Document:

SPECIMEN PREFERRED STOCK CERTIFICATE

                                    New York

(Certificate No)                                            (Certificate Amount)

                                        THE   SECURITIES   REPRESENTED  BY  THIS
                                        CERTIFICATE  HAVE  NOT  BEEN  REGISTERED
                                        UNDER  THE  SECURITIES  ACT OF 1933,  AS
                                        AMENDED (THE "SECURITIES  ACT"), AND ARE
                                        "RESTRICTED   SECURITIES"   WITHIN   THE
                                        MEANING  OF RULE 144  PROMULGATED  UNDER
                                        THE SECURITIES  ACT. THE SECURITIES HAVE
                                        BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
                                        BE SOLD OR TRANSFERRED WITHOUT COMPLYING
                                        WITH  RULE  144  IN  THE  ABSENCE  OF AN
                                        EFFECTIVE    REGISTRATION    OR    OTHER
                                        COMPLIANCE UNDER THE SECURITIES ACT.

                       Community Home Mortgage Corporation

                 1,000,000 SHARES OF PREFERRED STOCK AUTHORIZED
                                $0.01 PAR VALUE

                               (Shareholder Name)

(Share Amount)

              Community Home Mortgage Corporation - PREFERRED STOCK

Transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrener of the Certificate properly
endorsed.

 COMMUNITY
   HOME
 MORTGAGE
CORPORATION
 PREFERRED
  STOCK

In Witness Whereof the duly authorizd officers of this Corporation has hereunto
subscribed their names and caused the corporate Seal to be hereto afficed at
___________________this (DATE OF ISSUE)

IRA SILVERMAN, PRESIDENT                             DANIEL SILVERMAN, SECRETARYMORTGAGE LOAN WAREHOUSE AND SECURITY AGREEMENT

                                   SUMMIT BANK

                                     - TO -

                       COMMUNITY HOME MORTGAGE CORPORATION

                            Dated: November 15, 1999

<PAGE>

                 MORTGAGE LOAN WAREHOUSE AND SECURITY AGREEMENT

         THIS MORTGAGE LOAN WAREHOUSE AND SECURITY  AGREEMENT is entered into as
of this 15 day of November, 1999, between COMMUNITY HOME MORTGAGE CORPORATION, a
New York corporation, and SUMMIT BANK, a New Jersey banking association.

                                    SECTION 1
                                   DEFINITIONS

         1.1 The following  terms as used in this  Mortgage  Loan  Warehouse and
Security Agreement shall have the meanings hereinafter provided:

                  (a)   "Adjusted   Tangible  Net  Worth:"  At  anytime  of  the
determination thereof, the sum of:

                           (i)  Tangible  Net  Worth  plus  subordinated   notes
payable to stockholders; plus

                           (ii) one (1%)  percent of the  aggregate  outstanding
principal balance of the Borrower's FNMA, FHLMC and GNMA mortgage loan servicing
portfolio and one-half of one percent (.50%) of the Borrower's  private investor
mortgage loan servicing portfolio (internally generated or acquired by purchase)
less the sum of;

                           (iii) any  amounts  included  in  Tangible  Net Worth
(however  designated on the financial  statements)  allocated to the purchase of
the Borrower's  servicing portfolio or any part thereof, or any amounts (however
designated on the financial  statements)  attributable to the  capitalization of
servicing fees in excess of the cost of servicing; and

                           (iv) any  amounts  related  to  non-mortgage  banking
items  included in  Tangible  Net Worth  (however  designated  on the  financial
statements) which the Lender may exclude in its sole discretion.

                  (b) "Affiliate:" Any -

                           (i)  entity  that   directly  or   indirectly   owns,
controls,  or holds  with  power  to  vote,  ten  (10%)  percent  or more of the
outstanding  voting securities of the Borrower,  other than an entity that holds
such securities -

                                    (1)  in  a  fiduciary  or  agency   capacity
without sole discretionary power to vote such securities; or

                                    (2) solely to secure a debt,  if such entity
has not in fact exercised such power to vote;

<PAGE>

                           (ii) corporation,  ten (10%) percent or more of whose
outstanding voting securities are directly or indirectly owned,  controlled,  or
held with power to vote,  by the  Borrower,  or by an entity  that  directly  or
indirectly  owns,  controls,  or holds with power to vote,  ten (10%) percent or
more of the outstanding voting securities of the Borrower,  other than an entity
that holds such securities -

                                    (1) in fiduciary or agency capacity  without
sole discretionary power to vote such securities; or

                                    (2) solely to secure a debt,  if such entity
has not in fact exercised such power to vote;

                           (iii) person whose business is operated under a lease
or operating agreement by the Borrower, or any person substantially all of whose
property is operated under an operating agreement with the Borrower; or

                           (iv)   entity   that   operates   the   business   or
substantially  all of the  property of the  Borrower  under a lease or operating
agreement.

                  (c)   "Agreement:"  The  contents  hereof  together  with  the
contents of any and all Exhibits  annexed  hereto and made a part hereof and all
other writings submitted by the Borrower to the Lender pursuant hereto.

                  (d)  "Available  Amount:" The maximum  amount  available to be
borrowed  by the  Borrower  from  time to time  under  the  Line  of  Credit  as
calculated pursuant to Subsection 2.1(a) hereof.

                  (e)  "Borrower:"  Community Home Mortgage  Corporation,  a New
York corporation.

                  (f) "Collateral:" All -

                           (i) Mortgage Loans, Mortgage Notes, Mortgages and all
other property rights,  guaranties,  proceeds and payments  relating to Mortgage
Loans,  which have been  pledged or assigned  to Lender  (whether by delivery to
Lender or to a third party on Lender's behalf or otherwise);

                           (ii)  with  respect  to  the   foregoing,   accounts,
accounts receivable,  payments and prepayments of principal, interest, and other
income due or to become due  thereon  and all  proceeds  therefrom,  and all the
right,  title and interest of every nature  whatsoever of Borrower in and to the
same  and  every  part of  such  property  including,  without  limitation,  the
following:

                                    (1) all rights, liens and security interests
existing with respect thereto or as security therefor;

                                      -2-
<PAGE>

                                    (2) all  hazard  insurance  policies,  title
insurance   policies   (issued  by   governmental   agencies  or  otherwise)  or
condemnation proceeds with respect thereto;

                                    (3) all prepayment premiums and late payment
charges with respect thereto;

                           (iii) real estate given as collateral to Borrower for
a Mortgage  Loan and acquired by Borrower by deed in lieu of  foreclosure  or by
foreclosure in connection with the enforcement of any security  interest granted
to Borrower attributable to any such Mortgage Loan;

                           (iv)   commitments   of  Investors,   mortgage-backed
securities,  and/or pool  participation  certificates and the proceeds resulting
from sales of same by Borrower;

                           (v) right,  title and  interest of Borrower in and to
all files, business records, surveys, certificates,  correspondence, appraisals,
environmental  reports,  computer  programs,  computer  tapes,  computer  discs,
accounting  records,  and  other  records,  information,  and  related  data  of
Borrower,  including,  but not limited to, those of the  foregoing  necessary to
identify and locate the Collateral;

                           (vi) all right,  title and  interest  of  Borrower in
fixtures and other personal  property in conjunction  with loans made to Persons
by Borrower and assigned to Lender; and

                           (vii) as to all of the  foregoing  (i)  through  (vi)
inclusive, cash proceeds,  non-cash proceeds and products thereof, additions and
accessions  thereto,  replacements and substitutions  therefor,  and all related
books, records, journals, computer print-outs and data, of the Borrower.

                  (g)  "Controlled  Group:"  As  such  term  is  defined  in the
Internal Revenue Code of 1986, as amended.

                  (h) "Document  List:" The Document List in the form of Exhibit
B annexed hereto and made a part hereof.

                  (i) "Eligible Mortgage Loan:" Only those Mortgage Loans of the
Borrower  that are and continue to be  acceptable to the Lender in all respects.
Standards  of  eligibility  may be fixed and  revised by the Lender from time to
time in the Lender's reasonable discretion. The Lender shall also have the right
to  establish  appropriate  reserves  from  time to time  in the  Lender's  sole
discretion.  In  general,  the  Lender  will not deem  any  Mortgage  Loan to be
eligible unless all of the following requirements are met:

                           (i) The  Mortgage  Loan is less than thirty (30) days
past due according to its terms;

                                      -3-
<PAGE>

                           (ii) If required by the Lender, the Mortgage Loan has
been  specifically  assigned  to the Lender on a properly  executed  and validly
recorded Form Assignment of Mortgage;

                           (iii) The  Mortgage  Loan is  secured  by a  properly
perfected first mortgage lien upon a fee simple interest in residential property
(1 to 4 family) and all improvements located thereon;

                           (iv) The  Mortgage  Loan is  evidenced  by a Mortgage
Note, in form and substance acceptable to the Lender;

                           (v) The  Mortgage  Loan is less  than  Three  Hundred
Fifty Thousand ($350,000.00) Dollars, unless specifically approved by Lender;

                           (vi) The title of the Borrower to the  Mortgage  Loan
is  absolute,  the Mortgage  Loan is not subject to any prior liens,  except for
that of the  Lender,  and the  Mortgage  Loan does not  arise out of a  contract
which,  by its terms,  forbids or makes void or  unenforceable  the liens of the
Borrower;

                           (vii) The Borrower  has not received any note,  trade
acceptance,  draft,  chattel  paper or other  instrument  with  respect to or in
payment for the Mortgage Loan;

                           (viii) The  Mortgage  Loan is not  subject to any set
off, recoupment,  counterclaim,  defense,  deduction,  charge back, allowance or
adjustment,  or to dispute,  objection or complaint by the maker of the Mortgage
Note  evidencing  the Mortgage Loan and concerning its liability on the Mortgage
Loan,  and the contract  giving rise to the Mortgage Loan has not been rescinded
or  rejected,  and the  amount  shown  on the  Borrower's  books is owing to the
Borrower;

                           (ix) The Mortgage  Loan arose in the ordinary  course
of  business  of  the  Borrower  and  no  notice  of  bankruptcy,  receivership,
insolvency,  dissolution,  termination of existence,  credit impairment,  or the
like of the maker of the Mortgage  Note  evidencing  the Mortgage  Loan,  and no
notice of death of the maker of the Mortgage Note  evidencing  the Mortgage Loan
or any partner or co-owner  thereof,  has been  received by the  Borrower or the
Lender;

                           (x) The maker of the  Mortgage  Note  evidencing  the
Mortgage  Loan  is  not  a  person,  firm,  or  corporation  which  directly  or
indirectly,  through one or more intermediaries,  controls, or is controlled by,
or is under common control with, the Borrower,  including,  without  limitation,
any  Subsidiary  or  Affiliate  as to the  Borrower  and the  Borrower as to any
Subsidiary or any Affiliate;

                           (xi)  The  Mortgage  Loan  does  not  consist  of any
accrued or unpaid  interest,  fees or service charges and shall consist strictly
of the principal  amount owed on such Mortgage

                                      -4-
<PAGE>

Loan, as such principal  amount is reflected on the financial  statements of the
Borrower  submitted to the Lender pursuant to Subsection 6.13 hereof;  provided,
however,  that the Mortgage Loan may consist of accrued or unpaid  interest only
if the purpose of said Mortgage  Loan is to  rehabilitate  and/or  refurbish the
real property which secures said Mortgage Loan;

                           (xii) The Mortgage  Loan is not subject to any contra
offsets by the Borrower;

                           (xiii) The Lender has not notified the Borrower  that
the Mortgage Loan or the maker on the Mortgage Note evidencing the Mortgage Loan
is  unsatisfactory  in  the  sole  discretion  of the  Lender  due  to  lack  of
creditworthiness;

                           (xiv)  The  Borrower  is not  aware  of any  terms or
conditions that would make the Mortgage Loan unsalable to an Investor;

                           (xv) The Mortgage  Loan has not been  included  under
the Line of Credit for a period of time in excess of the Warehouse Period;

                           (xvi) The  Mortgage  Loan is  subject  to a  Take-Out
Commitment  which  is in  full  force  and  effect  and  is in  full  compliance
therewith;

                           (xvii) The property  securing  the  Mortgage  Loan is
located in an Acceptable Jurisdiction; and

                           (xviii)  The  Mortgage  Loan is subject to such other
normal and reasonable limitations as the Lender may establish from time to time,
including, without limitation, the applicable requirements set forth by FNMA and
FHLMC.

                  (j) "ERISA:" The Employee  Retirement  Income  Security Act of
1974.

                  (k) "Event of Default:" Anyone of the occurrences described in
Section 7.

                  (1) "FHLMC:" The Federal Home Loan Mortgage Corporation or its
successor.

                  (m) "FNMA:" The Federal National  Mortgage  Association or its
successor.

                  (n) "Floating Base Rate:" The rate of interest  established by
the Lender from time to time as a means of pricing some loans to its  customers.
The  Floating  Base Rate is neither  tied to any  external  rate of  interest or
index,  nor does it  necessarily  reflect the lowest  rate of interest  actually
charged by the Lender to any particular class or category of customers.

                                      -5-
<PAGE>

                  (o) "GAAP:" Generally accepted accounting principles in effect
from time to time in the  United  States of  America,  applied  on a  consistent
basis.

                  (p) "GNMA:" The Government  National  Mortgage  Association or
its successor.

                  (q)  "Guarantor:"  Ira  Silverman,   designated  to  sign  the
Guaranty Agreements.

                  (r) "Guaranty  Agreements:" The Individual Guaranty Agreements
in form and substance acceptable to the Lender.

                  (s)  "Hazardous   Substances:"   Any  substances   defined  or
designated as hazardous or toxic wastes, hazardous or toxic materials, hazardous
or toxic  substances,  or similar terms, by any environmental  statute,  rule or
regulation of any governmental  entity presently in effect and applicable to the
Properties.

                  (t)  "Intangible  Assets:"  The  amount  of all  assets of the
Borrower reflected as goodwill,  patents,  deferred financing fees, research and
development and all other assets required to be classified as intangible  assets
in accordance with GAAP.

                  (u) "Home  Improvement  Loans:" Second Mortgage Loans approved
by Lender in its sole  discretion  which shall not in the  aggregate at any time
exceed $3,000,000.00. It is agreed and understood that the Lender shall evaluate
each  request for an advance  under this  Subsection  (u) as it shall  determine
giving  consideration  to the  nature  of each  Home  Improvement  Loan  and the
circumstances existing at the time of each request.

                  (v)  "Investor:"  A bank,  trust  company,  savings  and  loan
association,   pension  fund,   governmental   authority,   insurance   company,
institutional  investor,  investment  brokerage firm,  mortgage banker, or other
entity, acceptable to the Lender, in its sole discretion.

                  (w) "Lender:"  Summit Bank, a New Jersey banking  association,
its successors and assigns.

                  (x)  "Lender's  Rights  and  Remedies:"  All of the rights and
remedies of the Lender described in Section 8.

                  (y)   "Liens:"   All   mortgages,   liens,   judicial   liens,
encumbrances, security interests, charges, pledges, hypothecations, assignments,
conditional sale or other title retention agreements,  and the like, relating to
any  real or  personal  property  interest  of the  Borrower  whether  legal  or
equitable.

                  (z)  "Line  of  Credit:"  The  line  of  credit  described  in
Subsection 2.1(a).

                                      -6-
<PAGE>

                  (aa)  "Loans:"  Collectively  and  individually,  all Mortgage
Loans.

                  (bb)  "Loan  Advance   Request:"  The  loan  advance   request
certificate in the form of Exhibit A annexed hereto and made a part hereof.

                  (cc) "Maturity Date:" November 30, 2000.

                  (dd)  "Maximum  Line  of  Credit   Amount:"   Fifteen  Million
($15,000,000.00)  Dollars  less  the  aggregate  outstanding  advances  on  Home
Improvement Loans and Personal Property Loans.

                  (ee)  "Mortgage:"  A  mortgage  or a deed  of  trust  on  real
property securing a Mortgage Loan and also creating a properly perfected,  valid
first lien on the fee simple title to real  property  referred  therein  subject
only to (i) liens for taxes,  not yet due and  payable  or similar  governmental
charges not yet due and payable or still subject to payment without  interest or
penalty,  (ii) zoning  restrictions  of record,  which shall neither  defeat nor
render  invalid such lien or the priority  thereof,  nor  materially  impair the
marketability  or value of such real  estate,  nor be violated  by the  existing
improvements or the intended use thereof; and (iii) such other liens as may have
been approved in writing by Lender.

                  (ff) "Mortgage  Loan:" A loan evidenced by a Mortgage Note and
secured by a Mortgage  covering a fee simple  interest in  residential  property
(1-4 family) and all improvements and fixtures located thereon.

                  (gg)   "Mortgage   Note:"  A  valid  and  binding   negotiable
instrument,  whether  in  the  form  of  a  note,  bond  or  other  evidence  of
indebtedness,  payable to the order of the Borrower,  evidencing a Mortgage Loan
and secured by a Mortgage, for which:

                           (i) The title of the  Borrower,  to the Mortgage Note
is  absolute,  the Mortgage  Note is not subject to any prior liens,  except for
that of the  Lender,  and the  Mortgage  Note does not  arise out of a  contract
which,  by its terms,  forbids or makes  void or  unenforceable  the lien of the
Borrower;

                           (ii) The Borrower  has not  received any note,  trade
acceptance,  draft,  chattel  paper or other  instrument  with  respect to or in
payment for the Mortgage Note;

                           (iii) The  Mortgage  Note is not  subject  to any set
off, recoupment,  counterclaim, defense, allowance or adjustment, or to dispute,
objection  or complaint by the maker of the  Mortgage  Note and  concerning  its
liability on the  Mortgage  Note,  and the contract  giving rise to the Mortgage
Note has not been rescinded or rejected,  and the amount shown on the Borrower's
books is owing to the Borrower,  and no partial payment has been made thereon by
anyone;

                                      -7-
<PAGE>

                           (iv) The  Mortgage  Note was  executed by a bona fide
third person who has capacity to contract;

                           (v) The Mortgage Note is payable in  accordance  with
terms and conditions acceptable to Lender; and

                           (vi) The Mortgage  Note complies with any other terms
as may be required by Lender from time to time.

                  (hh) "Obligations:" All loans, advances, indebtedness,  notes,
liabilities, and amounts, liquidated or unliquidated, each of every kind, nature
and description,  whether arising under this Agreement or otherwise,  including,
without  limitation,  principal and interest,  and whether secured or unsecured,
direct or indirect,  absolute or contingent,  due or to become due, now existing
or hereafter contracted.

                  (ii) "PBGC:" The Pension Benefit Guaranty Corporation.

                  (jj)  "Personal  Property  Loans:" A loan  secured by personal
property or fixtures as determined by the Lender in its sole  discretion,  which
shall not individually  exceed $20,000.00 per loan or, in the aggregate,  exceed
$500,000.00  at any time.  It is agreed and  understood  that the  Lender  shall
evaluate  each  request for an advance  under this  Subsection  (jj) as it shall
determine giving  consideration to the nature of each Personal Property Loan and
the  circumstances  existing  at the time of each  request,  including,  without
limitation, evidence of a properly perfected security interest in the underlying
collateral securing such loan.

                  (kk)  "Plan:"  Any  plan   subject  to  the  minimum   funding
requirements of Section 412 of the Internal Revenue Code of 1986, as amended.

                  (ll) "Properties:" Collectively and individually,  any and all
properties  or lands now,  formerly  or in the future  owned or  occupied by the
Borrower.

                  (mm)  "Reportable  Event:"  As  such  term  is  defined  in 29
U.S.C.A.ss. 1343.

                  (nn)  "Revolving  Loan Master  Note:" The Amended and Restated
Revolving  Loan Master Note in form and  substance  acceptable to the Lender and
any promissory notes in renewal thereof or substitution or replacement therefor.

                  (oo) "Subprime Loans:" An Eligible Mortgage Loan consisting of
non-conforming  "A-" through "C-" quality  rated  loans,  as  determined  by the
Lender, in its sole discretion.

                  (pp)  "Subsidiary:"  Any corporation  more than a majority (by
number of votes) of the common stock of which is at the time owned or controlled
by the Borrower or a Subsidiary of the Borrower.

                                      -8-
<PAGE>

                  (qq) "Take-Out  Commitment:"  A bona fide current,  unused and
unexpired  commitment of an Investor under which such Investor agrees,  prior to
or on the expiration  thereof,  upon satisfaction of certain conditions therein,
to  acquire  the  Collateral,  which  commitment  is not  subject to any term or
condition  which is not customary in commitments of like nature or which, in the
reasonably  anticipated course of events, cannot be fully complied with prior to
the expiration thereof.

                  (rr) "Tangible Net Worth:" Capital stock, capital in excess of
par or stated value of shares of its capital stock,  retained earnings,  and any
other account which,  in accordance  with GAAP,  constitutes  (i) the sum of (A)
stockholders'  equity,  plus (B)  subordinated  debt;  less  (ii) the sum of (V)
treasury stock,  (W) any minority  interest in  Subsidiaries or Affiliates,  (X)
amounts due from Subsidiaries and Affiliates, and (y) Intangible Assets.

                  (ss) "Total Principal  Outstanding:" The aggregate outstanding
principal balance of all Loans, as of any date of determination. -

                  (tt)  "Warehouse  Period:"  The period  that is (i) sixty (60)
days from the date such Loan is made and (ii) ninety  (90) days with  respect to
Subprime Loans, Home Improvement Loans and Personal Property Loans.

         1.2  Any  accounting  terms  used  in  this  Agreement  which  are  not
specifically  defined  shall  have the  meanings  customarily  given  thereto in
accordance with GAAP.

         1.3  Any  environmental  terms  used in this  Agreement  which  are not
specifically  defined  shall have the meanings  ascribed to such terms under the
laws of the State of New Jersey, as amended from time to time and/or regulations
promulgated in relation thereto.

         1.4 Terms such as "accounts," "accounts receivable," "contract rights,"
"letters of credit," "advises,"  "confirmations," "farm products,"  "inventory,"
"equipment,"  "instruments,"  "chattel  paper,"  "documents of title,"  "goods,"
"general intangibles," "account debtors," "proceeds,"  "products," and the like,
shall,  unless  otherwise   specifically   defined  herein,  have  the  meanings
applicable to them for the purposes of Article 9 (Secured  Transactions)  of the
Uniform  Commercial  Code in force and  effect in the State of New Jersey at the
date of this Agreement.

                                    SECTION 2
                            AMOUNT AND TERMS OF LOAN

         2.1 Terms of Line of  Credit.  Subject to the terms and  conditions  of
this  Agreement,  and to the  Borrower's  observance  and  performance  of,  and
compliance  with,  all  terms,  conditions,

                                      -9-
<PAGE>

warranties,  representations  and  covenants of this  Agreement,  and the timely
payment of the Obligations of the Borrower to the Lender:

                  (a) Line of Credit.  The Lender  shall lend and re-lend to the
Borrower amounts which shall not exceed, in the aggregate of unpaid principal of
such amounts outstanding at anyone time, (1) up to ninety-eight (98%) percent of
the lesser of (i) the Take-Out  Commitment  for such Eligible  Mortgage Loan, or
(ii) the  unpaid  principal  amount of the  Mortgage  Note with  respect to such
Eligible Mortgage Loan and (2) with respect to uncommitted  Subprime Loans, Home
Improvement  Loans and Personal Loans,  up to ninety-sixty  (96%) percent of the
unpaid  principal amount of the Note with respect to such loan. At no time shall
the aggregate  amount  outstanding  hereunder  exceed the Maximum Line of Credit
Amount.

                  (b) Procedure for  Advances.  The Borrower  shall "comply with
all of the requirements of Subsection 4.2 hereof for any Eligible  Mortgage Loan
for which the Borrower  will request  advances from the Lender under the Line of
Credit.  The Lender shall  review each  request for an advance  submitted by the
Borrower,  together with the documentation  obtained from the Borrower,  and the
Lender,  in its sole  discretion,  shall  determine  whether or not to grant the
requested  advance.  Amounts loaned or re-loaned to the Borrower pursuant to the
Line of Credit  shall be  delivered  to the  Borrower  by credit to any  general
deposit  account  maintained  by the  Borrower  with the Lender or by such other
method as agreed to by the Lender and the Borrower.

                  (c) Interest.  The outstanding principal amount of the Line of
Credit shall bear interest at a rate of interest per annum equal to the Floating
Base Rate minus three quarters of one (.75) percent and with respect to all Line
of Credit advances on uncommitted Subprime Loans and Home Improvement Loans, the
Floating Base Rate minus one-quarter of one (.25%) percent,  and with respect to
Personal  Property  Loans,  the Floating Base Rate,  computed  daily,  with each
change in the Lender's Floating Base Rate, for the actual number of days elapsed
as if each full calendar year  consisted of three hundred sixty (360) days.  The
Borrower shall make monthly  payments of interest on the outstanding  balance of
the Line of Credit on the first day of each month,  commencing  on the first day
of the month following the initial advance under the Line of Credit.

                  To the extent permitted by law,  whenever there is an Event of
Default  hereunder,  or  non-payment  upon  demand,  the rate of interest on the
unpaid principal balance of the Loan shall, at the option of the Lender, be four
(4%) percent over the prevailing Floating Base Rate. Borrower acknowledges that:
(i) such additional rate is a material inducement to the Lender to make the Line
of  Credit  available;  (ii) the  Lender  would not have made the Line of Credit
available  in the absence of the  agreement  of the Borrower to pay such default
rate;  (iii) such additional rate represents  compensation for increased risk to
the

                                      -10-
<PAGE>

Lender that the Line of Credit  will not be repaid;  and (iv) such rate is not a
penalty and  represents a  reasonable  estimate of (a) the cost to the Lender in
allocating its resources  (both  personal and financial) to the ongoing  review,
monitoring,  administration  and  collection  of the  Line  of  Credit,  and (b)
compensation to the Lender for losses that are difficult to ascertain.

                  (d)  Principal  Payments;  Delivery of  Collateral  by Lender;
Final Maturity.

                           (i) The Borrower shall repay advances  granted by the
Lender under the Line of Credit in connection with an Eligible Mortgage Loan, in
immediately  available funds,  upon the earlier of (1) demand made in accordance
with Subsection 8.1(a), (2) the repayment of the Mortgage Loan by the Borrower's
borrower,  (3)  the  date of the  sale of any  Mortgage  Loan,  (4) the  subject
Mortgage Loan ceases to be an Eligible  Mortgage  Loan,  (5) the occurrence of a
default or an event of default  under the terms and  conditions  of the Mortgage
Loan by the borrower,  (6) the  expiration of the Warehouse  Period,  or (7) the
Maturity Date. The Borrower shall not commingle any cash proceeds  received upon
the  repayment of the Mortgage  Loan by the  Borrower's  borrower with any other
funds or property of the Borrower,  but shall hold those cash proceeds  separate
and apart therefrom and upon an express trust for the Lender.

                           (ii)  Provided an Event of Default  has not  occurred
hereunder,  the Lender  shall,  upon the sale of any Mortgage  Loan  assigned to
Lender hereunder and receipt of the proceeds of such sale,  deliver the Mortgage
Note, an assignment of the Mortgage  securing the Mortgage  Note,  and all other
related  documentation  submitted to the Lender by the Borrower, as requested by
Borrower in writing, to the Investor.

                           (iii) The Lender's agreement to grant advances to the
Borrower  under  this  Agreement  shall  terminate  upon the  earlier of (1) the
occurrence of an Event of Default, (2) demand made in accordance with Subsection
8.1(a), or (3) the Maturity Date.

                           (iv)  The  Borrower  hereby  agrees  that any and all
amounts due and payable under this  Subsection  (d) may be charged by the Lender
to any checking or loan account maintained by Borrower with the Lender.

                  (e) Line Usage  Fee.  The  Borrower  shall pay to the Lender a
line usage fee of: .25% per annum of the monthly  average  unused portion of the
Maximum Line of Credit if the average monthly  outstanding  loan balance is less
than twenty (20%) percent of the Maximum Line of Credit Amount,  payable monthly
in arrears.

                  (f) Loan Package Fee and Costs.  The Borrower shall pay to the
Lender a loan package fee in an amount equal to

                                      -11-
<PAGE>

Twenty-Five  ($25.00) Dollars per warehoused Loan. The loan package fee shall be
due and payable by the Borrower with each payment of interest made in accordance
with Subsection 2.1(c)

                  (g)  Field  Examination  Fee.  The  Borrower  shall pay to the
Lender a field  examination fee not to exceed One Thousand  ($1,000.00)  Dollars
per annum.  The field  examination fees shall be due and payable by the Borrower
with each payment of interest made in accordance with Subsection 2.1(c). So long
as no Event of Default has occurred,  the field  examination fees payable by the
Borrower  shall be, in the aggregate,  no greater than One Thousand  ($1,000.00)
Dollars  per  calendar  year,  beginning  with the  calendar  year in which this
Agreement is executed.

                  (h) Statement of Account.  At least once each month the Lender
shall  render and send to the Borrower a statement  of account  showing  amounts
loaned,  all other  charges,  expenses  and  items  chargeable  to the  Borrower
pursuant  to  Subsection  6.14,  payments  made  by  the  Borrower  against  the
Obligations arising pursuant to the Line of Credit, other appropriate debits and
credits and the total of the Obligations of the Borrower to the Lender as of the
date  of the  statement  for  loans  pursuant  to the  Line of  Credit,  and the
statement  of  account  shall be  conclusively  presumed  to be  correct  in all
respects,  except for specific  objections  which the Borrower  makes in writing
within  thirty  (30) days from the date upon which the  statement  of account is
sent.  Credit for deposits  made to the  Borrower's  account shall be given on a
daily  business  day basis  upon  deposit  and shall be  conditional  upon final
payment of the deposited item.

                  (i) Revolving Loan Master Note. The maximum amount of the Line
of Credit shall be evidenced by the Revolving  Loan Master Note, and the balance
due from time to time on the  Revolving  Loan Master Note shall be  conclusively
evidenced by the Lender's  records of disbursements  and repayments,  subject to
Subsection 2.1(h).

                                    SECTION 3
                                SECURITY INTEREST

         3.1 In consideration of the Lender's  granting to the Borrower the Line
of Credit in accordance  with the terms and  conditions of this  Agreement,  the
Borrower,  to secure payment and  performance  of all of the  Obligations of the
Borrower to the Lender,  hereby grants to the Lender a security  interest in the
Collateral,  which security interest shall remain in full force and effect until
all of the  Obligations  of the  Borrower  to the  Lender  are  fully  paid  and
satisfied.

                                    SECTION 4
                              CONDITIONS PRECEDENT

         4.1 The Lender's  agreement to lend or re-lend  amounts to the Borrower
pursuant to the Line of Credit is conditioned  upon,

                                      -12-
<PAGE>

where  applicable,  proper  execution  by the  appropriate  party  and  prior or
simultaneous   delivery  by  the  Borrower  to  the  Lender,  and  the  Lender's
satisfactory review, of the documents set forth on the Document List.

         4.2 For Any  Advance.  (a) The  Lender's  agreement  to lend or re-lend
amounts  to the  Borrower  pursuant  to the Line of Credit,  including,  without
limitation,  the Lender's agreement to grant the initial advance  hereunder,  is
conditioned upon delivery by the Borrower to the Lender of:

                           (i) all  documentation  required by Subsection  6.29;
and

                           (ii) a properly  executed Loan Advance Request on the
date of the requested  advance,  evidencing an Available  Amount greater than or
equal to the advance requested.

                                    SECTION 5
                   REPRESENTATIONS AND WARRANTIES BY BORROWER

         As a material  inducement to the Lender to lend and re-lend  amounts to
the Borrower  pursuant to the Line of Credit,  and to enter into this Agreement,
the Borrower represents and warrants to the Lender that:

         5.1 Incorporation, Good Standing and Due Qualification. The Borrower is
a corporation duly organized,  validly existing,  and in good standing under the
laws of the State of New York, is  authorized to transact  business in the State
of New York, maintains its principal place of business in the State of New York,
and there are no other  jurisdictions  in which the character of the  properties
owned or the  business  transacted  by the  Borrower  makes  qualification  as a
foreign corporation necessary.

         5.2 Corporate Power and Authority. The Borrower has the corporate power
to execute,  deliver, and perform this Agreement and to borrow hereunder and has
taken all necessary corporate action to authorize (a) the borrowing hereunder on
the terms and conditions of this Agreement, and (b) the execution,  delivery and
performance of this Agreement.

         5.3 Operation of Business.  The Borrower  possesses,  in full force and
effect, all franchises,  patents, licenses, trademarks,  trademark rights, trade
names,  trade name rights,  fictitious name  authorizations  or certificates and
copyrights  to  conduct  its  business  as  now  conducted,  including,  without
limitation,  all necessary mortgage broker and/or bankers licenses,  without any
conflict with the franchises,  patents, licenses, trademarks,  trademark rights,
trade names, trade name rights,  fictitious name  authorizations or certificates
and copyrights of others.

         5.4 Nature of  Business.  The  Borrower  is engaged in the  business of
making mortgage loans and business relating directly thereto.

                                      -13-
<PAGE>

         5.5      Financial Condition; Solvency.

                  (a) The  Borrower  has  furnished  to the Lender its  reviewed
financial  statements  for the year  ended  December  31,  1998  and  management
prepared  interim  statements for the period ended June 30, 1999. Such financial
statements  constitute the representation by management of the Borrower that the
information  contained in the statements is complete and correct in all material
respects.  Since the date of the balance sheet referred to above, there has been
no material and adverse  change in the  financial  condition of the Borrower not
reflected in the financial  statements as of that date,  and since such date the
business of the Borrower has not been  materially and adversely  affected by any
occurrence, whether or not insured against.

                  (b) The Borrower's  assets,  at a fair  valuation,  exceed the
Borrower's liabilities (including, without limitation,  contingent liabilities),
the  Borrower  is paying its debts as they  become  due,  and the  Borrower  has
capital and assets sufficient to carry on its business.

         5.6 Taxes. All tax returns of the Borrower which are due have been duly
filed and are  correct  and all taxes and other  governmental  charges  upon the
Borrower which are due have been paid.

         5.7   Litigation.   There  are  no  outstanding   judgments,   actions,
proceedings,  claims or investigations pending or threatened before any court or
governmental body which, if adversely  determined,  may materially and adversely
affect the business, operations or affairs of the Borrower.

         5.8 Ownership and Liens.  The Borrower has good and marketable title to
all of its properties and assets, including, without limitation, the Collateral,
subject to no Liens except for permitted exceptions described in Subsection 6.8.
The security  interest granted in Subsection 3.1 constitutes a valid Lien on the
Collateral,  subject to no equal or prior Liens except for permitted  exceptions
described in Subsection 6.8.

         5.9  Approvals.  No consent or  approval of any  person,  landlord,  or
mortgagee,  no waiver of any lien or right of distraint or other similar  right,
and  no  consent,  license,  approval,  or  authorization  of  or  registration,
qualification,  designation,  declaration  or filing  (except  any  recordations
required in connection with the perfection of the security  interest  granted in
Subsection 3.1) with any  governmental  authority on the part of the Borrower is
required in connection  with the execution,  delivery,  and  performance of this
Agreement or the consummation of any other transactions contemplated hereby.

         5.10  Other  Agreements  and  Restrictions.  There  is no  term  of any
contract,  bond, note, indenture,  or other agreement or of any

                                      -14-
<PAGE>

charter  or other  corporate  restriction  or of any  judgment,  decree,  order,
statute,  rule or regulation which materially and adversely limits the business,
operations,  or affairs, as presently conducted,  of the Borrower or its assets,
and the Borrower is not now in violation  of any such term;  and the  execution,
delivery and performance of, and compliance  with, this Agreement will not (with
or  without  the  giving  of  notice  of lapse of time,  or both)  result in any
violations of, or be in conflict  with, or constitute a default under,  any such
term,  or result in the  creation  of any  Liens  upon any of the  assets of the
Borrower,  except  for  the  Liens  created  pursuant  to  this  Agreement.  The
operations of the Borrower comply with all laws, statutes,  rules,  regulations,
ordinances, and the like, applicable to them.

         5.11 Name Change,  Mergers. Within the last six (6) years, the Borrower
has not  changed  its  name,  been the  surviving  corporation  of a  merger  or
consolidation,  or acquired all or substantially all of the assets of any person
or entity.

         5.12 Place of Business.  The only  principal  place of business,  other
places of business of the Borrower and  jurisdictions  of Borrower  approved for
funding by Lender are, as follows:

                  Principal Place of              510 Broad Hollow Road
                  Business of Borrower:           Melville, New York 11747
                  --------------------

                  Other Places of                 None
                  Business of Borrower:
                  --------------------

                  Acceptable Jurisdictions        New York
                  of Borrower:
                  -----------

         5.143  Location of  Collateral  and  Books  and  Records.  All  of  the
Collateral,  and the records of the Borrower relating to the Collateral, and the
other books,  records,  journals,  orders,  receipts,  and correspondence of the
Borrower,  are located at only the  principal  place of business of the Borrower
set forth in Subsection 5.12, except as to the corporate minute book and related
records which are maintained at the offices of counsel to the Borrower.

         5.14 Reportable  Events.  No Reportable Event has occurred with respect
to any Plan  maintained for employees of: (i) the Borrower;  (ii) any Subsidiary
of the Borrower; or (iii) any member of a Controlled Group of which the Borrower
is a part.

         5.15  Compliance  With Law. The Borrower is in compliance  with any and
all state and federal laws and regulations  applicable to it including,  without
limitation,  those established by the Bureau of Alcohol,  Tobacco and Fire Arms,
ERISA, the Environmental  Protection Agency, the Federal Occupational Safety and
Health Agency, and with Federal Reserve Board Regulations G, T, U and X.

                                      -15-
<PAGE>

         5.16  Full  Disclosure.  The  representations  and  warranties  of  the
Borrower set forth in this Agreement are true and correct in all respects.

         5.17 No Event of Default.  The Borrower has reviewed this Agreement and
represents  that no Event of Default  exists and the  Borrower is not in default
under any other documents,  instruments, writings or agreements to which it is a
party.

         5.18 Enforceability of Agreement. This Agreement has been duly executed
and delivered and constitutes  the valid and legally  binding  obligation of the
Borrower,  enforceable  in  accordance  with its terms,  subject  to  applicable
Federal and State bankruptcy and insolvency laws affecting  generally the rights
of creditors.

         5.19 Year 2000. The advent of the year 2000 shall not adversely  affect
the  Borrower's  operations or the  performance of its  information  technology.
Without limiting the generality of the foregoing,  (i) the hardware and software
utilized by Borrower are designed to be used prior to, during and after calendar
year 2000 A.D. and such hardware and software will operate during each such time
period  without error  relating to date data,  specifically  including any error
relating  to, or in the  conduct of, date data which  represents  or  references
different  centuries  or more than one  century,  (ii) the hardware and software
utilized by Borrower  will not  abnormally  end or provide  invalid or incorrect
results as a result of date data,  and (iii) the hardware and software  utilized
by Borrower have been designed to ensure year 2000 A.D. compatibility, including
date data, century recognition,  leap year,  calculations which accommodate same
century and  multi-currency  formulas and date values,  and date data  interface
values that reflect the century.

                                    SECTION 6
                              COVENANTS BY BORROWER

As a  material  inducement  to the  Lender to lend and  re-lend  amounts  to the
Borrower pursuant to the Line of Credit,  and to enter into this Agreement,  the
Borrower covenants and agrees with the Lender that:

         6.1 Maintain Corporate Existence.  The Borrower shall preserve and keep
in full force and effect its corporate existence and all franchises, rights, and
privileges necessary for the proper conduct of its business,  including, without
limitation, all necessary franchises,  patents, licenses, trademarks,  trademark
rights, trade name rights,  fictitious name authorizations,  or certificates and
copyrights  without  any  conflict  with  such  franchises,  patents,  licenses,
trademarks,  trademark rights, trade name rights, fictitious name authorizations
or certificates and copyrights of others.

         6.2  Delivery of  Corporate  Documents.  The  Borrower  shall  promptly
deliver  to  the  Lender  copies  of  any  amendments  or

                                      -16-
<PAGE>

modifications  to its certificate of incorporation  and by-laws,  certified with
respect to the  certificate  of  incorporation  by the Secretary of State of the
state of  incorporation,  and, with respect to the by-laws,  by the secretary of
the Borrower.

         6.3  Compliance  with Laws.  The  Borrower  shall comply with all laws,
ordinances,  rules and regulations, now or hereafter in effect, applicable to it
of any  federal,  state or local  government  or any  instrumentality  or agency
thereof.

         6.4 Payment of Taxes.  The Borrower  shall pay and  discharge,  as they
become due, all taxes,  assessments,  debts,  claims and other  governmental  or
non-governmental  charges  lawfully  imposed  upon it or  incurred  by it or its
properties  and assets,  except taxes,  assessments,  debts,  claims and charges
contested in good faith in appropriate  proceedings,  and provide the Lender, if
requested, evidence of said taxes, assessments,  debts, claims, and charges, and
of payment thereof.

         6.5 Maintenance of Properties and Assets.  The Borrower shall maintain,
preserve and keep all its  properties  and assets in good repair,  working order
and  condition,  and make,  or cause to be made,  all  necessary or  appropriate
repairs, renewals,  replacements,  substitutions,  additions,  betterments,  and
improvements thereto, so that efficiency of all such properties and assets shall
at all times be properly preserved and maintained.

         6.6 Insurance.  The Borrower shall maintain,  with reputable  insurance
companies,  such  insurance on its  Properties  and assets,  including,  without
limitation,  the  Collateral,  against such casualties and in such amounts as is
customarily maintained by similar businesses.  All insurance policies shall name
the Lender as a loss payee,  mortgagee  and as an additional  insured.  All such
policies of insurance shall provide for at least ten (10) days advance notice in
writing  to the  Lender of any  cancellation  or  modification  thereof.  If the
Borrower fails to pay the premiums on any such insurance,  the Lender shall have
the right (but shall be under no duty) to pay such  premiums for the  Borrower's
account.  The Borrower shall repay to the Lender any sums which the Lender shall
have so  paid,  together  with  interest  thereon  at the  rate  payable  by the
Borrower,  at the time of payment by the Lender.  The Borrower  shall deliver to
the Lender,  upon its  request,  a detailed  list of  insurance  then in effect,
stating  the names of the  insurance  companies,  the  amounts  and rates of the
insurance,  dates of expiration  thereof,  and the  properties and risks covered
thereby; and within fifteen (15) days after notice from the Lender,  obtain such
additional insurance as the Lender may reasonably request.

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

                                      -17-
<PAGE>

         6.8  Permitted  Encumbrances.   The  Borrower  shall  not  directly  or
indirectly  permit to exist any Liens with respect to the Collateral  other than
the following:

                  (a)  Liens  for  taxes  not  yet  due,  or  unless  and  until
foreclosure  or other  similar  proceedings  shall  have been  commenced,  being
contested in good faith in appropriate proceedings; and

                  (b) Liens in favor of the  Lender  whether  such  Liens  arise
pursuant to this Agreement, or otherwise.

         6.9  Litigation.  The Borrower shall promptly  notify the Lender (a) of
any  litigation,  actions,  proceedings,  claims or  investigations  pending  or
threatened against the Borrower,  wherein claimant seeks to recover in excess of
Twenty Five  Thousand  ($25,000.00)  Dollars and of the entry of any judgment in
excess of Ten Thousand ($10,000.00) Dollars against the Borrower or the entry of
any Liens,  other than Liens  permitted by  Subsection  6.8,  against any of the
Collateral;  (b) upon the receipt of any  information,  notice or claim, or upon
learning of any  investigation,  as to any alleged  use,  storage,  treatment or
handling,  except as expressly  permitted in this  Agreement,  or any discharge,
spill,  emission  or  disposal  of,  any  Hazardous  Substances  by  or  on  the
Properties;  and (c) upon learning of any  circumstances  or  transactions  that
would require compliance with any federal, state or local environmental statutes
or regulations.

         6.10 Location of Books and Records. The Borrower shall keep its records
relating to the  Collateral,  and its other books,  records,  journals,  orders,
receipts and correspondence at only those locations of the Borrower set forth in
Subsection  5.13,  unless  notice is given to the Lender in advance  of, and the
Lender  consents  in  writing  to,  removal  of  the  records  relating  to  the
Collateral,  and the other  books,  records,  journals,  orders,  receipts,  and
correspondence, to another location.

         6.11 Nature of Business.  The Borrower shall not engage in any business
other than as a mortgage lender making loans secured by residential  real estate
and business relating directly thereto.

         6.12 Change of  Principal  Place of Business,  Etc. The Borrower  shall
promptly  notify the Lender of any change of location of its principal  place of
business  or other  places  of  business,  of the  addition  of any new place of
business or of the elimination of any existing place of business.

         6.13 Financial  Reporting  Requirements.  The Borrower shall deliver to
the Lender the following:

                  (a) Within  ninety (90) days after the end of each fiscal year
of the  Borrower  (commencing  with the fiscal year in which this  Agreement  is
executed  and  continuing  until all of the

                                      -18-
<PAGE>

Obligations  of the  Borrower  to the Lender are fully  paid and  satisfied),  a
balance  sheet of the  Borrower  as at the end of such  year and  statements  of
income,  cash flows and changes in  stockholders'  equity thereof for such year,
all in  reasonable  detail and prepared as an audited  statement by  independent
certified public accountants  acceptable to the Lender, which shall be certified
by the principal  financial officer of the Borrower to the Lender to be complete
and correct,  which  certificate  shall  include a statement of his  examination
(which shall include a review of the relevant  provisions of this Agreement) and
stating  whether his examination has disclosed the existence of any condition or
event  which  constitutes  (or would  after  notice  or lapse of time,  or both,
constitute) an Event of Default,  and if so, specifying the nature and period of
existence thereof;

                  (b)  Within  sixty  (60)  days  after  the end of each  fiscal
quarter (except for the fourth) a balance sheet of the Borrower as at the end of
such period,  and Borrower's  cumulative  income and surplus  statements for the
period  beginning  on the first day of such fiscal year and ended on the date of
such balance sheet, all in reasonable  detail and either  reviewed,  compiled or
internally   prepared,   certified  by  the  President  of  the  Borrower  which
certification  shall  state that such  statements  are true and correct and that
there  existed  no  Event  of  Default  as of the  date  thereof  and  shall  be
accompanied  by evidence of the  calculation  of  compliance  with the financial
covenants, and in addition to such statements,  any supplementary information to
the financial reports as Lender may reasonably require.

                  (c) Upon each request for an advance  under the Line of Credit
or more  frequent if requested by the Lender,  a Loan Advance  Request,  in such
form as the Lender shall reasonably require;

                  (d) Not later  than  ninety  (90)  days  after the end of each
calendar year, the personal  financial  statements of the Guarantors  containing
such information as the Lender shall reasonably  require,  and if requested,  on
forms submitted by the Lender and not later than ten (10) days after filing with
the Internal Revenue  Service,  a true and complete copy of their signed Federal
income tax returns;

                  (e) At  Lender's  request,  copies  of  Take-Out  Commitments,
credit  files or other  loan or  warehouse  credit  information  concerning  the
Mortgage Loans; and

                  (f) Such additional financial statements or information of the
Borrower as the Lender shall reasonably require.

         6.14 Fees and Expenses in Protecting Rights. If at any time or times or
from time to time the Lender employs counselor any

                                      -19-
<PAGE>

other professionals or consultants for advice or other representation:

                  (a) with respect to the  Collateral,  the  Obligations  of the
Borrower to the Lender, this Agreement, or any document,  instrument, writing or
Agreement related thereto;

                  (b)  to  represent  the  Lender  in any  litigation,  contest,
dispute,  suit or proceeding or to commence,  defend or intervene or to take any
other action in or with respect to any  litigation,  contest,  dispute,  suit or
proceeding (whether  instituted by the Lender,  Borrower or any other person) in
any way or respect  relating to the Collateral,  the Obligations of the Borrower
to the Lender, this Agreement or any document,  instrument, writing or agreement
related thereto;

                  (c) to protect,  collect, sell, liquidate otherwise dispose of
the Collateral;

                  (d)  to  attempt  to or to  enforce  the  Lender's  liens  and
security interests in the Collateral; and/or

                  (e) in  otherwise  protecting,  enforcing  or  exercising  its
interests,  Rights or Remedies  created by,  connected  with or provided in this
Agreement, or performance pursuant to this Agreement;

then,  the  reasonable  attorneys'  fees,  costs and expenses  arising from such
services, and all other expenses, costs, charges and other fees of the Lender in
any way or respect  arising in connection  with or relating to any of the events
described in this Subsection  (expressly including all post-judgment  collection
expenses  and  costs)  shall be added to the  amount of the  Obligations  of the
Borrower  to the Lender,  and shall be payable on demand.  The  Borrower  hereby
authorizes the Lender to charge the Borrower's Line of Credit for payment of any
and all fees and expenses due under this  Subsection 6.14 provided  however,  in
the event of a circumstance  occurring under Section  6.14(a),  the Lender shall
give the  Borrower  seven (7) days  prior  written  notice of any  amounts to be
charged.  Any amounts due  hereunder not paid on demand shall bear interest from
the date of demand at the default rate of interest set forth herein.  Any of the
amounts payable hereunder by the Borrower may be paid by the Lender,  and if and
when so paid, shall be deemed to be advances under the Line of Credit.

         6.15 Fees and Expenses  Incident to Preparation,  Execution and Release
of  Agreement.  The  Borrower  shall pay, on demand,  all legal fees,  recording
expenses and other reasonable and necessary disbursements of the Lender incident
to the preparation, execution and delivery of this Agreement.

         6.16 Financial  Records in Accordance with GAAP. The Borrower shall, at
all times and in  accordance  with  generally  accepted  accounting  principles,
consistently  applied,  keep

                                      -20-
<PAGE>

complete and accurate  books and records  concerning  its business,  affairs and
operations  and  concerning  its  properties  and  assets,  including,   without
limitation,  the Collateral, and shall deliver to the Lender all instruments and
chattel  paper  (including  all executed  copies  thereof,  except such executed
copies retained by the obligors thereunder) representing proceeds of Collateral;
and the Borrower shall deliver to the Lender,  promptly at the Lender's request,
from time to time,  additional  copies of any or all of such papers or writings,
and such other  information with respect to any of the said Collateral and other
writings,  as the  Lender may in its sole  discretion  deem to be  necessary  or
effectual to evidence any loan made  pursuant to this  Agreement or to evidence,
enforce  or  perfect  the  Lender's  security  interest  in the  Collateral,  to
facilitate collection of the Collateral,  or to carry into effect the provisions
and intent of this Agreement, all at the sole expense of the Borrower.

         6.17 Legends,  Etc. on Books and Records and  Collateral.  The Borrower
shall promptly  make,  stamp or record such entries or legends on the Borrower's
internal  books and  records or on any of the  Collateral  as the  Lender  shall
request  from  time to time to  indicate  and  disclose  that the  Lender  has a
security interest in such Collateral.

         6.18 Other  Reporting  Requirements.  The Borrower shall furnish to the
Lender:  (i) as soon as possible and in any event within  thirty (30) days after
the Borrower or a duly appointed  administrator  of a Defined Benefit Plan knows
or has reason to know that any Reportable Event has occurred with respect to any
Defined Benefit Plan, a statement of the chief financial officer of the Borrower
setting  forth  details as to such  Reportable  Event and the  action  which the
Borrower  proposes to take with  respect  thereto,  together  with a copy of the
notice  of such  Reportable  Event  given to the PBGC or a  statement  that said
notice will be filed with the annual report to the United  States  Department of
Labor with respect to such Defined  Benefit  Plan if required  under  applicable
regulations;  (ii)  promptly  after the filing  thereof  with the United  States
Department of Labor,  the Internal  Revenue Service or the PBGC,  copies of each
annual  and other  report  with  respect to each  Defined  Benefit  Plan;  (iii)
promptly after receipt  thereof,  a copy of any notice the Borrower or any other
member of a Controlled  Group may receive from the United  States  Department of
Labor,  the Internal  Revenue  Service or the PBGC,  with respect to any Defined
Benefit Plan; and (iv) promptly after the sending of, making available or filing
of the same,  copies of any reports,  proxy statements and financial  statements
which the Borrower shall send or make available to all of its stockholders,  and
any  registration  statements and any reports which the Borrower shall file with
the Securities and Exchange Commission.

         6.19 Use of Loan  Proceeds.  The Borrower  shall use loans and advances
made pursuant to this  Agreement  solely for the purposes of working  capital in
the funding of mortgage loans secured by residential real estate and/or personal
property as set forth herein.

                                      -21-
<PAGE>

         6.20 Further Assurances.  The Borrower shall, as the Lender may request
and  require,  procure  and  deliver to the Lender or  execute  any  assignment,
mortgage, security agreement,  financing statement or other writing necessary to
evidence,  preserve,  protect or enforce the Lender's rights and interests to or
in the Collateral or in any other collateral agreed to by the parties.

         6.21 Change in  Financial  Condition.  The Borrower  shall  immediately
notify the Lender of any material loss or damage to, or material  diminution in,
or any occurrence  which would  materially  adversely  affect,  the value of any
Collateral.  In the  event  that  the  Lender,  in its  sole  discretion,  shall
determine  that there has been any such material  loss,  damage or diminution in
value,  the  Borrower  shall,  whenever  the  Lender  so  requests  in its  sole
discretion,  cause the outstanding principal balance under the Line of Credit to
be in an amount  less than or equal to the  lesser  of (a) the  Maximum  Line of
Credit Amount,  or (b) the amount  available for advances based upon the formula
set forth in Subsection 2.1(a) hereof, as of any date of determination.

         6.22  Additional  Collateral.  The  Lender may from time to time in the
Lender's sole  discretion  hold and treat any deposits or other sums at any time
credited by or due from the Lender to the Borrower and any  securities  or other
property of the Borrower in possession of the Lender, whether for safekeeping or
otherwise,  as collateral security for and apply or set off the same against any
of the  Obligations  of  the  Borrower  to  the  Lender.  Without  limiting  the
generality of the foregoing,  if at any time the amount of the loans or advances
by the Lender as allowed by this Agreement shall be exceeded, the Borrower shall
pay to the Lender, in immediately  available funds, the amount of such excess if
the Lender so requests, or the Lender may charge such amount against any deposit
account of the Borrower with the Lender provided however,  the Lender shall give
the Borrower  seven (7) days prior  written  notice of any amounts to be charged
under this Subsection 6.22.

         6.23 Prohibited Transactions.  Without the prior written consent of the
Lender, which consent will not be unreasonably withheld, the Borrower shall not:

                  (a) Create,  incur or assume any liability for borrowed  money
which  liability  is  secured  by any  of the  assets  of the  Borrower,  except
liabilities  heretofore or hereinafter incurred by the Borrower to the Lender or
to other mortgage warehouse lenders previously disclosed to the Lender.

                  (b) Assume, guarantee,  endorse or otherwise become liable, in
connection  with the Obligations of any person,  firm or corporation  except (i)
liabilities  of the  Borrower  resulting  from  product  warranties  made by the
Borrower in the ordinary  course of its business,  and (ii)  liabilities  of the
Borrower  resulting from its  endorsement of items or instruments for deposit or
collection in the ordinary course of its business.

                                      -22-
<PAGE>

                  (c) Sell, lease,  abandon, or otherwise dispose of, all or any
substantial  part of the  properties or assets of the  Borrower,  other than the
sale of Loans to Investors subject to the provisions of this Agreement.

                  (d) Purchase,  lease, or otherwise acquire,  the properties or
assets,  or any interest  therein,  of any person,  firm or corporation,  except
purchases,  leases or other  acquisitions of inventory and equipment made by the
Borrower  in the  ordinary  course of its  business in bona fide,  arm's  length
transactions.

                  (e) Consolidate  with, merge into, or participate in any joint
venture with, any person,  firm or  corporation,  or permit any person,  firm or
corporation,  to  consolidate  with,  merge into, or  participate  in, any joint
venture with the Borrower.

                  (f) Create or acquire the obligations, securities or stock of,
or make  loans,  advances  or  capital  contributions  to, any  person,  firm or
corporation,  except upon prior written notice to the Lender; provided, however,
that the Borrower may, without such prior written notice, make loans or advances
in the ordinary course of business and purchase or acquire any of the following:

                           (i)  Marketable  direct  obligations  of  the  United
States of America;

                           (ii)   Commercial   paper   issued  by   corporations
conducting  substantially all of their business in the United States of America,
maturing  within one  hundred  eighty  (180) days from the date of the  original
issue thereof, and rated "prime" by the National Credit Office;

                           (iii) Bonds of any state,  county, or municipality of
the United  States of America,  (w) which  mature  within two (2) years from the
date of acquisition thereof, and (x) which are not in default as to principal or
interest,  and (y) which are rated Aa, or better, by Moody's Investors  Service,
and (z) the interest of which is exempt from federal income tax; and

                           (iv)  Customer's  notes,  chattel paper,  or the like
received as non-cash  proceeds of the sale of the  inventory  of the Borrower in
the ordinary course of its business.

                  (g) Alter its existing  capital stock structure by issuance of
new shares of existing classes of stock, by creation of new classes of stock, or
otherwise,  so as to cause a loss of  control  of the  Borrower  by the  current
owners.

                  (h)  Permit  or  cause  any  change  in the  ownership  of its
presently  issued and  outstanding  stock which change would result in a loss of
control of the Borrower by the current owners.

                                      -23-
<PAGE>

                  (i) Declare or pay any cash dividend or make any  distribution
on, or redeem, retire or otherwise acquire directly or indirectly,  any share of
its stock.

                  (j) Permit or cause any change in the person of Ira  Silverman
as  President of the  Borrower,  except upon sixty (60) days prior notice to the
Lender.

                  (k) Permit the aggregate  available  credit under all mortgage
warehouse facilities to exceed $30,000,000.00.

         6.24  Information  Relating to  Operations  of  Borrower.  Upon written
request,  the Borrower  shall  provide to the Lender the  following  information
pertaining to all operations conducted in or on the Properties:

                  (a) Copies of all permits obtained from any federal,  state or
local agency;

                  (b) Material  safety data sheets for all  chemicals in use at,
manufactured at, imported to, or stored at the Properties;

                  (c)  Copies  of  all   materials   filed   with  the   Federal
Occupational Safety and Health Agency under OSHA Hazard  Communication  Standard
and all materials  filed with the New York  Department  of Health,  the New York
Department of  Environmental  Protection,  or any other federal,  state or local
agency or entity;

                  (d) Maps,  diagrams and site plans showing the location of all
storage  areas and storage tanks for  Hazardous  Substances  and the location of
processes using any of them, including details as to the amounts stored or used;

                  (e) A description of said  operations and of their  processes;
and

                  (f) Any other  information  which the  Lender  may  reasonably
request.

         6.25  Notification of Event of Default.  The Borrower shall immediately
notify the Lender of the occurrence of an Event of Default and of the nature and
period of existence thereof.

         6.26  Separate  Assignments.  If required by the Lender,  the  Borrower
shall  execute  and  deliver a  separate  assignment  to the  Lender,  or at the
Lender's sole and absolute discretion,  a certified true copy of such assignment
properly executed in favor of the Lender evidencing a valid and legal assignment
to the  Lender,  of all of the  Borrower's  right,  title and  interest  in each
Mortgage Note,  each Mortgage and each UCC-l  financing  statement and any other
property, right, proceeds or payment forming part of the Collateral,  including,
but not limited to, all Borrower's rights in and to any applicable commitment of
an

                                      -24-
<PAGE>

Investor to purchase a Mortgage Note or Mortgage, and all insurance policies and
proceeds,  and the Borrower  shall pay the cost of filing the same in all public
offices.

         6.27 Minimum Adjusted Tangible Net Worth. The Borrower shall not permit
its Adjusted  Tangible Net Worth to be in an amount less than  $2,250,000.00 (to
be tested on a quarterly basis).

         6.28 Leverage  Ratio.  The Borrower shall maintain at all times a ratio
of total  indebtedness to Adjusted Tangible Net Worth,  equal to or less than 14
to 1.0.

         6.29  Documentation.  The  Borrower  shall  provide the Lender with the
following:

                  (i) the  documents  set forth on the  applicable  Loan Advance
Request;

                  (ii) with respect to all Mortgage Loans:

                           (1)(A) certified true copy of the Mortgage, HUD-l and
original  Mortgage Note properly endorsed in blank by the Borrower and delivered
to the Lender; and

                           (2) If required by the  Lender,  a properly  recorded
Assignment  of Mortgage,  within three (3) business  days after the making of an
advance against said Mortgage Loan.

                  (iii) with respect to all Personal  Property Loans, a properly
perfected UCC-l Financing Statement.

         6.30 Compliance With Agreement. The Borrower shall observe, perform and
comply with, and shall  continue,  until all  Obligations of the Borrower to the
Lender  pursuant to this  Agreement  are fully paid and  satisfied,  to observe,
perform and comply with, all of the Borrower's covenants made in this Agreement.

         6.31  Quality  Control.  Not less than five (5%)  percent of all funded
Loans  hereunder  shall be subject to monthly quality control audits at the sole
discretion of the Lender.

                                    SECTION 7
                                EVENTS OF DEFAULT

         There shall be an Event of Default by the Borrower under this Agreement
upon the occurrence of anyone of the following:

         7.1 The  Borrower's  failure to pay, when due, on demand or at maturity
(whether  as stated or by  acceleration),  as the case may be,  any  payment  of
principal, interest or other charges due and owing to the Lender pursuant to any
Obligations of the Borrower to the Lender, including,  without limitation, those
Obligations arising pursuant to this Agreement.

                                      -25-
<PAGE>

         7.2 A material  breach by the Borrower or the Guarantor of any covenant
contained  in this  Agreement  or the  Guaranty  Agreement,  including,  without
limitation, those covenants contained in Section 6 hereof.

         7.3 If any  warranty or  representation  contained  in this  Agreement,
including,  without limitation,  the warranties and representations contained in
Section 5, shall be  incorrect  in any  material  respect,  or if any  financial
statement  given  by the  Borrower  or the  Guarantor  to the  Lender  shall  be
incorrect in any material respect.

         7.4 Upon dissolution,  termination of existence,  insolvency,  business
failure,  appointment of a trustee,  receiver or custodian of all or any part of
the  properties or assets of the Borrower or the  Guarantor;  upon an assignment
for the benefit of creditors  by, the calling of a meeting of  creditors  of, or
the  commencement  of any proceeding  under any bankruptcy or insolvency laws of
any state or of the  United  States by the  Borrower  or the  Guarantor,  or the
commencement  of any proceeding  under any bankruptcy or insolvency  laws of any
state or of the United States against the Borrower or the Guarantor.

         7.5 The  occurrence of any event of default on the part of the Borrower
or the Guarantor in connection with any loans,  advances or other  extensions of
credit by the Lender to the  Borrower  or the  Guarantor  other than those loans
made pursuant to this Agreement.

         7.6 If any warranty or representation whether past,  contemporaneous or
future made in writing by the  Borrower or the  Guarantor  to the Lender,  other
than the warranties or  representations  set forth in this  Agreement,  shall be
incorrect in any material respect.

         7.7 The death of any Guarantor.

         7.8 The Borrower's failure to deliver the documentation  required under
Subsection 4.2 within the applicable time periods.

                                    SECTION 8
                          LENDER'S RIGHTS AND REMEDIES

         8.1 Exclusive of the occurrence of an Event of Default, the Lender may:

                  (a) At least  ninety  (90) days from the  Maturity  Date,  the
Lender shall  notify the Borrower if it does not intend to renew this  Agreement
and terminate  its  agreement to make loans or advances  pursuant to the Line of
Credit and demand  payment of any and all  Obligations  of the  Borrower  to the
Lender, which payment shall be due on the Maturity Date;

                                      -26-
<PAGE>

                  (b) Upon one (1) day's prior  notice,  call at the  Borrower's
place of business  during the regular  business  hours of the  Borrower,  and at
reasonable  intervals to be determined by the Lender and,  without  hindrance or
delay,  inspect,  audit,  check and make extracts or copies from the  Borrower's
books, records, journals, orders, receipts,  correspondence, and other data, and
inspect the Collateral;

                  (c) Endorse the name of the Borrower  upon any and all checks,
drafts,  money orders and other  instruments for the payment of monies which are
payable to the Borrower and constitute proceeds of the Collateral; and

                  (d)  Receive  and  have  access  to  printouts  and all  other
information  respecting financial records of the Borrower maintained by external
computer service companies; and

                  (e) Communicate,  in the name of a certified public accountant
or public  accountant,  or in a fictitious  name or names,  with  customers  and
account debtors of the Borrower to independently verify the Mortgage Loans.

         8.2 Upon the  occurrence  of an Event of Default the Lender  shall have
the following  rights and remedies to be exercised within the sole discretion of
the Lender without further demand, presentation or notice, of any kind:

                  (a) The  Lender  shall have all of those  rights and  remedies
provided in this Agreement,  in the Uniform Commercial Code and other applicable
law in force and effect in New Jersey;

                  (b) The Lender's  agreement to make any further loans pursuant
to this Agreement, or otherwise,  shall cease, and all of the Obligations of the
Borrower to the Lender shall immediately become due and payable;

                  (c) In  protecting,  exercising  or enforcing  its  interests,
rights or  remedies  under this  Agreement,  receive,  open and  dispose of mail
addressed to the Borrower, provided that the Lender shall return to the Borrower
all mail not related to the  Collateral,  or to any of the  Obligations,  and in
connection therewith,  give such notice to any office or officials of the United
States  Postal  Service,  or any  successor  thereof,  to effect such changes of
address as the  Lender  may deem  necessary  so that all mail  addressed  to the
Borrower may be delivered directly to the Lender;

                  (d) Require the Borrower to assemble the  Collateral  and make
it available at the  principal  place of business or other places of business of
the  Borrower  to  allow  the  Lender  to  take  possession  or  dispose  of the
Collateral;

                  (e) Take possession of and sell or otherwise dispose of any or
all of the  Collateral at public or private sale,  and if notice of such sale or
of other action by the Lender is required

                                      -27-
<PAGE>

by applicable law, the Borrower agrees that ten (10) days notice to the Borrower
shall be  sufficient,  which the Lender and the  Borrower  herewith  agree to be
commercially reasonable;

                  (f) Subrogate to all of the Borrower's  interests,  rights and
remedies in respect to the Collateral, including the right to stop delivery, and
(upon notice from the Borrower that the account  debtor has returned,  rejected,
revoked  acceptance of or failed to return the goods or that the goods have been
reconsigned or diverted) the right to take  possession of and to sell or dispose
of the goods;

                  (g)  Execute  in the  name  of  the  Borrower  any  schedules,
assignments,  instruments,  documents  and  statements  which  the  Borrower  is
obligated to give the Lender;

                  (h) Sign financing statements in the name of the Borrower,  or
file  financing  statements  without the Borrower's  signature,  in any relevant
state to perfect or maintain the Lender's security interest in any or all of the
Collateral; and

                  (i) Receive from all or any accountants and auditors  employed
by the Borrower at any time during the term of this  Agreement  copies of any of
the Borrower's financial statements,  trial balances or other accounting records
of any sort in their possession,  together with any other information concerning
the financial status or business operations of the Borrower.

                                    SECTION 9
                         BORROWER'S RIGHTS AND REMEDIES

         9.1 Subject to Subsection  2.1(d), the Borrower shall have the right to
make Mortgage Loans and to collect payments due thereunder,  at its own expense,
in the ordinary course of its business, until an Event of Default has occurred.

         9.2 The Borrower shall have all of the rights and remedies  provided in
this Agreement and by the Uniform  Commercial  Code and other  applicable law in
force in New Jersey.

                                   SECTION 10
                            MISCELLANEOUS PROVISIONS

         10.1  Obligations  and  Liabilities of Lender.  The Lender shall not be
deemed to have assumed any  liability or  responsibility  to the Borrower or any
third person for the correctness,  validity or genuineness of any instruments or
documents  that may be released or endorsed to the Borrower by the Lender (which
shall  automatically  be  deemed to be  without  recourse  to the  Lender in any
event), or for the existence,  character, quantity, quality, condition, value or
delivery of any goods  purporting to be represented by any such  documents;  and
the  Lender,  by  accepting  such  security  interest in the  Collateral,  or by
releasing any  Collateral  to the Borrower,  shall not be deemed to have assumed
any  obligation  or liability to any supplier or

                                      -28-
<PAGE>

account debtor or to any other third party, and the Borrower agrees to indemnify
and defend the Lender and hold it harmless in respect to any claim or proceeding
arising out of any matter referred to in this Subsection 10.1.

         10.2 Waiver of  Notices.  Notice of default  and  presentment,  demand,
protest and notice of  dishonor as to any  provision  of this  Agreement  or any
other agreement or instrument is hereby waived by the Borrower, except as may be
otherwise specifically provided in this Agreement.

         10.3  Reference  to Parties.  "Lender" and  "Borrower"  as used in this
Agreement  shall include the successors,  representatives,  and assigns of those
parties;  provided,  however, that the Borrower shall not assign or delegate any
of its rights, remedies, warranties,  representations or covenants arising under
this  Agreement  without  the  prior  written  consent  of the  Lender,  and any
purported assignment or delegation without such consent shall be void.

         10.4 Governing Law; Consent to Jurisdiction.

                  (a) This Agreement is to be executed and delivered  within the
State of New  Jersey,  is to be  principally  performed  within the State of New
Jersey,  and the Borrower and the Lender elect that the laws of the State of New
Jersey shall govern the construction of this Agreement and the rights, remedies,
warranties,  representations,  covenants,  and provisions  hereof without giving
effect to the  conflict of laws rules of the State of New Jersey,  and except to
the extent that the validity or perfection of the security  interest or Mortgage
hereunder, or remedies hereunder,  in respect of any particular Collateral,  are
governed by the laws of a jurisdiction other than the State of New Jersey.

                  (b) Any  legal  action  or  proceeding  with  respect  to this
Agreement  or any other  document,  instrument,  writing  or  agreement  related
hereto, may be brought in the courts of the State of New Jersey or of the United
States for the District of New Jersey,  and, by  execution  and delivery of this
Agreement,  the Borrower hereby irrevocably accepts for itself in respect of its
property,  generally  and  unconditionally,  the  jurisdiction  of the aforesaid
courts. The Borrower further irrevocably  consents to the service of process out
of any of the  aforementioned  courts and in, any  action or  proceeding  by the
mailing of copies thereof by registered or certified mail,  postage prepaid,  to
the Borrower at its address for notices  contained in  Subsection  10.10 of this
Agreement, such service to become effective thirty (30) days after such mailing.
Nothing  contained  herein  shall  affect  the right of the Lender to service of
process  in  any  other  manner  permitted  by  law  or to  commence  any  legal
proceedings or otherwise proceed against the Borrower in any jurisdiction.

                  (c) The  Borrower  hereby  waives  any  rights  it may have to
transfer or change the venue of any litigation  brought against

                                      -29-
<PAGE>

it by the  Lender  which is in any way  related to this  Agreement  or any other
document, instrument, writing or agreement related hereto.

                  (d) The provisions of this  Subsection  10.4 shall survive the
repayment of the  Obligations of the Borrower to the Lender and the  termination
of this Agreement.

         10.5  Severability.  If any of the provisions of this  Agreement  shall
contravene or be held invalid under the laws of any jurisdiction, this Agreement
shall  be  construed  as if not  containing  such  provisions  and  the  rights,
remedies, warranties, representations, covenants, and provisions hereof shall be
construed and enforced  accordingly  in such  jurisdiction  and shall not in any
manner affect such provision in any other jurisdiction,  or any other provisions
of this Agreement in any jurisdiction.

         10.6 Rights and Remedies. Etc. The Events of Default, rights, remedies,
warranties,  representations,  covenants,  and  provisions  set  forth  in  this
Agreement,  or as may be provided by applicable law, shall be cumulative and not
alternative or exclusive,  and the Lender's Rights and Remedies may be exercised
by the Lender at such time or times, in such order of preference,  as the Lender
in its sole discretion may determine.

         10.7 No Party  Deemed  Drafter.  The Borrower and the Lender agree that
(a) no party hereto shall be deemed to be the drafter of this Agreement, and (b)
if this  Agreement  is ever  construed  by a court of law,  such court shall not
construe  this  Agreement or any provision of this  Agreement  against any party
hereto as the drafter of this Agreement.

         10.8 Entire  Agreement,  No Waiver,  Etc. This  Agreement  embodies the
entire  agreement  and  understanding  between the  Borrower  and the Lender and
supersedes  all prior  agreements  and  understandings  relating  to the subject
matter hereof.  All warranties,  representations  and covenants  imposed or made
herein shall survive the execution and delivery of this  Agreement.  No delay or
omission of the Lender in exercising or enforcing any of the Lender's Rights and
Remedies  hereunder  shall  constitute  a waiver  thereof;  and no waiver by the
Lender of any Event of Default  should operate as a waiver of any other Event of
Default. No term or provision hereof shall be waived, altered or modified except
with the prior  written  consent of the Lender,  which  consent  makes  explicit
reference to this Agreement.  Except as provided in the preceding  sentence,  no
other agreement or transaction,  of whatsoever nature,  entered into between the
Lender  and the  Borrower  at any time  (whether  before,  during  or after  the
effective date or terms of this Agreement), shall be construed in any particular
as a waiver,  modification  or  limitation  of any of the  Lender's  Rights  and
Remedies  under this Agreement nor shall anything in this

                                      -30-
<PAGE>

Agreement be construed as a waiver,  modification  or  limitation  of any of the
Lender's  Rights and Remedies  under this  Agreement nor shall  anything in this
Agreement be construed as a waiver,  modification  or  limitation  of any of the
Lender's  Rights and Remedies,  not only under the provisions of this Agreement,
but also of any such other agreement or transaction.

         10.9  Reference  to Days.  Any and all  references  to  "days"  in this
Agreement shall mean "business days" except as otherwise  specifically  provided
by law.

         10.10 Notices.

                  (a) All notices,  requests, and other communications  pursuant
to this  Agreement,  other than notices or requests by the Borrower for advances
under the Line of Credit or issuance of Letters of Credit,  shall be in writing,
either by letter  (delivered  by hand or sent  certified  mail,  return  receipt
requested)  or  telecopier  addressed to the Lender at Summit  Bank,  750 Walnut
Avenue,  Cranford, New Jersey 07016,  "Attention:  Elsie Mroczkowski," or to the
Borrower (as the case may be) at its principal place of business as described in
Subsection 5.13 of this Agreement,  "Attention: Ira Silverman," or at such other
address as either may give notice to the other as herein provided.

                  (b) All notices or requests by the Borrower for advances under
the Line of Credit shall be made in writing, delivered by hand or sent certified
mail, return receipt requested, or sent via telecopier,  addressed to the Lender
as follows: 750 Walnut Avenue,  Cranford,  New Jersey 07016,  "Attention:  Elsie
Mroczkowski," telephone number:  908-931-3284,  telecopier number: 908-931-3285,
or at such other  address or  telephone or  telecopier  number as the Lender may
give notice to the Borrower as herein provided.

                  (c) Any notice,  request or  communication  hereunder shall be
deemed to have been given when  deposited  with a reputable  overnight  delivery
service, postage prepaid, or in the case of hand delivery, when delivered, or in
the case of notice via  telecopier,  when  transmitted  and  receipt  confirmed,
addressed as aforesaid;  provided,  however, that notice of a change of address,
as hereinabove  provided,  shall be deemed to have been given only when actually
received by the party to which it is addressed.

         10.11  Ambiguity  Between  Agreements.  In the  event of  ambiguity  or
inconsistency  between this Agreement and any agreement,  document or instrument
made  pursuant  hereto,  then the  terms of this  Agreement  will  govern.  This
Agreement supersedes all previous agreements, commitments or any other documents
between the parties concerning this loan transaction.

         10.12  Counterparts.  This  Agreement may be executed in  counterparts,
each of  which,  when  taken  together,  shall be  deemed to be one and the same
instrument.

                                      -31-
<PAGE>

         10.13 Headings. Section headings herein are included for convenience of
reference  only and shall not  constitute a part of this Agreement for any other
purpose.

         10.14 WAIVER OF JURY TRIAL.

                  (a)  THE  LENDER  AND THE  BORROWER  HEREBY  ACKNOWLEDGE  THAT
DISPUTES  ARISING UNDER THIS AGREEMENT OR OTHERWISE  RELATING TO THE OBLIGATIONS
ARE LIKELY TO BE COMPLEX AND THEY DESIRE TO STREAMLINE  AND MINIMIZE THE COST OF
RESOLVING  SUCH  DISPUTES.  THEREFORE,  THE LENDER AND THE BORROWER  IRREVOCABLY
WAIVE,  AND  COVENANT  THAT THEY WILL NOT ASSERT  (AS  PLAINTIFF,  DEFENDANT  OR
OTHERWISE), ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, COUNTERCLAIM, DISPUTE OR
PROCEEDING  BASED UPON,  OR RELATED TO THE SUBJECT  MATTER OF THIS  AGREEMENT OR
OTHERWISE  RELATING TO THE  OBLIGATIONS.  WITHOUT  LIMITING THE FOREGOING,  THIS
WAIVER AND COVENANT APPLIES:

                           (i)  TO  ALL  CLAIMS  AGAINST  ALL  PARTIES  TO  SUCH
DISPUTES,  ACTIONS AND PROCEEDINGS  INCLUDING  THOSE  INVOLVING THE LENDER,  THE
BORROWER OR ANY OF THEIR RESPECTIVE PARENTS, SUBSIDIARIES, AFFILIATES OR RELATED
ENTITIES, OR ANY OFFICER, DIRECTOR, SHAREHOLDER,  MEMBER, ATTORNEY OR PARTNER OF
ANY OF THEM;

                           (ii) IRRESPECTIVE OF WHETHER SUCH DISPUTE,  ACTION OR
PROCEEDING  ARISES UNDER THIS AGREEMENT OR ANY OTHER  AGREEMENT,  LINE OF CREDIT
NOTE, PAPER, INSTRUMENT OR DOCUMENT HERETOFORE OR HEREAFTER EXECUTED RELATING TO
ANY OF THE OBLIGATIONS;

                           (iii)  IRRESPECTIVE OF WHETHER SUCH DISPUTE,  ACTION,
OR  PROCEEDING  ARISES  IN  CONNECTION  WITH OR IS  BASED  UPON  INTENTIONAL  OR
UNINTENTIONAL  CONDUCT,  FRAUD,  IMPROPER ACTION OR FAILURE TO ACT, OR ANY OTHER
CIRCUMSTANCES.

                  (b) THIS  WAIVER IS  KNOWINGLY,  AND  VOLUNTARILY  MADE BY THE
BORROWER  AND THE  LENDER,  AND THE  BORROWER  AND THE LENDER  ACKNOWLEDGE  THAT
NEITHER OF THEM, NOR ANY PERSON ACTING ON BEHALF OF EITHER OF THEM, HAS MADE ANY
REPRESENTATIONS  TO INDUCE  THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY
OR NULLIFY ITS EFFECT. THE BORROWER AND THE LENDER FURTHER ACKNOWLEDGE THAT THEY
HAVE  BEEN  REPRESENTED  (OR  HAVE HAD THE  OPPORTUNITY  TO BE  REPRESENTED)  IN
CONNECTION  WITH THE SIGNING OF THIS  AGREEMENT AND IN THE MAKING OF THIS WAIVER
BY  INDEPENDENT  LEGAL  COUNSEL,  SELECTED OF THEIR OWN FREE WILL, AND THAT THEY
HAVE HAD THE  OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  THE BORROWER AND
THE LENDER FURTHER  ACKNOWLEDGE  THAT THEY HAVE READ, AND UNDERSTAND THE MEANING
AND RAMIFICATIONS OF, THIS WAIVER.

                  (c) THE  BORROWER  AND THE LENDER  ACKNOWLEDGE  THAT THEY HAVE
BEEN INFORMED BY EACH OTHER THAT THIS WAIVER  CONSTITUTES A MATERIAL  INDUCEMENT
UPON WHICH EACH HAS RELIED IN ENTERING INTO THIS AGREEMENT, AND THAT THIS WAIVER
PARAGRAPH SHALL BE DEEMED  ENFORCEABLE  INDEPENDENTLY OF ALL OTHER PROVISIONS OF
THIS AGREEMENT. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OF THIS

                                      -32-
<PAGE>

SECTION AS WRITTEN  EVIDENCE  OF THE  CONSENT BY EITHER OF THEM TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.  THE PROVISIONS OF THIS  SUBSECTION  SHALL SURVIVE
THE REPAYMENT OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

         Executed at ______, New Jersey, on the date first written above.

ATTEST:                                     COMMUNITY HOME MORTGAGE CORPORATION

By:/s/                                      By: /s/ Ira Silverman
   ---------------------------                  ------------------------------
                                                Ira Silverman, President

                                            SUMMIT BANK

                                            By: /s/ James Liccardo
                                                --------------------------
                                                James Liccardo,
                                                Senior Vice President

                                      -33-

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