Document:

RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.

                                  as Purchaser,

                                       and

                         RESIDENTIAL FUNDING CORPORATION

                                    as Seller

                          HOME LOAN PURCHASE AGREEMENT
                                        -

                          Dated as of February 1, 2001

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<TABLE>
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                                TABLE OF CONTENTS
                                                                                          Page

                                          ARTICLE I

                                         DEFINITIONS

<S>     <C>                                                                                 <C>
Section 1.1.   Definitions...................................................................1

                                   ARTICLE II

                          SALE OF HOME LOANS AND RELATED PROVISIONS

Section 2.1.   Sale of Home Loans............................................................2

Section 2.2.   Payment of Purchase Price.....................................................4

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES;
                               REMEDIES FOR BREACH

Section 3.1.   Seller Representations and Warranties.........................................4

                                   ARTICLE IV

                               SELLER'S COVENANTS

Section 4.1.   Covenants of the Seller......................................................12

                                    ARTICLE V

                                    SERVICING

Section 5.1.   Servicing....................................................................12

                                   ARTICLE VI

                      LIMITATION ON LIABILITY OF THE SELLER

Section 6.1.   Limitation on Liability of the Seller........................................12

                                            -i-

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                                                                                          Page

                                         ARTICLE VII

                                         TERMINATION

Section 7.1.   Termination..................................................................13

                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

Section 8.1.   Amendment....................................................................13

Section 8.2.   GOVERNING LAW................................................................13

Section 8.3.   Notices......................................................................13

Section 8.4.   Severability of Provisions...................................................14

Section 8.5.   Relationship of Parties......................................................14

Section 8.6.   Counterparts.................................................................14

Section 8.7.   Further Agreements...........................................................14

Section 8.8.   Intention of the Parties.....................................................14

Section 8.9.   Successors and Assigns; Assignment of This Agreement.........................15

Section 8.10.  Survival.....................................................................15

Exhibits

Exhibit 1             Home Loan Schedule

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                                            -1-

               This HOME LOAN PURCHASE AGREEMENT (this "Agreement" or "Home Loan
Purchase Agreement"),  dated as of February 1, 2001, is made between Residential
Funding  Corporation (the "Seller") and Residential  Funding Mortgage Securities
II, Inc. (the "Purchaser").

                                     W I T N E S S E T H :
                                     - - - - - - - - - -

               WHEREAS, the Seller owns Home Loans and the Related Documents for
the Home Loans indicated on the Home Loan Schedule  attached as Exhibit 1 hereto
(collectively,  the "Home Loans"), including rights to (a) any property acquired
by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds
of any insurance policies covering the Home Loans;

               WHEREAS,  the parties hereto desire that the Seller sell the Home
Loans to the Purchaser pursuant to the terms of this Agreement together with the
Related Documents on the Closing Date;

               WHEREAS,  pursuant  to the  terms  of the  Trust  Agreement,  the
Purchaser  will  sell the Home  Loans to the  Issuer  in  exchange  for the cash
proceeds of the Securities;

               WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will  issue  and  transfer  to  or  at  the  direction  of  the  Depositor,  the
Certificates;

     WHEREAS,  pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and

               WHEREAS,  pursuant to the terms of the Servicing  Agreement,  the
Master  Servicer  will  service  the Home Loans  directly or through one or more
Subservicers.

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

                                    ARTICLE I

                                   DEFINITIONS

               Section  1.1.  Definitions.  For all  purposes  of this Home Loan
Purchase Agreement,  except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the  meanings  assigned  to such  terms  in the  Definitions  contained  in
Appendix A to the  Indenture  dated as of February  22, 2001 (the  "Indenture"),
between Home Loan Trust  2001-HI1,  as issuer,  and The Chase Manhattan Bank, as
indenture  trustee,  which  is  incorporated  by  reference  herein.  All  other
capitalized terms used herein shall have the meanings specified herein.

<PAGE>

                                   ARTICLE II

                    SALE OF HOME LOANS AND RELATED PROVISIONS

               Section 2.1.  Sale of Home Loans.

               (a) The Seller,  by the execution and delivery of this Agreement,
does hereby sell,  assign,  set over,  and  otherwise  convey to the  Purchaser,
without  recourse,  all of its right,  title and  interest  in, to and under the
following,  and wherever  located:  (i) the Home Loans,  all  interest  accruing
thereon and all collections in respect thereof  received on or after the Cut-off
Date;  (ii)  property  which  secured a Home Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure;  (iii) the interest of the Seller in
any  insurance  policies in respect of the Home Loans;  and (iv) all proceeds of
the foregoing.  Such conveyance  shall be deemed to be made, with respect to the
Cut-off Date Loan  Balances,  as of the Closing Date,  subject to the receipt by
the Seller of  consideration  therefor as provided  herein  under  clause (b) of
Section 2.2.

               (b) In  connection  with  such  conveyance,  the  Seller  further
agrees,  at its own expense,  on or prior to the Closing Date to indicate in its
books and records that the Home Loans have been sold to the  Purchaser  pursuant
to this Agreement and to deliver to the Purchaser true and complete lists of all
of the Home Loans  specifying for each Home Loan (i) its account number and (ii)
its Cut-off  Date Loan  Balance.  Such  lists,  which form part of the Home Loan
Schedule,  shall  be  marked  as  Exhibit  1 to this  Agreement  and are  hereby
incorporated into and made a part of this Agreement.

               (c) In connection with such conveyance by the Seller,  the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Custodian,  on
or before the Closing Date, the following  documents or instruments with respect
to each Home Loan:

                    (i) the original  Mortgage Note endorsed without recourse to
        the Indenture  Trustee and showing an unbroken chain of endorsement from
        the  originator  thereof to the Person  endorsing it or, with respect to
        any  Home  Loan  as  to  which  the  original  Mortgage  Note  has  been
        permanently  lost or destroyed  and has not been  replaced,  a Lost Note
        Affidavit  from the related seller or  Residential  Funding  Corporation
        stating the  original  Mortgage  Note was lost,  misplaced  or destroyed
        together with a copy of such Note;

               (ii) the original Mortgage with evidence of recording thereon, or
          a copy of the original Mortgage with evidence of recording thereon;

                  (iii)  assignments  (which  may be  included  in  one or  more
        blanket  assignments  if  permitted by  applicable  law) of the Mortgage
        recorded to "The Chase  Manhattan  Bank as  indenture  trustee"  c/o the
        Seller at an address specified by the Seller; and

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                                            -3-

                   (iv)  originals  of  any   intervening   assignments  of  the
        Mortgage, with evidence of recording thereon, or a copy of such original
        intervening assignment with evidence of recording indicated thereon; and

                    (v)  a  true   and   correct   copy  of   each   assumption,
        modification,  consolidation or substitution agreement, if any, relating
        to the Home Loan.

               Within the time period for the review of each  Mortgage  File set
forth in Section 2.3 of the Custodial Agreement,  if a defect or omission in any
Mortgage File is discovered  which may materially and adversely affect the value
of the related Home Loan, or the interests of the Indenture  Trustee (as pledgee
of the Home  Loans),  the  Noteholders,  the  Certificateholders  or the  Credit
Enhancer  in such Home Loan,  including  the  Seller's  failure  to deliver  any
document  required to be delivered to the  Custodian on behalf of the  Indenture
Trustee  (provided  that a Mortgage  File will not be deemed to contain a defect
for an  unrecorded  assignment  under  clause  (iii)  above  if the  Seller  has
submitted such assignment for recording or if such assignment is not required to
be recorded pursuant to the terms of the following paragraph),  the Seller shall
cure such defect,  repurchase the related Home Loan at the  Repurchase  Price or
substitute an Eligible  Substitute  Loan for the related Home Loan upon the same
terms  and   conditions  set  forth  in  Section  3.1  hereof  for  breaches  of
representations and warranties as to the Home Loans. As set forth in Section 2.3
of the Custodial Agreement, the Custodian shall deliver to the Indenture Trustee
a  certificate  (the "Interim  Certification")  to the effect that all documents
required to be delivered  pursuant to this Subsection  2.1(c) have been executed
and received and that such documents  relate to the Home Loans identified on the
Home Loan Schedule,  except for any exceptions  listed on Schedule B attached to
such Interim Certification.

               Within 60 days after the  receipt by the Master  Servicer  of the
recording  information,  the Seller at its own expense shall complete and submit
for recording in the appropriate public office for real property records each of
the assignments  referred to in clause (iii) above.  While such assignment to be
recorded is being  recorded,  the  Custodian  shall  retain a photocopy  of such
assignment.  If any  assignment is lost or returned  unrecorded to the Custodian
because of any defect  therein,  the Seller is required to prepare a  substitute
assignment  or cure such defect,  as the case may be, and the Seller shall cause
such assignment to be recorded in accordance with this paragraph.

               In the event that the Seller  delivers to the Custodian on behalf
of the Indenture  Trustee any Mortgage  Note or assignment in blank,  the Seller
shall, or shall cause the Custodian to, complete the endorsement of the Mortgage
Note and the assignment in conjunction with the Interim  Certification issued by
the Custodian.

               In  instances   where  an  original   Mortgage  or  any  original
intervening  assignment  of Mortgage  was not, in  accordance  with clause (ii),
(iii),  (iv) or (v) above (or copies thereof as permitted in this section 2.1(c)
above), delivered by the Seller to the respective Custodian prior to

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                                            -4-

or concurrently  with the execution and delivery of this  Agreement,  the Seller
will deliver or cause to be delivered  the  originals of such  documents to such
Custodian promptly upon receipt thereof.

               The Purchaser  hereby  acknowledges  its acceptance of all right,
title and interest to the property, conveyed to it pursuant to this Section 2.1.

               (d) The parties  hereto  intend that the  transactions  set forth
herein  constitute  a sale by the Seller to the  Purchaser  of all the  Seller's
right,  title and interest in and to the Home Loans and other property as and to
the extent  described  above. In the event the transactions set forth herein are
deemed not to be a sale,  the Seller  hereby  grants to the Purchaser a security
interest in all of the Seller's  right,  title and interest in, to and under the
Home Loans and such other  property,  to secure all of the Seller's  obligations
hereunder,  and this  Agreement  shall  constitute  a security  agreement  under
applicable  law. The Seller agrees to take or cause to be taken such actions and
to  execute  such  documents,  including  without  limitation  the filing of all
necessary  UCC-1  financing  statements  filed in the State of Minnesota  (which
shall have been submitted for filing as of the Closing Date),  any  continuation
statements with respect thereto and any amendments thereto required to reflect a
change in the name or  corporate  structure  of the  Seller or the filing of any
additional UCC-1 financing  statements due to the change in the principal office
or jurisdiction of incorporation of the Seller,  as are necessary to perfect and
protect the Purchaser's interests in each Home Loan and the proceeds thereof.

               Section 2.2.  Payment of Purchase Price.

               (a) The  "Purchase  Price" for the Home Loans  shall be an amount
equal to  $250,032,672.60  in  immediately  available  funds  together  with the
Certificates.

               (b) In  consideration  of the  sale of the  Home  Loans  from the
Seller to the  Purchaser on the Closing  Date,  the  Purchaser  shall pay to the
Seller on the Closing Date by wire transfer of immediately  available funds to a
bank account designated by the Seller, the amount specified above in clause (a);
provided,  that  such  payment  may be on a net  funding  basis if agreed by the
Seller and the Purchaser.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES;
                               REMEDIES FOR BREACH

     Section 3.1. Seller  Representations and Warranties.  The Seller represents
and warrants to the Purchaser, as of the Closing Date (or if otherwise specified
below, as of the date so specified):

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                                            -5-

        (a)    As to the Seller:

                    (i) The  Seller is a  corporation  duly  organized,  validly
        existing  and in good  standing  under the laws of the State of Delaware
        and has the  corporate  power  to own its  assets  and to  transact  the
        business in which it is currently engaged.  The Seller is duly qualified
        to do business as a foreign  corporation and is in good standing in each
        jurisdiction in which the character of the business  transacted by it or
        properties  owned or leased by it  requires  such  qualification  and in
        which the failure to so qualify would have a material  adverse effect on
        the business,  properties,  assets or condition  (financial or other) of
        the Seller;

                   (ii) The Seller has the power and authority to make, execute,
        deliver and perform its obligations  under this Agreement and all of the
        transactions  contemplated  under  this  Agreement,  and has  taken  all
        necessary  corporate  action to authorize  the  execution,  delivery and
        performance  of  this  Agreement.  When  executed  and  delivered,  this
        Agreement will constitute the legal, valid and binding obligation of the
        Seller  enforceable in accordance with its terms,  except as enforcement
        of such terms may be limited by  bankruptcy,  insolvency or similar laws
        affecting  the  enforcement  of creditors'  rights  generally and by the
        availability of equitable remedies;

                  (iii) The Seller is not  required to obtain the consent of any
        other Person or any consent, license, approval or authorization from, or
        registration or declaration with, any governmental authority,  bureau or
        agency in connection with the execution, delivery, performance, validity
        or enforceability of this Agreement, except for such consents, licenses,
        approvals or authorizations,  or registrations or declarations, as shall
        have been obtained or filed, as the case may be;

                   (iv) The  execution  and delivery of this  Agreement  and the
        performance of the transactions  contemplated  hereby by the Seller will
        not violate any provision of any existing law or regulation or any order
        or decree of any court  applicable to the Seller or any provision of the
        Certificate of  Incorporation  or Bylaws of the Seller,  or constitute a
        material breach of any mortgage,  indenture, contract or other agreement
        to which the Seller is a party or by which the Seller may be bound;

                    (v) No litigation or administrative  proceeding of or before
        any court, tribunal or governmental body is currently pending, or to the
        knowledge  of the Seller  threatened,  against  the Seller or any of its
        properties or with respect to this Agreement or the  Certificates  which
        in the opinion of the Seller has a reasonable likelihood of resulting in
        a  material  adverse  effect on the  transactions  contemplated  by this
        Agreement;

                   (vi) This  Agreement  constitutes a legal,  valid and binding
        obligation of the Seller,  enforceable  against the Seller in accordance
        with its terms, except as enforceability

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                                            -6-

        may be limited by  applicable  bankruptcy,  insolvency,  reorganization,
        moratorium  or other  similar laws now or hereafter in effect  affecting
        the  enforcement  of  creditors'  rights in  general  and except as such
        enforceability  may be limited by general  principles of equity (whether
        considered in a proceeding at law or in equity);

                  (vii)  This   Agreement   constitutes  a  valid  transfer  and
        assignment  to the  Purchaser  of all right,  title and  interest of the
        Seller in, to and under the Home Loans,  all monies due or to become due
        with  respect  thereto,  and all  proceeds  of such  Cut-off  Date  Loan
        Balances  with respect to the Home Loans and such funds as are from time
        to time  deposited in the Custodial  Account  (excluding  any investment
        earnings  thereon)  as  assets  of the  Trust  and  all  other  property
        specified  in the  definition  of "Trust" as being part of the corpus of
        the Trust conveyed to the Purchaser by the Seller;

                 (viii) The Seller is not in default  with  respect to any order
        or  decree  of any  court or any  order,  regulation  or  demand  or any
        federal,  state,  municipal or governmental  agency, which default might
        have  consequences  that  would  materially  and  adversely  affect  the
        condition  (financial  or  other)  or  operations  of the  Seller or its
        properties or might have  consequences  that would materially  adversely
        affect its performance hereunder; and

                     (The  Seller  has not  transferred  the  Home  Loans to the
         Purchaser  with any  intent  to  hinder,  delay or  defraud  any of its
         creditors.

        (b)    As to the Home Loans:

                    (i) The information set forth in the Home Loan Schedule with
        respect to each Home Loan is true and correct in all  material  respects
        as of the date or dates respecting which such information is furnished;

                   (ii)      [Reserved];

                  (iii) The related Mortgage Note and the Mortgage have not been
        assigned or pledged,  the Seller has good and  marketable  title thereto
        and the  Seller is the sole  owner and  holder of the Home Loan free and
        clear  of  any  and  all  liens,  claims,  encumbrances,   participation
        interests,  equities,  pledges,  charges or  security  interests  of any
        nature  and has full right and  authority,  under all  governmental  and
        regulatory  bodies  having   jurisdiction  over  the  ownership  of  the
        applicable  Home  Loans to sell and  assign  the same  pursuant  to this
        Agreement;

               (iv) To the best of Seller's knowledge, there is no valid offset,
          defense or counterclaim of any obligor under any Mortgage;

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                                            -7-

               (v) To the best of  Seller's  knowledge,  there is no  delinquent
          recording or other tax or fee or  assessment  lien against any related
          Mortgaged Property;

               (vi) To the best of Seller's  knowledge,  there is no  proceeding
          pending or  threatened  for the total or partial  condemnation  of the
          related Mortgaged Property;

                  (vii)  To  the  best  of  Seller's  knowledge,  there  are  no
        mechanics'  or similar  liens or claims  which have been filed for work,
        labor or material affecting the related Mortgaged Property which are, or
        may be liens  prior or equal to, or  subordinate  with,  the lien of the
        related  Mortgage,  except liens which are fully insured  against by the
        title insurance policy referred to in clause (xi);

               (viii) As of the Cut-off Date,  none of the Home Loans were 30 or
          more days delinquent;

               (ix) For each Home Loan, the related  Mortgage File contains each
          of the documents and instruments specified to be included therein;

                    (x) The related  Mortgage  Note and the related  Mortgage at
        the time it was made complied in all material  respects with  applicable
        local, state and federal laws;

                   (xi) A policy  of  title  insurance  in the  form and  amount
        required by the Program  Guide was  effective  as of the closing of each
        Home Loan and each such  policy is valid and  remains  in full force and
        effect,  and a title search or other assurance of title customary in the
        relevant  jurisdiction was obtained with respect to each Home Loan as to
        which no title insurance policy or binder was issued;

                  (xii) None of the  Mortgaged  Properties is a mobile home that
        is  permanently  attached to its  foundation  and none of the  Mortgaged
        Properties  are  manufactured  housing  units  that are not  permanently
        attached to their foundation;

                 (xiii) Approximately 8.4% and 7.8%,  respectively,  of the Home
        Loans by Cut-off Date Loan Balance,  are secured by Mortgaged Properties
        located in Florida and California;

               (xiv)  Approximately  94.27% of the Home Loans,  by Cut-Off  Date
          Loan Balance, had a Combined Loan-to-Value Ratio in excess of 100%;

                   (xv)      [Reserved];

                  (xvi)      [Reserved];

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                                            -8-

               (xvii) None of the proceeds of any Home Loan were used to finance
          the purchase of single premium credit insurance policies;

               (xviii)  The  Seller  will  submit  for  filing  or  cause  to be
          submitted for filing UCC-1 financing statements in accordance with the
          terms of this Agreement;

               (xix) Each Mortgage is substantially similar one to the other and
          is an enforceable obligation of the related Mortgagor;

               (xx) To the best of Seller's  knowledge,  the  physical  property
          subject to each  Mortgage  is free of  material  damage and is in good
          repair;

                  (xxi) The Seller  has not  received a notice of default of any
        senior mortgage loan related to a Mortgaged  Property which has not been
        cured by a party other than the related Subservicer;

               (xxii) No Home Loan has a  prepayment  penalty  term that extends
          beyond five years after the date of origination;

                 (xxiiNone of the Home Loans are reverse Home Loans;

                 (xxiv) No Home Loan has a remaining term to stated  maturity of
        less than 58 months.  All of the Home Loans are fixed rate and are fully
        amortizing,  except for 0.2% that are Balloon  Payment loans.  As of the
        Cut-off  Date,  the Loan Rates on the Home Loans range between 9.10% per
        annum  and  20.40%  per  annum  and the  weighted  average  Loan Rate is
        approximately 13.9599% per annum. The weighted average remaining term to
        stated   maturity  of  the  Home  Loans  as  of  the  Cut-off   Date  is
        approximately 234 months;

                  (xxv)      [Reserved];

                 (xxvi) (A) Each Mortgaged  Property consists of a single parcel
        of  real  property  with a  single  family  residence  erected  thereon,
        attached or detached planned unit  development,  individual  condominium
        unit, attached or detached townhouse or rowhouse,  multifamily residence
        (two to four  units),  or  modular  unit;  (B) With  respect to the Home
        Loans, (i) no less than 2.20% (by Cut-off Date Loan Balance) are secured
        by real property  improved by individual  condominium  units and (ii) no
        less than  91.12% (by Cut-off  Date Loan  Balance) of the Home Loans are
        secured by real property with a single family residence erected thereon;

                (xxvii)  Approximately 99.88% of the Home Loans, by Cut-off Date
        Loan  Balance,  are  secured by second  mortgages  or deeds of trust and
        approximately 0.12% of the Home Loans, by Cut-off Date Loan Balance, are
        secured by first mortgages or deeds of trust;

<PAGE>

                                            -9-

               (xxviii)  If any of the Home  Loans are  secured  by a  leasehold
        interest,  with respect to each leasehold interest, the use of leasehold
        estates for residential  properties is an accepted  practice in the area
        where the related Mortgaged Property is located; residential property in
        such area  consisting of leasehold  estates is readily  marketable;  the
        lease is recorded and no party is in any way in breach of any  provision
        of such  lease;  the  leasehold  is in full  force and effect and is not
        subject to any prior lien or encumbrance by which the leasehold could be
        terminated;  and the remaining term of the lease does not terminate less
        than five years after the maturity date of such Home Loan.

                 (xxix) Each Subservicer meets all applicable requirements under
        the Servicing Agreement, is properly qualified to service the Home Loans
        and has been  servicing  the Home  Loans  prior to the  Cut-off  Date in
        accordance with the terms of the Program Guide;

                  (xxx) For each Home Loan, if required, as of the Cut-off Date,
        flood   insurance   has  been  obtained   which  meets  all   applicable
        requirements of Section 3.04 of the Servicing  Agreement.  For each Home
        Loan,  hazard  insurance  has been obtained  which meets all  applicable
        requirements of Section 3.04 of the Servicing Agreement;

                 (xxxi) There is no material default, breach, violation or event
        of  acceleration  existing  under  the  terms  of any  Mortgage  Note or
        Mortgage and no event which,  with notice and expiration of any grace or
        cure period, would constitute a material default,  breach,  violation or
        event of acceleration  under the terms of any Mortgage Note or Mortgage,
        and no such material default, breach, violation or event of acceleration
        has been  waived  by the  Seller  or by any  other  entity  involved  in
        originating or servicing a Home Loan;

                (xxxii) No  instrument of release or waiver has been executed in
        connection with the Home Loans,  and no Mortgagor has been released,  in
        whole or in part from its obligations in connection with a Home Loan;

               (xxxiii)  With  respect to each Home Loan that is a second  lien,
        either (i) no consent  for the Home Loan was  required  by the holder of
        the related  prior lien or liens or (ii) such consent has been  obtained
        and is contained in the Mortgage File;

                (xxxiv) With respect to each Home Loan, either (i) the Home Loan
        is  assumable  pursuant to the terms of the Mortgage  Note,  or (ii) the
        Home Loan  contains a customary  provision for the  acceleration  of the
        payment  of the unpaid  principal  balance of the Home Loan in the event
        the related Mortgaged  Property is sold without the prior consent of the
        mortgagee thereunder; and

                 (xxxv)  Each  Mortgage  File  either  contains  (a) an original
        Mortgage  Note or (b)  with  respect  to any Home  Loan as to which  the
        original Mortgage Note has been

<PAGE>

                                            -10-

        permanently  lost or destroyed  and has not been  replaced,  a Lost Note
        Affidavit together with a copy of such Mortgage Note.

        (c) Upon  discovery  by Seller or upon  notice from the  Purchaser,  the
Credit Enhancer,  the Issuer,  the Owner Trustee,  the Indenture  Trustee or any
Custodian,  as  applicable,  of a breach of any  representation  or  warranty in
clause (a) above which  materially  and  adversely  affects the interests of the
Securityholders  or the  Credit  Enhancer  in any Home Loan,  the Seller  shall,
within 45 days of its discovery or its receipt of notice of such breach,  either
(i) cure such  breach in all  material  respects or (ii) to the extent that such
breach  is  with  respect  to a Home  Loan or a  Related  Document,  either  (A)
repurchase  such  Home  Loan  from the  Trust at the  Repurchase  Price,  or (B)
substitute  one or more  Eligible  Substitute  Loans for such Home Loan, in each
case in the  manner and  subject to the  conditions  and  limitations  set forth
below.

               Upon  discovery by the Seller or upon notice from the  Purchaser,
the Credit Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian,  as  applicable,  of a breach of any  representation  or  warranty in
clause  (b) above  with  respect  to any Home Loan or upon the  occurrence  of a
Repurchase  Event that  materially  and  adversely  affects the interests of the
Securityholders  or the Credit  Enhancer or of the  Purchaser  in such Home Loan
(notice of which shall be given to the Purchaser by the Seller,  if it discovers
the same),  notwithstanding  the Seller's lack of knowledge  with respect to the
substance of such  representation  and warranty or Repurchase  Event, the Seller
shall,  within 90 days after the earlier of its  discovery  or receipt of notice
thereof, either cure such breach or Repurchase Event in all material respects or
either (i) repurchase such Home Loan from the Trust at the Repurchase  Price, or
(ii)  substitute  one or more Eligible  Substitute  Loans for such Home Loan, in
each case in the  manner and  subject to the  conditions  set forth  below.  The
Repurchase  Price for any such  Home Loan  repurchased  by the  Seller  shall be
deposited  or caused to be  deposited  by the Master  Servicer in the  Custodial
Account maintained by it pursuant to Section 3.02 of the Servicing Agreement.

               The Seller may only  substitute  an Eligible  Substitute  Loan or
Loans for a Deleted Loan pursuant to this Section  3.1(c) if the Seller  obtains
an Opinion of  Counsel  generally  to the  effect  that the  substitution  of an
Eligible  Substitute  Loan or Loans for a Deleted  Loan will not cause an entity
level  federal or state income tax to be imposed on the Trust.  The Seller shall
also  deliver  to the  Custodian  on behalf of the Trust,  with  respect to such
Eligible  Substitute  Loan or Loans,  the original  Mortgage  Note and all other
documents and  agreements as are required by Section  2.1(c),  with the Mortgage
Note endorsed as required by Section 2.1(c). No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Eligible Substitute Loans in the month of substitution shall not
be part of the Trust and will be retained by the Master Servicer and remitted by
the Master Servicer to the Seller on the next succeeding Payment Date,  provided
that a  payment  at  least  equal to the  applicable  Monthly  Payment  has been
received by the Trust,  for such month in respect of the Deleted  Loan.  For the
month of substitution,  distributions  to the Custodial  Account pursuant to the
Servicing  Agreement will include the Monthly  Payment due on a Deleted Loan for
such month and thereafter the Seller shall be

<PAGE>

                                            -11-

entitled to retain all amounts  received in respect of such  Deleted  Loan.  The
Master  Servicer  shall amend or cause to be amended  the Home Loan  Schedule to
reflect the removal of such  Deleted Loan and the  substitution  of the Eligible
Substitute  Loan or Loans and the Master Servicer shall deliver the amended Home
Loan Schedule to the Indenture  Trustee.  Upon such  substitution,  the Eligible
Substitute Loan or Loans shall be subject to the terms of this Agreement and the
Servicing Agreement in all respects, the Seller shall be deemed to have made the
representations  and  warranties  with respect to the Eligible  Substitute  Loan
contained  herein set forth in clauses  (iii) through  (xxxv) of Section  3.1(b)
(other than clauses (viii), (xiii), (xiv), (xxiv),  (xxvi)(B) and (xxvii)) as of
the date of  substitution,  and the Seller shall be obligated to  repurchase  or
substitute for any Eligible  Substitute Loan as to which a Repurchase  Event has
occurred as provided herein.  In connection with the substitution of one or more
Eligible  Substitute  Loans for one or more Deleted Loans,  the Master  Servicer
will determine the amount (such amount, a "Substitution  Adjustment Amount"), if
any, by which the aggregate  principal  balance of all such Eligible  Substitute
Loans as of the  date of  substitution  is less  than  the  aggregate  principal
balance of all such Deleted Loans (after application of the principal portion of
the Monthly Payments due in the month of substitution that are to be distributed
to the Custodial Account in the month of substitution). The Seller shall deposit
the  amount  of  such  shortfall  into  the  Custodial  Account  on  the  day of
substitution, without any reimbursement therefor.

               Upon receipt by the Indenture  Trustee on behalf of the Trust and
the Custodian of written  notification,  signed by a Servicing  Officer,  of the
deposit  of  such  Repurchase  Price  or of  such  substitution  of an  Eligible
Substitute Loan (together with the complete  related  Mortgage File) and deposit
of  any  applicable  Substitution  Adjustment  Amount  as  provided  above,  the
Custodian,  on behalf of the  Indenture  Trustee shall release to the Seller the
related Mortgage File for the Home Loan being repurchased or substituted for and
the  Indenture  Trustee on behalf of the Trust shall  execute  and deliver  such
instruments of transfer or assignment  prepared by the Master Servicer,  in each
case  without  recourse,  as shall be  necessary  to vest in the  Seller  or its
designee such Home Loan released  pursuant  hereto and thereafter such Home Loan
shall not be an asset of the Trust.

               It is understood  and agreed that the obligation of the Seller to
cure any breach,  or to repurchase or substitute  for, any Home Loan as to which
such a breach has occurred and is continuing  shall  constitute  the sole remedy
respecting   such  breach   available  to  the   Purchaser,   the  Issuer,   the
Certificateholders  (or the Owner  Trustee on behalf of the  Certificateholders)
and the  Noteholders  (or the  Indenture  Trustee on behalf of the  Noteholders)
against the Seller.

               It  is  understood  and  agreed  that  the   representations  and
warranties  set  forth  in  this  Section  3.1  shall  survive  delivery  of the
respective Mortgage Files to the Indenture Trustee, or the Custodian.

<PAGE>

                                            -12-

                                   ARTICLE IV

                               SELLER'S COVENANTS

               Section 4.1. Covenants of the Seller. The Seller hereby covenants
that,  except for the  transfer  hereunder,  the Seller  will not sell,  pledge,
assign or transfer to any other Person,  or grant,  create,  incur or assume any
Lien on any Home Loan,  or any  interest  therein.  The Seller  will  notify the
Indenture  Trustee,  as assignee of the Purchaser,  of the existence of any Lien
(other  than as  provided  above) on any Home Loan  immediately  upon  discovery
thereof; and the Seller will defend the right, title and interest of the Issuer,
as assignee of the Purchaser, in, to and under the Home Loans against all claims
of third parties claiming through or under the Seller;  provided,  however, that
nothing in this Section 4.1 shall be deemed to apply to any Liens for  municipal
or  other  local  taxes  and  other  governmental   charges  if  such  taxes  or
governmental  charges  shall not at the time be due and payable or if the Seller
shall currently be contesting the validity  thereof in good faith by appropriate
proceedings.

                                    ARTICLE V

                                    SERVICING

               Section  5.1.  Servicing.  The Seller will service the Home Loans
pursuant to the terms and conditions of the Servicing Agreement and will service
the Home  Loans  directly  or through  one or more  subservicers  in  accordance
therewith.

                                   ARTICLE VI

                      LIMITATION ON LIABILITY OF THE SELLER

               Section 6.1.  Limitation on Liability of the Seller.  None of the
directors,  officers,  employees  or  agents  of the  Seller  shall be under any
liability  to the  Purchaser,  it  being  expressly  understood  that  all  such
liability  is  expressly   waived  and  released  as  a  condition  of,  and  as
consideration for, the execution of this Agreement.  Except as and to the extent
expressly provided herein or in the Servicing Agreement, the Seller shall not be
under any liability to the Trust,  the Owner Trustee,  the Indenture  Trustee or
the Securityholders.  The Seller and any director, officer, employee or agent of
the  Seller  may rely in good  faith on any  document  of any kind  prima  facie
properly  executed and submitted by any Person  respecting  any matters  arising
hereunder.

<PAGE>

                                            -13-

                                   ARTICLE VII

                                   TERMINATION

               Section  7.1.   Termination.   The  respective   obligations  and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the  Seller's  indemnity  obligations  as provided  herein,  upon the
termination of the Owner Trust pursuant to the terms of the Trust Agreement.

                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

               Section 8.1.  Amendment.  This Agreement may be amended from time
to time by the  Seller and the  Purchaser  by  written  agreement  signed by the
Seller and the Purchaser, with the consent of the Credit Enhancer (which consent
shall not be unreasonably withheld).

               Section 8.2.  GOVERNING LAW. THIS AGREEMENT  SHALL BE GOVERNED BY
AND  CONSTRUED  IN  ACCORDANCE  WITH THE  LAWS OF THE  STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

               Section 8.3.  Notices.  All demands,  notices and  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:

               (i)    if to the Seller:

                      Residential Funding Corporation
                      8400 Normandale Lake Boulevard
                      Suite 700
                      Minneapolis, Minnesota  55437
                      Attention:  Managing Director, Structured Finance

or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.

<PAGE>

                                            -14-

               (ii)   if to the Purchaser:

                      Residential Funding Mortgage Securities II, Inc.
                      8400 Normandale Lake Boulevard
                      Suite 700
                      Minneapolis, Minnesota 55437
                      Attention:  Managing Director, Structured Finance

               (iii)  if to the Custodian:

                      Wells Fargo Bank Minnesota, N.A.
                      1015 10th Avenue S.E.
                      Minneapolis, Minnesota  55414
                      Attention: MDC -- Account Manager

or such other  address as may hereafter be furnished to the Seller in writing by
the Purchaser.

               Section 8.4.  Severability  of Provisions.  If any one or more of
the covenants,  agreements,  provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants,  agreements,  provisions
or terms shall be deemed  severable  from the remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.

               Section 8.5.  Relationship of Parties.  Nothing herein  contained
shall be deemed or construed to create a partnership  or joint  venture  between
the  parties  hereto,  and the  services  of the Seller  shall be rendered as an
independent contractor and not as agent for the Purchaser.

               Section 8.6. Counterparts.  This Agreement may be executed in one
or  more   counterparts  and  by  the  different   parties  hereto  on  separate
counterparts, each of which, when so executed, shall be deemed to be an original
and such counterparts, together, shall constitute one and the same agreement.

               Section 8.7.  Further  Agreements.  The  Purchaser and the Seller
each  agree to execute  and  deliver  to the other  such  additional  documents,
instruments  or agreements as may be necessary or  appropriate to effectuate the
purposes of this Agreement.

               Section 8.8. Intention of the Parties. It is the intention of the
parties that the Purchaser is  purchasing,  and the Seller is selling,  the Home
Loans,  rather than a loan by the  Purchaser  to the Seller  secured by the Home
Loans. Accordingly,  the parties hereto each intend to treat the transaction for
federal  income tax  purposes  as a sale by the  Seller,  and a purchase  by the
Purchaser,  of the Home Loans.  The Purchaser  will have the right to review the
Home Loans and the Related  Documents to determine  the  characteristics  of the
Home Loans which will affect the federal

<PAGE>

                                            -15-

income tax  consequences  of owning the Home Loans and the Seller will cooperate
with all reasonable requests made by the Purchaser in the course of such review.

               Section  8.9.   Successors   and  Assigns;   Assignment  of  This
Agreement.  This  Agreement  shall  bind  and  inure  to the  benefit  of and be
enforceable  by the  Seller,  Purchaser  and  their  respective  successors  and
assigns.  The obligations of the Seller under this Agreement  cannot be assigned
or delegated to a third party without the consent of the Credit Enhancer and the
Purchaser,  which consent shall be at the Credit  Enhancer's and the Purchaser's
sole discretion,  except that the Purchaser and the Credit Enhancer  acknowledge
and agree that the Seller may assign its obligations  hereunder to any Affiliate
of the Seller,  to any Person  succeeding to the business of the Seller,  to any
Person  into which the Seller is merged  and to any  Person  resulting  from any
merger,  conversion or consolidation to which the Seller is a party. The parties
hereto  acknowledge  that the  Purchaser  is  acquiring  the Home  Loans for the
purpose of contributing  them to the Issuer.  Pursuant to the terms of the Trust
Agreement,  the Issuer  will issue and  transfer to or at the  direction  of the
Purchaser,  the  Certificates  and pursuant to the terms of the  Indenture,  the
Issuer will issue and  transfer to or at the  direction  of the  Purchaser,  the
Notes  secured by the Home Loans.  As an inducement to the Purchaser to purchase
the Home Loans,  the Seller  acknowledges  and consents to (i) the assignment by
the Purchaser to the Issuer of all of the Purchaser's  rights against the Seller
pursuant  to  this  Agreement  insofar  as such  rights  relate  to  Home  Loans
transferred  to the Issuer and to the  enforcement  or  exercise of any right or
remedy  against the Seller  pursuant to this  Agreement by the Issuer,  (ii) the
enforcement  or exercise of any right or remedy  against the Seller  pursuant to
this  Agreement by or on behalf of the Issuer and (iii) the  Issuer's  pledge of
its interest in this Agreement to the Indenture  Trustee and the  enforcement by
the Indenture  Trustee of any such right or remedy against the Seller  following
an Event of Default under the Indenture.  Such  enforcement of a right or remedy
by the Issuer or the Indenture Trustee, as applicable, shall have the same force
and  effect as if the right or remedy  had been  enforced  or  exercised  by the
Purchaser directly.

     Section 8.10.  Survival.  The representations and warranties made herein by
the Seller and the provisions of Article VI hereof shall survive the purchase of
the Home Loans hereunder.

<PAGE>

                                            -16-

               IN WITNESS  WHEREOF,  the Seller and the  Purchaser  have  caused
their  names  to be  signed  to this  Home  Loan  Purchase  Agreement  by  their
respective officers thereunto duly authorized as of the day and year first above
written.

                                            RESIDENTIAL FUNDING MORTGAGE
                                            SECURITIES II, INC.
                                                   as Purchaser

                                            By:    /s/ Lisa Lundsten
                                               --------------------------------
                                            Name:      Lisa Lundsten
                                            Title:        Managing Director

                                            RESIDENTIAL FUNDING CORPORATION
                                                   as Seller

                                            By:    /s/ Randy Van Zee
                                               --------------------------------
                                            Name:      Randy Van Zee
                                            Title:     Director

<PAGE>

                                            -1-

               IN WITNESS  WHEREOF,  the Seller and the  Purchaser  have  caused
their  names  to be  signed  to this  Home  Loan  Purchase  Agreement  by  their
respective officers thereunto duly authorized as of the day and year first above
written.

                                            RESIDENTIAL FUNDING MORTGAGE
                                            SECURITIES II, INC.
                                                   as Purchaser

                                            By:
                                               ---------------------------------
                                            Name:      Lisa Lundsten
                                            Title:       Vice President

                                            RESIDENTIAL FUNDING CORPORATION
                                                   as Seller

                                            By:
                                               ---------------------------------
                                            Name:      Randy Van Zee
                                            Title:     Director

<PAGE>

                                       -2-

                                    Exhibit 1

                               HOME LOAN SCHEDULE

                           TO BE PROVIDED UPON REQUEST

<PAGE><PAGE>

                                                                    EXHIBIT 10.5

                            FORM OF AFFILIATE LETTER

                            __________________, 2000

S-E Educational Holding Corp.
___________________
___________________
___________________

Ladies and Gentlemen:

     Pursuant to the terms of a Contribution Agreement and Plan of
Reorganization and Merger (the "Merger Agreement"), dated as of November 14,
2000 by and among S-E Educational Holding Corp., a newly-formed Delaware
corporation ("The Company"), Earlychildhood.com, LLC, a California limited
liability company ("Earlychildhood.com"), SmarterKids.com, Inc., a Delaware
corporation ("SmarterKids.com"), and S-E Educational Merger Corp., a newly-
formed Delaware corporation and a wholly-owned subsidiary of the Company
("Merger Sub"), the combination of Earlychildhood.com and SmarterKids.com shall
be effected through (i) the contribution to The Company by the holders of LLC
Interests of all of the right, title and interest in and to their entire
ownership interest in Earlychildhood.com (the "Contribution") and (ii) the
merger of Merger Sub with and into SmarterKids.com such that SmarterKids.com
becomes a wholly-owned subsidiary of The Company (the "Merger" and, collectively
with the Contribution, the "Transactions"). Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Merger
Agreement.

     As a result of the Transactions, I shall receive common stock, par value
$.01 per share, of the Company (the "Company Common Stock") in exchange for my
[SmarterKids.com Common Stock/LLC Interest].

     I have been advised that as of the date of this letter I may be deemed to
be (but do not hereby admit to be) an "affiliate" of
[Earlychildhood.com/SmarterKids.com], as the term "affiliate" is defined for
purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act").

          1.  I represent, warrant and covenant to the Company that in the event
I receive any Company Common Stock as a result of the Transactions:

          A.  I shall not make any sale, transfer or other disposition of the
Company Common Stock in violation of the Act or the Rules and Regulations.

          B.  I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable limitations
upon my ability to sell, transfer or otherwise dispose of the Company Common
Stock to the extent I felt necessary, with my counsel or counsel of
[SmarterKids.com/Earlychildhood.com].

                                       1

<PAGE>

          C.  I have been advised that the issuance of the Company Common Stock
to me as a result of the Transactions has been registered with the Commission
under the Act on a Registration Statement on Form S-4.  However, I have also
been advised that, since at the time the [Merger/Contribution] was submitted
[for a vote of the stockholders of SmarterKids.com] /[for a vote of the holders
of equity interests in Earlychildhood.com], I may be deemed to have been an
affiliate of [SmarterKids.com/Earlychildhood.com] and any subsequent
distribution by me of the Company Common Stock issued to me in the Transactions
has not been registered under the Act, I may not sell, transfer or otherwise
dispose of the Company Common Stock issued to me in the Transactions unless (i)
such sale, transfer or other disposition has been registered under the Act, (ii)
such sale, transfer or other disposition is made in conformity with Rule 145
promulgated by the Commission under the Act or (iii) in the opinion of counsel
reasonably acceptable to the Company or a "no action" letter obtained by the
undersigned from the staff of the Commission, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.

          D.  I understand that, except as may be set forth in that certain
Registration Rights Agreement, dated as of November __, 2000, by and among the
Company and certain stockholders of the Company listed on Schedule A thereto,
the Company is under no obligation to register the sale, transfer or other
disposition of the Company Common Stock by me or on my behalf under the Act or
to take any other action necessary in order to make compliance with an exemption
from such registration available.

          E.  I also understand that the Company may give stop transfer
instructions to its transfer agent with respect to the Company Common Stock to
enforce the restrictions on the undersigned set forth herein and that it
reserves the right to place on the certificates for the Company Common Stock
issued to the undersigned, or any substitutions therefor, a legend stating in
substance:

          "The securities represented by this certificate have been issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933
applies and may be sold or otherwise transferred in compliance with the
requirements of Rule 145 or pursuant to a registration statement under said Act
or an exemption from such registration."

          F.  I also understand that unless the transfer, by the undersigned, of
the Company Common Stock of the undersigned has been registered under the Act or
is a sale made in conformity with the provisions of Rule 145, the Company
reserves the right to put the following legend on the certificates issued to
transferees of the undersigned:

          "The securities represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired from a person who
received such shares in a transaction to which Rule 145, promulgated under the
Securities Act of 1933, applies.  The securities have been acquired by the
holder not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act of 1933 and may not be sold,
pledged or otherwise transferred except in accordance with an exemption from the
registration requirements of the Securities Act of 1933."

                                       2

<PAGE>

     Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of [SmarterKids.com/Earlychildhood.com] as described
above or as a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter.

          2.  By the Company's acceptance of this letter, the Company hereby
agrees with the undersigned to the extent applicable as follows:

          A.  For so long as and to the extent necessary to permit the
undersigned to sell the Company Common Stock pursuant to Rule 145 and, to the
extent applicable, Rule 144 under the Act, the Company shall (a) use its
reasonable efforts to (i) file, on a timely basis, all reports and data required
to be filed with the Commission by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and (ii) furnish to the
undersigned upon request a written statement as to whether the Company complied
with such reporting requirements during the 12 months preceding any proposed
sale of the Company Common Stock by the undersigned under Rule 145, and (b)
otherwise use its reasonable efforts to permit such sales pursuant to Rule 145
and Rule 144.  the Company has filed all reports required to be filed with the
Commission under Section 13 of the Exchange Act during the preceding 12 months.

          B.  It is understood and agreed that certificates with the legend set
forth in paragraphs E and F of Section 1 above will be substituted by delivery
of certificates without such legend if (i) transfer by the undersigned of the
Company Common Stock of the undersigned has been registered under the Act or is
a sale made in conformity with the provisions of Rule 145, (ii) one year shall
have elapsed from the date the undersigned acquired the Company Common Stock,
received in the Transactions and the provisions of Rule 145(d)(2) are then
available to the undersigned, (iii) two years shall have elapsed from the date
the undersigned acquired the Company Common Stock received in the Transactions
and the provisions of Rule 145(d)(3) are then applicable to the undersigned, or
(iv) the Company has received either an opinion of counsel, which opinion and
counsel shall be reasonably satisfactory to it, or a "no-action" or interpretive
letter obtained by the undersigned from the staff of the Commission, to the
effect that the restrictions imposed by Rule 144 and Rule 145 under the Act no
longer apply to the undersigned.

                                    Very truly yours,

                                    _________________________________
                                    Name:

                                       3

<PAGE>

Accepted this ________ day of

____________________, 2000 by

S-E EDUCATIONAL HOLDINGS CORP.

By:
   ______________________________________
Name:
Title:

                                       4

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