE LIMITED 1995
                                ----------------
                             OUTSIDE DIRECTORS PLAN
                             ----------------------

                   (AS AMENDED THROUGH THE SEVENTH AMENDMENT)

                                    SECTION 1
                                    ---------

                                     GENERAL
                                     -------

     1.1.  Purpose. The ACE Limited 1995 Outside Directors Plan (the "Plan") has
been established by ACE Limited (the "Company") to promote the interests of the
Company and its shareholders by enhancing the Company's ability to attract and
retain the services of experienced and knowledgeable directors and by
encouraging such directors to acquire an increased proprietary interest in the
Company.

     1.2.  Operation and Administration. The operation and administration of the
Plan shall be subject to the provisions of Section 4. Capitalized terms in the
Plan shall be defined as set forth in Section 7 or elsewhere in the Plan.

                                    SECTION 2
                                    ---------

                                 RETAINER AWARDS
                                 ---------------

     2.1.  General.

     (a)   For each Plan Year, each Director who is an Eligible Director on the
           first day of that Plan Year shall be granted a "Retainer Award" for
           the year, which shall be in the form of shares of Stock having a Fair
           Market Value of $35,000. Except as otherwise provided in this
           subsection 2.1, the Retainer Award for any Plan Year shall be made as
           of the later of (i) the Award Date for the Meeting Awards granted
           with respect to the board meetings which occur concurrent with the
           annual general meeting of the Company shareholders, or (ii) the first
           day of the Plan Year (either being the "Award Date" for that Retainer
           Award), and the Fair Market Value of the Stock so awarded shall be
           determined as of that date.

     (b)   If a Director becomes an Eligible Director during a Plan Year, on a
           date other than the first day of the Plan Year, he shall be granted a
           Retainer Award for the year, which shall be in the form of shares of
           Stock having a Fair Market Value equal to $35,000, subject to a
           pro-rata reduction to reflect the portion of the Plan Year prior to
           the date on which he becomes an Eligible Director; provided, however,
           that with respect to the 1999 Plan Year, such Retainer Award subject
           to pro rata reduction shall include the 1999 Additional Award. A
           Director's Retainer Award under this paragraph (b) shall be made on
           the first business day on which he is an Eligible Director (the
           "Award Date" for that Retainer Award), and the Fair Market Value of
           the Stock so awarded shall be determined as of that date; provided,
           however, that if a Director becomes eligible for a Retainer Award
           under this Paragraph (b) on a date before the 1999 Additional Award
           Date, then

                                      -1-

<PAGE>

           that portion of the 1999 Additional Award to which he becomes
           entitled shall be made as of the 1999 Additional Award Date, and the
           Fair Market Value of the Stock so awarded shall be determined as of
           that date.

     (c)   The shares awarded under this subsection 2.1 shall be subject to the
           vesting provision set forth in subsection 2.2.

     (d)   A Participant may elect to defer receipt of his Retainer Awards in
           accordance with Supplement A of the Plan.

     2.2.  Vesting. A Participant who ceases to be a Director shall forfeit the
Retainer Award which is not vested on his Date of Termination; provided,
however, that (i) if a Participant ceases to be a Director by reason of his
death or Disability, any portion of the Retainer Award that is not then vested
shall vest on his Date of Termination; and (ii) any portion of the Retainer
Award that is held by an individual serving as a Director on the date of a
Change in Control that is not then vested shall vest on the date of the Change
of Control. Except as otherwise provided in this subsection 2.2, a Participant
shall become vested in 100% of the Retainer Award shares for any Plan Year on
the last day of that Plan Year; provided that a Participant shall become vested
in the Retainer Award shares for the Plan Year only if such Participant's Date
of Termination does not occur prior to the last day of that year.

     2.3.  Limit on Stock. Stock granted as a Retainer Award shall be subject to
the following:

     (a)   Such Stock may not be sold, assigned, transferred, pledged or
           otherwise encumbered prior to the date it is vested.

     (b)   Each certificate issued in respect of such Stock shall be registered
           in the name of the Participant and deposited, together with a stock
           power endorsed in blank, with the Company.

     (c)   Except as otherwise provided by the Plan, the Participant as owner of
           shares of Stock granted to him as a Retainer Award shall have all the
           rights of a shareholder, including but not limited to the right to
           vote such shares and the right to receive all dividends paid on such
           shares; provided, however, that no dividends shall be payable to or
           for the benefit of a Participant with respect to record dates for
           such dividends occurring on or after the date, if any, on which the
           Participant has forfeited the Stock.

                                    SECTION 3
                                    ---------

                            COMMITTEE CHAIRMAN AWARDS
                            -------------------------

     (a)   Each Eligible Director who serves as the chairman of any committee of
           the Board (a "Committee Chairman") during any Plan Year Quarter shall
           be granted a Committee Chairman Award as of the Award Date used for
           the Meeting Awards granted with respect to first board meeting (of
           the full board or any committee

                                      -2-

<PAGE>

           thereof) of the next following Plan Year Quarter (the "Award Date"
           for that Committee Chairman Award).

     (b)   The amount of the Committee Chairman Award shall be the number of
           shares of Stock having a Fair Market Value (determined as of the
           Award Date) of $1,250 per quarter. If an individual serves as a
           Committee Chairman for less than a full Plan Year Quarter, then the
           size of the Committee Chairman Award shall be subject to a pro-rata
           reduction to reflect the portion of the Plan Year Quarter during
           which he was not Committee Chairman.

     (c)   The shares granted as a Committee Chairman Award under this Section 3
           shall be fully vested at the time of award.

     (d)   A Participant may elect to defer receipt of his Committee Chairman
           Awards in accordance with Supplement A of the Plan.

     (e)   A Participant may elect to receive his Committee Chairman Award in
           cash.

                                   SECTION 3A
                                   ----------

                                 MEETING AWARDS
                                 --------------

     (f)   Each Eligible Director who is otherwise eligible to receive cash
           compensation for attendance at a meeting of the Board or for
           attendance at a meeting of any committee of the Board, may in lieu of
           such cash compensation, elect to receive to such compensation in
           Stock, and such compensation payable in Stock shall be considered the
           grant of a "Meeting Award." An election to receive a Meeting Award in
           lieu of cash compensation must be made in accordance with the
           requirements of paragraph (c) of this Section 3A. In the event that
           one or more committee or Board meetings are scheduled to occur within
           four consecutive business days of each other (the "Consecutive
           Meetings"), then the Meeting Awards for all such Consecutive Meetings
           shall be granted as of the first business day coincident with or next
           following the date of the last scheduled meeting in such four day
           period, which shall be the "Award Date" for that Meeting Award. (A
           committee or Board meeting that occurs within four consecutive
           business days of some but not all the Consecutive Meetings, or that
           is scheduled after the Meeting Awards for the prior meetings have
           been issued, will not be part of the preceding group of Consecutive
           Meetings, although, if applicable it could be part of another group
           of Consecutive Meetings.) In the event that the Company's annual
           general meeting of shareholders is scheduled to occur on the date
           coincident with or next following the date of the last scheduled
           meeting in such four day period, the date of such shareholder meeting
           shall be the "Award Date" for that Meeting Award. All other Meeting
           Awards shall be granted as of the first business day coincident with
           or next following the date of the Board or committee meeting to which
           it relates, which shall be the "Award Date" for that Meeting Award.

                                      -3-

<PAGE>

     (g)   The amount of the Meeting Award for attendance at a Board meeting
           shall be the number of shares of Stock having a Fair Market Value
           (determined as of the Award Date) of $3,000 per meeting. The amount
           of the Meeting Award for attendance at a committee meeting shall be
           the number of shares of Stock having a Fair Market Value (determined
           as of the Award Date) of $1,000 per meeting.

     (h)   Except as otherwise provided in this paragraph (c), an election to
           receive a Meeting Award in lieu of cash compensation for attendance
           at Board and committee meetings during a Plan Year shall be filed at
           such time and in such form as established by the Committee. An
           individual who becomes an Eligible Director on a date other than the
           first day of the Plan Year may elect to receive a Meeting Award in
           lieu of cash compensation for the remainder of the year by filing a
           Meeting Award election filed at such time and in such form as
           established by the Committee. An election to receive a Meeting Award
           rather than cash compensation shall apply to all Board and committee
           meetings in the Plan Year for which the election is made, provided,
           however, that such election shall be effective only with respect to
           compensation for meetings occurring after the date such election is
           filed.

     (i)   The shares granted as a Meeting Award under this Section 3A shall be
           fully vested at the time of award.

     (j)   A Participant may elect to defer receipt of his Meeting Awards in
           accordance with Supplement A of the Plan.

     (k)   If a Participant has made no election under this Section 3A with
           respect to the form of payment of compensation for his attendance at
           Board or committee meetings, then such compensation shall be paid in
           cash.

                                   SECTION 3B
                                   ----------

                                  OPTION AWARDS
                                  -------------

     3B.1. General.

     (l)   For each Plan Year, each Director who is an Eligible Director on the
           first day of that Plan Year shall be granted an "Option Award" which
           shall entitle the Eligible Director to purchase shares of Stock. The
           number of shares subject to the Option Award with respect to the
           Option Award granted in the Plan Year beginning in 2001 (the
           "2001/2002 Plan Year") and in each Plan Year thereafter shall be
           4,000, unless and until the number of shares underlying an Option
           Award in any subsequent Plan Year is modified by the Board. Except as
           otherwise provided in this subsection 3B.1, the Option Award for any
           Plan Year shall be granted as of the later of (i) the Award Date used
           for the Meeting Awards granted with respect to the board meetings
           which occur concurrent with the annual general meeting of

                                      -4-

<PAGE>

           the Company shareholders, or (ii) the first day of the Plan Year
           (either being the "Award Date" for that Option Award).

     (m)   If a Director becomes an Eligible Director during a Plan Year, on a
           date other than the first day of the Plan Year, he shall be granted
           an Option Award which shall entitle the Eligible Director to purchase
           shares of Stock. The number of shares of Stock subject to the Option
           Award shall be the number which would have been subject to the Option
           if he had become an Eligible Director on the first day of the Plan
           Year, except that such number of shares shall be subject to a pro
           rata reduction to reflect the portion of the Plan Year prior to the
           date on which he becomes an Eligible Director. In no event shall an
           Option Award be granted with respect to a fractional share, and the
           amount of any pro-rata reduction shall be rounded to the nearest
           whole share. An Option Award made under this paragraph (b) shall be
           granted on the first business day on which the Director is an
           Eligible Director (the "Award Date" for that Option Award).

     (n)   In addition to any Option Award granted in accordance with paragraphs
           (b) or (c) of this subsection 3B.1, an individual who is an Eligible
           Director on the first day of the 2001/2002 Plan Year shall be granted
           an Option Award, entitling him to purchase 2,000 shares of Stock.
           Such Option Award shall be granted as the first business day of the
           2001/2002 Plan Year (the "Award Date" for that Option Award).

     3B.2. Terms of Option Awards.

     (o)   An Option Award shall entitle the Director to purchase shares of
           Stock at a per-share price equal to the greater of: (i) 100% of the
           Fair Market Value of a share of Stock as of the Award Date; or (ii)
           the par value of a share of Stock.

     (p)   The full purchase price of each share of Stock purchased upon the
           exercise of any Option Award shall be paid at the time of such
           exercise and, as soon as practicable thereafter, a certificate
           representing the shares so purchased shall be delivered to the person
           entitled thereto.

     (q)   The Option Award purchase price shall be payable in cash or in shares
           of Stock (valued at Fair Market Value as of the day of exercise), or
           in any combination thereof. A Director may elect to pay the purchase
           price upon the exercise of an Option Award granted pursuant to this
           Section 3B through a cashless exercise procedure established by the
           Company.

     (r)   The Option Award granted to an Eligible Director shall become
           exercisable with respect to one-third of the shares covered by the
           Option Award on the last day of the Plan Year for which it was
           granted; with respect to an additional one-third of the shares
           covered by the Option Award on the last day of the Plan Year next
           following the Plan Year for which it was granted; and with respect to
           the remaining one-third of the shares covered by the Option Award on
           the last day of the next following Plan Year; provided, however, that
           such portion of the Option

                                      -5-

<PAGE>

           Award shall become exercisable only if such Director's Date of
           Termination does not occur on or prior to the last day of the
           applicable Plan Year. Notwithstanding any provision of the Plan to
           the contrary, the foregoing vesting schedule shall be subject to
           acceleration, to the extent permitted by the Committee, in the event
           of the Participant's death, Disability, retirement, or involuntary
           termination or in the event of a Change in Control.

     (s)   An Option Award shall expire on the earlier of: (i) the ten-year
           anniversary of the Award Date or (ii) the one-year anniversary of the
           Director's Date of Termination. Notwithstanding the foregoing, the
           Committee may provide that, following a Director's Date of
           Termination, an Option Award shall expire on any date later than the
           one-year anniversary of the Director's Date of Termination, provided
           that such date of expiration may not be later than the ten-year
           anniversary of the date on which the Option Award was granted. No
           Option shall be exercisable following a Director's Date of
           Termination except to the extent that the Option is exercisable prior
           to, or becomes exercisable as of, such Date of Termination.

                                    SECTION 4
                                    ---------

                          OPERATION AND ADMINISTRATION
                          ----------------------------

     4.1.  Effective Date. Subject to the approval of the shareholders of the
Company at the Company's 1996 annual meeting of its shareholders, the Plan shall
be effective as of the Effective Date; provided, however, that to the extent
that Awards are made under the Plan prior to its approval by shareholders, they
shall be contingent on approval of the Plan by the shareholders of the Company.
The Plan shall be unlimited in duration and, in the event of Plan termination,
shall remain in effect as long as any shares of Stock awarded under it are
outstanding and not fully vested, or any Option Awards granted under it are
outstanding and not exercised; provided, however, that no new Awards shall be
made under the Plan after the tenth anniversary of the Effective Date. With
respect to any individual who is an Eligible Director on the Effective Date,
receipt of Awards under the Plan shall be contingent on the Director
relinquishing, as of the Effective Date, and subject to this Plan being approved
by the shareholders at the 1996 annual meeting, the ownership rights to any
shares of Stock awarded to him by the Company before the Effective Date, but
only with respect to the shares that had not vested on or before February 1,
1996.

     4.2.  Shares Subject to Plan. The shares of Stock with respect to which
Awards may be made under the Plan shall be shares currently authorized but
unissued shares, or shares purchased in the open market by a direct or indirect
wholly owned subsidiary of the Company (as determined by the Chairman or any
Executive Vice President of the Company). The Company may contribute to the
subsidiary an amount sufficient to accomplish the purchase in the open market of
the shares of Stock to be so acquired (as determined by the Chairman or any
Executive Vice President of the Company). The number of shares of Stock
available for Awards under the Plan during any fiscal year of the Company shall
equal:

                                      -6-

<PAGE>

     (a)   0.5% of the adjusted average of the outstanding Stock, as that number
           is determined by the Company to calculate fully diluted earnings per
           share for the preceding fiscal year;

     REDUCED BY

     (b)   any shares of Stock granted pursuant to Awards under the Plan, and
           any shares of Stock subject to any outstanding award under the Plan;

provided however, that no reduction shall be made in the number of shares
otherwise available under paragraph 4.2(a) for any shares of Stock subject to an
Award under the Plan to the extent that such shares are not issued by reason of
a lapse, forfeiture, expiration or termination of the Award for any reason
without issuance of shares (whether or not cash or other consideration is paid
to a Participant in respect of such shares).

     4.3.  Fractional Shares. No fractional shares of Stock shall be distributed
under the Plan and, instead, the Fair Market Value of such fractional share
shall be distributed in cash, with the Fair Market Value determined as of the
date the fractional share would otherwise have been distributable; provided,
however, that in the event that the Participant elects to defer receipt of any
Award under the Plan pursuant to Supplement A of the Plan, the fractional
amounts will be calculated and recorded in the Participant's Stock Account. The
subsequent distribution of a Participant's deferred Stock Awards shall be
subject to payment in whole Shares with the fractional Shares distributed in
cash, with the Fair Market Value determined as of the date the fractional share
would otherwise have been distributable. For purposes of the foregoing sentence,
if more than one Award or type of Award under the Plan is to be distributed in
Shares on a single date, such Shares shall be aggregated prior to determining
the number of whole and fractional shares to be distributed.

     4.4.  Adjustments to Shares.

     (a)   If the Company shall effect any subdivision or consolidation of
           shares of Stock or other capital readjustment, payment of stock
           dividend, stock split, combination of shares or recapitalization or
           other increase or reduction of the number of shares of Stock
           outstanding without receiving compensation therefor in money,
           services or property, then the Committee shall adjust (i) the number
           of shares of Stock available under the Plan; (ii) the number of
           shares available under any limits; (iii) the number of shares of
           Stock subject to outstanding (non-vested) Awards and to deferred
           Stock Awards; (iv) the number of shares of Stock subject to future
           grants; and (v) the per-share price under any outstanding Option
           Award.

     (b)   If the Company is reorganized, merged or consolidated or is party to
           a plan of exchange with another corporation, pursuant to which
           reorganization, merger, consolidation or plan of exchange the
           shareholders of the Company receive any shares of stock or other
           securities or property, or the Company shall distribute securities of
           another corporation to its shareholders, there shall be substituted
           for the shares subject to outstanding (non-vested) Awards and to
           deferred Stock Awards an appropriate number of shares of each class
           of stock or amount of other

                                      -7-

<PAGE>

           securities or property which were distributed to the shareholders of
           the Company in respect of such shares; provided that, upon the
           occurrence of a reorganization of the Company or any other event
           described in this paragraph (b), any successor to the Company shall
           be substituted for the Company.

     (c)   The existence of this Plan and the Awards granted hereunder shall not
           affect in any way the right or power of the Company or its
           shareholders to make or authorize any or all adjustments,
           recapitalizations, reorganizations or other changes in the Company's
           capital structure or its business, any merger or consolidation of the
           Company, any issue of bonds, debentures, preferred or prior
           preference stocks ahead of or affecting the Company's Stock or the
           rights thereof, the dissolution or liquidation of the Company, any
           sale or transfer of all or any part of its assets or business, or any
           other corporate act or proceeding, whether of a similar character or
           otherwise.

     (d)   Except as expressly provided by the terms of this Plan, the issue by
           the Company of shares of stock of any class, or securities
           convertible into shares of stock of any class, for cash or property
           or for labor or services, either upon direct sale, upon the exercise
           of rights or warrants to subscribe therefor or upon conversion of
           shares or obligations of the Company convertible into such shares or
           other securities, shall not affect, and no adjustment by reason
           thereof shall be made with respect to Awards then outstanding
           hereunder.

     4.5.  Limit on Distribution. Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:

     (a)   Notwithstanding any other provision of the Plan, the Company shall
           have no liability to issue any shares of Stock under the Plan or make
           any other distribution of benefits under the Plan unless such
           delivery or distribution would comply with all applicable laws and
           the applicable requirements of any securities exchange or similar
           entity.

     (b)   The Committee shall add such conditions and limitations to any Award
           to any Participant who is subject to Section 16(a) and 16(b) of the
           Securities Exchange Act of 1934, as is necessary to comply with
           Section 16(a) or 16(b) and the rules and regulations thereunder or to
           obtain any exemption therefrom.

     (c)   To the extent that the Plan provides for issuance of certificates to
           reflect the transfer of shares of Stock, the transfer of such shares
           may, at the direction of the Committee, be effected on a
           non-certificated basis, to the extent not prohibited by the
           provisions of Rule 16b-3, applicable local law, the applicable rules
           of any stock exchange, or any other applicable rules.

     4.6.  Taxes. All Awards and other payments under the Plan are subject to
all applicable taxes.

     4.7.  Distributions to Disabled Persons. Notwithstanding any other
provision of the Plan, if, in the Committee's opinion, a Participant or other
person entitled to benefits under the

                                      -8-

<PAGE>

Plan is under a legal disability or is in any way incapacitated so as to be
unable to manage his financial affairs, the Committee may direct that payment be
made to a relative or friend of such person for his benefit until claim is made
by a conservator or other person legally charged with the care of his person or
his estate, and such payment or distribution shall be in lieu of any such
payment to such Participant or other person. Thereafter, any benefits under the
Plan to which such Participant or other person is entitled shall be paid to such
conservator or other person legally charged with the care of his person or his
estate.

     4.8.  Transferability. Awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution.

     4.9.  Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with Section 5.

     4.10. Form and Time of Elections. Any election required or permitted under
the Plan shall be in writing, and shall be deemed to be filed when delivered to
the Secretary of the Company. Any deferral election made under Supplement A
shall be irrevocable after it is filed with respect to the Plan Year for which
it is filed, and such deferral shall remain in effect and be irrevocable with
respect to any future Plan Year unless a new election with respect to such Plan
Year is filed in accordance with rules established by the Committee, in which
case such new election shall be irrevocable with respect to such Plan Year.

     4.11. Agreement With Company. Each Award of Stock granted under Sections 2
and 3 shall be evidenced by an Agreement (an "Agreement") duly executed on
behalf of the Company and by the Participant to whom such Award is granted and
dated as of the applicable date of grant. Each Agreement shall comply with and
be subject to the terms of the Plan.

     4.12. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

     4.13. Action by Company. Any action required or permitted to be taken by
the Company shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly
authorized to act for the board, by a duly authorized officer of the Board, or
(except to the extent prohibited by the provisions of Rule 16b-3, applicable
local law, the applicable rules of any stock exchange, or any other applicable
rules) by a duly authorized officer of the Company.

     4.14. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

                                    SECTION 5
                                    ---------

                                    COMMITTEE
                                    ---------

                                      -9-

<PAGE>

     5.1.  Selection of Committee. The Committee shall be selected by the Board,
and shall consist of not less than two members of the Board.

     5.2.  Powers of Committee. The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee. The
Committee will have the authority to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the Plan.

     5.3.  Information to be Furnished to Committee. The Company shall furnish
the Committee with such data and information as may be required for it to
discharge its duties. The records of the Company as to the period of a
Director's service shall be conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to benefits under the Plan
must furnish the Committee such evidence, data or information as the Committee
considers desirable to carry out the terms of the Plan.

     5.4.  Liability and Indemnification of Committee. No member or authorized
delegate of the Committee shall be liable to any person for any action taken or
omitted in connection with the administration of the Plan unless attributable to
his own fraud or willful misconduct; nor shall the Company be liable to any
person for any such action unless attributable to fraud or willful misconduct on
the part of a director or employee of the Company. The Committee, the individual
members thereof, and persons acting as the authorized delegates of the Committee
under the Plan, shall be indemnified by the Company, to the fullest extent
permitted by law, against any and all liabilities, losses, costs and expenses
(including legal fees and expenses) of whatsoever kind and nature which may be
imposed on, incurred by or asserted against the Committee or its members or
authorized delegates by reason of the performance of a Committee function if the
Committee or its members or authorized delegates did not act dishonestly or in
willful violation of the law or regulation under which such liability, loss,
cost or expense arises. This indemnification shall not duplicate but may
supplement any coverage available under any applicable insurance.

                                    SECTION 6
                                    ---------

                            AMENDMENT AND TERMINATION
                            -------------------------

     The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 4.4 (relating to certain adjustments to shares), no
amendment or termination may adversely affect the rights of any Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board. Notwithstanding the provisions of this Section 6, in no
event shall the provisions of the Plan relating to Awards under the Plan be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act, or the rules thereunder;
provided, however, that the limitation set forth in this sentence shall be
applied only to the extent required under SEC Rule 16b-3(c)(2)(ii)(B) or any
successor provision thereof.

                                      -10-

<PAGE>

                                    SECTION 7
                                    ---------

                                  DEFINED TERMS
                                  -------------

     For purposes of the Plan, the terms listed below shall be defined as
follows:

     (a)   Award. The term "Award" shall mean the Retainer Award, the Option
           Award, the Committee Chairman Award, and the Meeting Award granted to
           any person under the Plan.

     (b)   Board. The term "Board" shall mean the Board of Directors of the
           Company.

     (c)   Change in Control. The term "Change in Control" shall mean the
           occurrence of any one of the following events:

           (i)   any "person," as such term is used in Sections 3(a)(9) and
                 13(d) of the Securities Exchange Act of 1934, becomes a
                 "beneficial owner," as such term is used in Rule 13d-3
                 promulgated under that act, of 50% or more of the Voting Stock
                 (as defined below) of the Company;

           (ii)  the majority of the Board consists of individuals other than
                 Incumbent Directors, which term means the members of the Board
                 on the date of this Agreement; provided that any person
                 becoming a director subsequent to such date whose election or
                 nomination for election was supported by three-quarters of the
                 directors who then comprised the Incumbent Directors shall be
                 considered to be an Incumbent Director;

           (iii) the Company adopts any plan of liquidation providing for the
                 distribution of all or substantially all of its assets;

           (iv)  all or substantially all of the assets or business of the
                 Company is disposed of pursuant to a merger, consolidation or
                 other transaction (unless the shareholders of the Company
                 immediately prior to such merger, consolidation or other
                 transaction beneficially own, directly or indirectly, in
                 substantially the same proportion as they owned the Voting
                 Stock of the Company, all of the Voting Stock or other
                 ownership interests of the entity or entities, if any, that
                 succeed to the business of the Company); or

           (v)   the Company combines with another company and is the surviving
                 corporation but, immediately after the combination, the
                 shareholders of the Company immediately prior to the
                 combination hold, directly or indirectly, 50% or less of the
                 Voting Stock of the combined company (there being excluded from
                 the number of shares held by such shareholders, but not from
                 the Voting Stock of the combined company, any shares received
                 by Affiliates (as defined below) of such other company in
                 exchange for stock of such other company).

                                      -11-

<PAGE>

For the purpose of this definition of "Change in Control", (I) an "Affiliate" of
a person or other entity shall mean a person or other entity that directly or
indirectly controls, is controlled by, or is under common control with the
person or other entity specified and (II) "Voting Stock" shall mean capital
stock of any class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the directors of a
corporation.

     (d)   Date of Termination. A Participant's "Date of Termination" shall be
           the day following the last day on which he serves as a Director.

     (e)   Director. The term "Director" means a member of the Board.

     (f)   Disability. A Participant shall be considered to have a "Disability"
           during the period in which he is unable, by reason of a medically
           determinable physical or mental impairment, to engage in any
           substantial gainful activity, which condition, in the opinion of a
           physician selected by the Committee, is expected to have a duration
           of not less than 120 days.

     (g)   Dollars. As used in the Plan, the term "dollars" or numbers preceded
           by the symbol "$" shall mean amounts in United States Dollars.

     (h)   Effective Date. The "Effective Date" means the date on which
           Directors begin their yearly term of office on the Board following
           their election at the Company's 1996 annual shareholders meeting.

     (i)   Eligible Director. Each Director who is not an employee of the
           Company or any Related Company shall be an "Eligible Director".

     (j)   Fair Market Value. The "Fair Market Value" of a share of Stock of the
           Company as of any date shall be the closing market composite price
           for such Stock as reported for the New York Stock Exchange -
           Composite Transactions on that date or, if Stock is not traded on
           that date, on the next preceding date on which Stock was traded.

     (k)   Participant. A "Participant" is any person who has received an Award
           under the Plan.

     (l)   Plan Year. The term "Plan Year" means the period (i) beginning on the
           date on which members of the Board begin their yearly term as Board
           members following the election of Directors at the Company's annual
           general meeting of shareholders, which, unless otherwise specifically
           provided, shall be the date of such shareholder meeting, and (ii)
           ending on the day immediately prior to the first day of the following
           Plan Year. The first Plan Year shall begin on the Effective Date.

     (m)   Plan Year Quarter. For any Plan Year, the first Plan Year Quarter
           shall begin on the first day of the plan year, and shall end on the
           90th day of the Plan Year; the second Plan Year Quarter shall begin
           on the 91st day of the Plan Year, and shall end on the 180th day of
           the Plan Year; the third Plan Year Quarter shall begin on

                                      -12-

<PAGE>

           the 181st day of the Plan Year, and shall end on the 270th day of the
           Plan Year; and the fourth Plan Year Quarter shall begin on the 271st
           day of the Plan Year, and shall end on the last day of the Plan Year.
           Notwithstanding the foregoing, with respect to only the 1999 Plan
           Year, there shall be an additional Plan Year Quarter, so that the
           fourth Plan Year Quarter shall begin on the 271st day of the Plan
           Year, and shall end on the 360th day of the Plan Year; and the fifth
           Plan Year Quarter shall begin on the 361st day of the Plan Year, and
           shall end on the last day of the Plan Year.

     (n)   Related Companies. The term "Related Company" means any company
           during any period in which it is a "subsidiary corporation" (as that
           term is defined in Code section 424(f)) with respect to the Company.

     (o)   SEC. "SEC" shall mean the Securities and Exchange Commission.

     (p)   Stock. The term "Stock" shall mean shares of common stock of the
           Company.

                                      -13-

<PAGE>

                                  SUPPLEMENT A
                                  ------------
                                ELECTIVE DEFERRAL
                                -----------------

                                    [Diamond]

                                DEFERRAL ELECTION
                                -----------------

     A-1-1. General. An individual who is otherwise entitled to receive a
Retainer Award or a Committee Chairman Award, or who is otherwise eligible to
receive cash payment for services provided as a Director ("Cash Compensation"),
may elect to defer delivery of all or a portion of such shares of Stock and such
cash, subject to the following terms of this Section A-

     A-1-2. Stock Deferral Election.

An individual who is an Eligible Director on the first day of a Plan Year may
elect to defer the receipt of all or a portion of the Stock awarded as the
Retainer Award for the Plan Year, to defer receipt of all or a portion of the
Stock awarded as the Meeting Award for the Plan Year, or to defer the receipt of
all or a portion of the Stock awarded as a Committee Chairman Award for any
quarter of a Plan Year, by filing a deferral election with respect to the Plan
Year at such time and in such form as established by the Committee; provided,
however, that such election shall be effective only with respect to compensation
payable after the date such election is filed.

An individual who becomes an Eligible Director on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Stock awarded as
the Retainer Award for the remainder of the year by filing a deferral election
with respect to the remainder of the year at such time and in such form as
established by the Committee; provided, however, that such election shall be
effective only with respect to compensation payable after the date such election
is filed.

An individual who becomes a Committee Chairman on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Committee Chairman
Award for the remainder of the year by filing a deferral election prior to the
date on which he becomes Committee Chairman; and, by filing a deferral election
within 30 days after becoming a Committee Chairman, he may defer receipt of the
portion of the Committee Chairman Award for the portion of the Plan Year
following the 30-day period.

An individual who becomes an Eligible Director on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Meeting Award for
the remainder of the year by filing a deferral election with respect to the
remainder of the year at such time and in such form as established by the
Committee; provided, however, that such election shall be effective only with
respect to compensation payable after the date such election is filed.

     A-1-3. Cash Deferral Election.

(a)  An election to defer the receipt of all or a portion of the Cash
     Compensation for any Plan year shall be filed with respect to a Plan Year
     at such time and in such form as

<PAGE>

     established by the Committee; provided, however, that such election shall
     be effective only with respect to Cash Compensation payable after the date
     such election is filed.

(b)  An individual who becomes an Eligible Director on a date other than the
     first day of a Plan Year may elect to defer all or a portion of the Cash
     Compensation for the remainder of the year by filing a deferral election
     with respect to the remainder of the year at such time and in such form as
     established by the Committee; provided, however, that such election shall
     be effective only with respect to Cash Compensation payable after the date
     such election is filed.

                                    [Diamond]

                                    ACCOUNTS
                                    --------

     A-2-1. Stock Account. A Stock Account shall be maintained on behalf of each
Participant who elects to defer the distribution of shares of Stock under this
Supplement A, for the period during which delivery of shares of Stock is
deferred. A Participant's Stock Account shall be subject to the following
adjustments:

The Stock Account will be credited with Share Units equal to the number of
shares of Stock as to which the Participant has elected deferred receipt, with
such Share Units to be credited as of the date on which the shares would
otherwise have been delivered to him in the absence of the deferral.

As of each dividend record date for the Stock following the date any Share Units
are credited to the Participant's Stock Account, and prior to the date of
distribution of shares of Stock with respect to those Share Units, the
Participant's Stock Account shall be credited with additional Share Units
(including fractional Share Units) equal to (i) the amount of the dividend that
would be payable with respect to the number of shares of Stock equal to the
number of Share Units credited to the Participant's Stock Account on the
dividend record date; divided by (ii) the Fair Market Value of a share of Stock
on the date of payment of the dividend.

As of the date of any distribution of shares of Stock with respect to a
Participant's Stock Account under Section A-3, the Share Units credited to a
Participant's Stock Account shall be reduced by the number of Shares so
distributed to the Participant.

     A-2-2. Cash Account. A Cash Account shall be maintained on behalf of each
Participant who elects to defer the distribution of cash under this Supplement
A, for the period during which delivery of cash is deferred. A Participant's
Cash Account shall be credited with interest, with the applicable interest rate
for any calendar year equal to the prime rate as of the first business day of
that calendar year, as reported in The Wall Street Journal. As of the date of
any distribution with respect to a Participant's Account under Section A-3, the
balance credited to a Participant's Account shall be reduced by the amount of
the distribution to the Participant.

     A-2-3. Statement of Accounts. As soon as practicable after the end of each
Plan Year, the Company shall provide each Participant having one or more
Accounts under the Plan with a statement of the transactions in his Accounts
during that year and his Account balances as of the end of the year.

<PAGE>

                                    [Diamond]

                                  DISTRIBUTIONS
                                  -------------

     A-3-1. General.

..    Subject to the terms of this Section A-3, a Participant shall specify, as
     part of his deferral election with respect to Stock Awards, and as part of
     his deferral election with respect to Cash Compensation, the time of
     distribution of the amounts deferred pursuant to such election; provided,
     however, that distribution of shares of Stock, and of Cash Compensation,
     shall be made in a lump sum not later than the first anniversary of the
     date on which the individual ceases to be a Director; and further provided
     that a Participant may elect only a single date for distribution of all of
     his deferred Stock Awards and only a single date for distribution of all of
     his deferred Cash Compensation under the Plan, provided that the
     distribution date for the Participant's deferred Stock Awards and for
     deferred Cash Compensation may differ.

..    At the time of distribution of deferred shares in accordance with the
     Participant's election, the Participant shall receive a distribution of
     shares of Stock equal to the number of share units credited to his Account
     immediately prior to such distribution. If the scheduled distribution date
     would otherwise occur after a dividend record date but before the payment
     of the dividend, distribution shall be deferred (not more than 30 days)
     until the dividend is paid.

..    At the time of distribution of Cash Compensation in accordance with the
     Participant's election, the Participant shall receive the amount then
     credited to the Participant's Cash Account as of the date of distribution.

..    In determining a Participant's right to distributions of stock under this
     Section A-3, the vesting provisions of subsection 2.2 of the Plan shall
     apply to the share units credited to the Participant's Stock Account as
     though each unit represented one share of Stock, and with all units
     attributable to payment of dividends being fully vested as of the date they
     are credited to the Participant's Stock Account.

..    Notwithstanding the foregoing provisions of this Section A-3, if any share
     units are credited to a Participant's Stock Account as of the date of a
     Change in Control, the Participant shall receive a distribution of shares
     of Stock equal to the number of such share units. Such distribution shall
     be in settlement of the Participant's rights to distribution under this
     Section A-3, provided that if the record date for a dividend is prior to a
     Change in Control, but the dividend payment is to occur after such Change
     in Control, the additional shares attributable to such dividends shall be
     distributed as soon as practicable thereafter.

     A-3-2. Limitation of Implied Rights. Neither the Participant nor any other
person shall, by reason of deferral of shares of Stock or the deferral of Cash
Compensation, under this Supplement A, acquire any right in or title to any
assets, funds or property of the Company whatsoever prior to the date such
shares are distributed. A Participant shall have only a

<PAGE>

contractual right to the shares and cash, if any, distributable under the Plan,
unsecured by any assets of the Company. Nothing contained in the Plan shall
constitute a guarantee by the Company that the assets of the Company shall be
sufficient to provide any benefits to any person.

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